NEWS
Polymer majors report difficult trading in first half of 2019
First half results from BASF, Covestro and Radici Group highlight increasingly challenging trading condi- tions, particularly in the auto- motive market.
BASF said “significantly
weaker than expected indus- trial production” impacted both its volumes and margin development. It said this was particularly pronounced in the automotive sector, where production fell by 6% globally and by 13% in China. As a consequence, the company’s preliminary Q2 sales figures were 4% down on Q2 2018 at
€15.2bn; EBIT was 71% down at €500m due to much lower earnings in its Materi- als, Chemicals and Agricul- tural Solutions segments. BASF said it now expects a slight decline in sales for the year as a whole and a 30% fall in EBIT before special items. At the start of the year, it had anticipated slight growth in each. Covestro saw a 16.9% fall
in group sales to €3.2bn. It said lower selling prices cancelled out a 1.1% increase in volumes in a situation of “ongoing intense competitive pressure and
uncertainties in major sales markets”. EBITDA was 53.4% down on an outstanding Q2 2018 at €459m, mainly from lower margins in the Polyurethanes and Polycar- bonates segments. Covestro also said the automotive market “devel- oped much weaker than expected” but that construc- tion was relatively strong. It confirmed its guidance for fiscal 2019 of core volume growth in the low- to mid-single digit percentage range and EBITDA of €1.5-2.0bn. Italy’s RadiciGroup
reported an excellent 2018, with consolidated sales revenue up by 6% to €1.2bn and EBITDA up 16% to €185m. However, it said it is now feeling the effects of a slowdown that began late last year. RadiciGroup President Angelo Radici said he saw “stable margins despite the contraction in sales volumes” in the first half of this year but expect- ed conditions to be “a bit tougher” in the second half, due to global uncertainty. �
www.basf.com �
www.covestro.com �
www.radicigroup.com
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