MOSCOW (MRC) -- Wacker Chemie AG concluded the first quarter of 2016 in line with its expectations. The Munich-based chemical company’s sales were down marginally year over year. Earnings before interest, taxes, depreciation and amortization (EBITDA) were considerably lower than in Q1 2015, influenced by start-up costs for the new site at Charleston, Tennessee (USA). Compared with the preceding quarter, however, WACKER achieved a substantial increase in both sales and EBITDA, as per the company's report.
The Group posted sales of EUR1,314.3 million in the reporting quarter (Q1 2015: EUR1,334.9 million), down close to 2 percent year over year. This slight decrease was chiefly due to the fact that solar-silicon and semiconductor-wafer prices were lower than a year earlier. Compared with the prior quarter (EUR1,232.9 million), however, sales grew by around 7 percent, primarily thanks to stronger customer demand and volume growth.
EBITDA amounted to EUR228.9 million in the reporting period (Q1 2015: EUR267.1 million), down about 14 percent year over year, but almost 22 percent higher than in Q4 2015 (EUR188.4 million). Group earnings before interest and taxes (EBIT) amounted to EUR58.9 million in Q1 2016 (Q1 2015: EUR126.3 million), with a corresponding EBIT margin of 4.5 percent (Q1 2015: 9.5 percent). Net income for the reporting quarter amounted to EUR16.1 million (Q1 2015: EUR70.6 million) and earnings per share came in at EUR0.41 (Q1 2015: EUR1.42).
Low price levels for semiconductor wafers and solar silicon as well as the anticipated start-up costs of around EUR30 million for the new site in Charleston had an impact on Wacker’s earnings from January through March 2016. Wafer prices averaged somewhat lower than a year ago, while prices for solar silicon were down substantially compared with Q1 2015. However, market prices for polysilicon have been recovering steadily since mid-February, benefiting WACKER’s polysilicon business. Combined EBITDA for the three chemical divisions was around 19 percent higher than a year ago, with volume growth and good cost levels having a positive influence.
Wacker has raised its earnings forecast for full-year 2016. EBITDA - adjusted on a comparable basis to exclude special income from damages received and from terminated contractual and delivery relationships with solar customers - is expected to rise between 5 and 10 percent against last year.
"WACKER had a good start to the new year given the underlying conditions," said CEO Rudolf Staudigl in Munich on Thursday. "Our chemical business, in particular, performed strongly and profitably from January through March."
Overall, Wacker expects group sales to rise by a low-single-digit percentage in fiscal 2016.
As MRC informed previously, in 2013, Wacker Chemie AG officially launched its new production plant for ethylene-vinyl-acetate copolymer (EVA) dispersions at its Ulsan site in South Korea. The additional 40,000 tonnes from the second reactor line increases the site's EVA-dispersion capacity to a total of 90,000 tonnes per year. The production capacity of the site, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea.
Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.
MRC