17-Oct-2019 - Wacker Chemie AG

WACKER Lowers Guidance for 2019

Based on its latest estimates, Wacker Chemie AG expects several key financial performance indicators for 2019 to be lower than previously projected. Full-year Group sales are likely to be on par with last year (previous guidance: mid-single-digit percentage increase). EBITDA is anticipated to be some 30 percent below last year’s level (previous guidance: 10 to 20 percent lower than a year ago). Net income is expected to be slightly positive (previous guidance: substantially below last year). Net cash flow should be clearly positive, but lower than last year (previous guidance: clearly positive and substantially higher than last year). As with the previous forecast, WACKER’s guidance does not include proceeds from insurance compensation.

“Our expectations have declined primarily because prices for polysilicon remain extremely low,” said Rudolf Staudigl, WACKER’s CEO, as he explained the main reason for the guidance downgrade. “Many market experts anticipated a price recovery for solar silicon in the second half-year – an assumption that was reflected in our previous guidance. But the average prices for this material have not improved. Instead, they fell further in the third quarter due to overcapacity created by Chinese competitors.”

Furthermore, the increasing weakness of the global economy is also dampening business in all of WACKER’s divisions.

Additionally, the company announced that it is starting to work on a comprehensive program to prepare WACKER for future challenges by making the company more efficient and capable and achieving substantial cost savings. “We must, and will, effectively counter the increasingly difficult conditions in our business,” said Staudigl confidently.

According to preliminary and unaudited figures, Group sales for Q3 2019 amount to €1,270 million. WACKER expects third-quarter EBITDA of €270 million. This sum includes special income of about €112 million in insurance compensation for the damage incurred following the incident at the Charleston site in 2017. The company booked this amount under the WACKER POLYSILICON division in the reporting quarter.

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