Polysilicon prices and stable chemical business shape WACKER’s expectations for 2013
Wacker Chemie AG closed 2012 with lower sales and earnings. In its annual report released, the Munich-based chemical Group recorded sales of €4.63 billion, just under 6 percent below the previous year’s €4.91 billion. The decline was chiefly due to weaker prices for solar-grade silicon and semiconductor wafers. Overall, price effects reduced last year’s Group sales by around €700 million or over 14 percent. 2012’s EBITDA – earnings before interest, taxes, depreciation and amortization – came in at €787 million (2011: €1.1 billion). The corresponding EBITDA margin was 17.0 percent (2011: 22.5 percent). EBITDA dropped 29 percent against 2011 mainly because of excess solar-sector capacity. Solar-silicon prices halved within one year. WACKER’s chemical divisions, conversely, grew their EBITDA by some 15 percent relative to 2011, primarily due to accelerating demand for polymer products. WACKER’s bottom line for 2012 shows net income of €107 million, €249 million lower than a year earlier (€356 million).
During the first two months of 2013, WACKER’s chemical divisions continued to perform soundly, reporting satisfactory demand amid the usual seasonal effects of winter. At its polysilicon division, WACKER is currently selling much higher volumes than expected – with prices currently stable at a low level. At Siltronic, there is no indication yet of any fundamental turnaround. Demand for semiconductor wafers is still weak, and prices are low. In total, WACKER expects 2013’s first-quarter sales to outperform Q4 2012, but to fall short of the 2012 first-quarter figure, since polysilicon prices back then were almost twice as high as today.
For full-year 2013, WACKER forecasts sales at the year-earlier level – providing that no major trade barriers are introduced in the solar industry and that semiconductor demand picks up in the second half. Volumes at every division are expected to grow further. In the chemical divisions, sales and EBITDA are projected to be above 2012. At the same time, the Group anticipates a year-over-year decline in average semiconductor prices. Assuming that polysilicon prices remain at their Q4 2012 level, WACKER expects Group EBITDA in 2013 to be below last year’s figure.
“From today’s perspective, 2013 will not be an easy year for WACKER,” said CEO Rudolf Staudigl in Munich on Thursday. “The semiconductor market is currently moving sideways. Polysilicon prices are low, but have bottomed out. At the same time, demand growth is strong among our solar customers. Capacity utilization at our polysilicon plants is climbing fast. If this trend continues, there will be opportunities for higher prices. Our robust chemical business continues to be a key stabilizing factor for the Group.”
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