Wacker Chemie's third-quarter net profit fell 19.8% year on year to €124.9m ($178.4m), partly because of spikes in raw materials costs which offset higher sales, the Germany-based chemical producer said on Friday.
Sales for the three months to September 2011 inched up by 0.9% to €1.28bn, with earnings before interest and tax (EBIT) slipping by 15.8% to €197.2m, the company said in a statement.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter were down 6.6% year on year to €317.6m, Wacker said.
The EBIT margin slipped to 15.4% in the third quarter of 2011 from 18.5% in the same period last year, it said.
The company said ethylene was 20% more expensive in the third quarter compared with the same period last year, silicon metal prices were up almost 30% year on year and vinyl acetate monomer (VCM) costs increased by more than 30% over the same period.
“In addition, start-up costs for commissioning the new polysilicon production facility at Nunchritz [in
For January-September 2011, the company posted a 9.8% year-on-year improvement in net profit to €435.6m, with sales rising by 10.2% to €3.90bn.
The EBIT for the nine-month period grew by 11.1% to €658.2m, while EBITDA showed a 10.1% increase to €993.4m, Wacker said.
The company said it is “more cautious” with its full-year forecast, with group sales expected to hit about €5bn, while EBITDA will be at the same level as 2010.
“Given the economic uncertainties, our customers are being more cautious with their orders, while prices for our key raw materials remain very high,” said Wacker CEO Rudolf Staudigl in the statement.
“The demand for our products, however, is as strong as ever in many areas. Even if the fourth quarter turns out to be weaker than originally anticipated, 2011 will be comparable to last year’s record results,” said Staudigl.
Total sales at Wacker Silicones fell almost 4% in the third quarter to €405.2m, compared with the same period last year.
“The weak US dollar was a major factor in sales not quite matching the prior year figure,” the company said. Third-quarter EBITDA also declined to €52.0m, a 33% drop from last year.
Total sales at the company’s polymers division increased to €257.9m, a 14% rise from the same period last year.
The company said its sales benefited from robust demand for dispersions and dispersible polymer powders. EBITDA fell in the third-quarter to €39.2m, a 1% drop from last year, despite strong sales.
Total sales at Wacker Biosolutions fell 8% to €34.1m, with EBITDA dropping to €3.1m from €5.5m from the same period last year, the company reported.
“The main reason for [the] year on year decline [at Biosolutions] was low capacity utilisation at several production facilities,” the company said.
Wacker Polysilicon’s total sales grew by 8% to €378.2m compared to the same period last year. The division's EBITDA was down 6% to €179.4m.
The company said weaker business trends and the resultant decline in momentum are slowing demand for the group's products and are affecting customer ordering patterns.
“Due mainly to the trends expected in its semiconductor and polysilicon business during the third quarter of 2011, Wacker may not achieve the sales and earning figures previously forecast for full-year 2011,” the company added.