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COVESTRO SALES PLUNGE EBITDA DOWN 29.6%

Covestro sales plunge, EBITDA down. In Q2 2023, Covestro’s financial performance reflected the challenging economic conditions, with group sales decreasing by 20.9% to €3.7 billion.

EBITDA also fell by 29.6% to €385 million.

Furthermore, the net income took a significant hit, plummeting 76.9% to €46 million.

Covestro reaffirms its fiscal 2023 guidance initially announced in April, which estimated an EBITDA ranging between EUR 1.1 billion and EUR 1.6 billion.

The company currently foresees its results to lean towards the lower end of these specified ranges for all primary indicators.

Covestro is one of the world’s leading producers of polycarbonate (PC), a versatile and high-performance plastic.

Polycarbonate is used in many sectors, from automotive, electrical and electronics, construction, medical devices to the IT industry.

LANXESS ACTION PLAN FIGHTS SALES DECLINE

LANXESS action plan fights sales decline. The company launches “FORWARD!” action plan to cut costs and improve efficiency amidst an 11.1% decline in Q2 sales to €1.778 billion.

CEO Matthias Zachert aims to offset a 57.7% drop in EBITDA by saving €150 million annually from 2025, aided by contributions from the Microbial Control business acquired from IFF.

LANXESS reduced its net debt by 25% to €2.9 billion. The forecast for the year projects an EBITDA between €600-650 million, while Zachert advocates for an industry-specific electricity tariff and other competitive conditions.

The forward plan includes a hiring freeze and cost-discipline measures, with long-term plans for structural changes to increase efficiency.

PC SURGING TRADE MAY 2023

PC surging trade May 2023. The Polycarbonate (PC) trade landscape within the EU27 has undergone a significant transformation during the first five months of 2023.

Data from Eurostat shows import volumes in May surged to a record high of 26,783 metric tons, marking a substantial increase compared to the same period last year.

However, exports experienced a notable decline, dropping to 15,516 metric tons in May 2023. The data reflects significant changes in the region’s PC trade dynamics, reflecting both lower demand in Europe and increased capacity in China.

Disclaimer: The information presented in this article is based on available data as of August 2, 2023. For the most up-to-date and accurate data, readers are encouraged to refer to official sources and relevant market experts.

EU27 PMMA IMPORTS SURGE IN MAY 2023

EU27 PMMA imports surge, according to the latest data from Eurostat. EU27 has witnessed a dramatic rise in polymethyl methacrylate (PMMA) imports in 2023, hitting a two-year peak in May with 7,792 metric tonnes (MT).

The surge is largely attributed to softer demand in Asia coupled with a more favourable cost position. These factors have led to an influx of PMMA into the EU27 market.

This higher supply amidst weaker domestic demand has squeezed margins for European suppliers. Increased competition from competitively priced imports has further dampened prospects for these suppliers.

The low demand and competitive imports situation is likely to continue, with no signs of a turnaround. European suppliers may have to endure these market conditions, possibly till the end of the year.

EURO ZONE INFLATION FALLS TO 5.3%

Euro zone inflation falls. The Euro Zone’s yearly inflation rate is projected to fall to 5.3% in July 2023. Thir represents a decline from the 5.5% in June, based on an initial estimate provided by Eurostat, the statistical authority of the European Union.

Upon dissecting the chief constituents of the Euro Zone’s inflation, expectations see food, alcohol, and tobacco to post the steepest annual rate in July, at 10.8%, down from 11.6% in June.

Services are next, projected to achieve a rate of 5.6%, an increase from June’s 5.4%. Non-energy industrial goods follow, likely hitting 5.0%, a reduction from 5.5% in the preceding month.

In contrast, energy appears set to log a negative value of -6.1%, a sharper decline than June’s -5.6%.

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