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Covestro Records Solid Core Volume Growth in Second Quarter of 2019 July 29 2019

2019 Lucintel Composites Market Insights, July 29, 2019

Based on the results of the first half of 2019, Covestro has confirmed its guidance for the current fiscal year. As expected, ongoing intense competitive pressure and uncertainties in major sales markets persisted into the second quarter. Whereas core volumes rose by 1.1%, Group sales fell to EUR 3.2 billion (–16.9%) due to lower selling prices. At EUR 459 million, EBITDA stabilized at the level of the first quarter of 2019 (EUR 442 million), but remained well under the outstanding result achieved in the prior-year quarter (–53.4%). The decline in earnings resulted mainly from lower margins in the Polyurethanes and Polycarbonates segments. Net income declined to EUR 189 million, while free operating cash flow amounted to minus EUR 55 million on account of lower cash flows from operating activities and higher investments.

In the Polyurethanes segment, core volumes grew by 0.7%. Sales declined 24.3% to EUR 1,489 million, driven by lower selling prices as a result of increased competition. The downturn in selling prices was also evident in EBITDA, which decreased to EUR 172 million (–70.5%).

Core volumes in Polycarbonates rose by 4.4% over the prior-year quarter. Whereas the electrical and electronics industry and the construction sector contributed to this growth, volumes in the automotive industry declined. Sales were down 15.0% to EUR 898 million in the second quarter of 2019. EBITDA in the Polycarbonates segment was 46.0% lower, amounting to EUR 154 million, mostly due to the drop in selling prices.

The Coatings, Adhesives, Specialties segment saw a decline in core volumes of 4.7%. As a result, sales were down 1.3% to EUR 621 million.

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