Leverkusen, Germany – Covestro has cut volumes and earnings projections for 2020 and is increasing cost-saving measures in response to the global coronavirus emergency.
In a statement the company said that core volumes are expected to shrink in 2020 compared with 2019. It said the first quarter volume was 4.1% smaller than the same period in 2019. EBITDA is likely to be between EUR 700m and EUR 1.2bn – down from the earlier guidance of EUR 1bn to EUR 1.5bn. The drop is because of lower volume sales.
Group EBITDA is likely to be about EUR 245m in the first quarter of 2020, but the company said it would confirm the number in its quarterly statement. This is scheduled for 29 April.
Cost savings include reducing capex by EUR 200m to around EUR 700m in 2020. The company's short-term savings programme has been increased by EUR 100m to EUR 300m.
Covestro said it has a strong balance sheet and significant extra liquidity if it needs it. This includes EUR 1.2bn in cash and a further undrawn revolving credit facility of EUR 2.5bn.
The company said it currently expects 'a recovery of the current situation starting in Q3 2020.'
