Covestro performance down on lower prices in H1 2019

Leverkusen, Germany — Covestro had Group sales of EUR 6.4 bn the first half of 2019. This is lower by 16% than the same period in 2018.

EBITDA across the business fell 56% and hit EUR 901m the first half of 2019.

Declining prices of diisocyanates compared with last year's particularly high numbers hit performance. There were also falls in the price of polycarbonate, which Covestro also makes.

The company's polyurethanes business sales subsided by 24% between the first half of 2018 and 2019. They reached EUR 2.96bn in the first half of 2019. This compares with EUR 3.92bn the first half 2018.

At the same time, EBITDA in the division declined by 73%. It hit EUR 329 m the first half of 2019. This compares with EUR 1.22 bn the 2018 period.

Covestro said that prices were down 28%. At the same time volumes were up 0.3% and this added an 1.9% to the bottom line. Exchange rate variations also had a 1.9% benefit to the sales numbers. But lower prices fed into the lower EBITDA number for the division.

In the company's CAS business, sales grew by 2.2% between the first half of 2018 and 2019. They reached EUR 1.25bn the first half of 2019. This compares with EUR 1.22bn in the first half of 2018.

At the same time, EBITDA in the division rose by 7.6%. It reached EUR 296m the first half 2019. This compares with EUR 275m in the first half of 2018.

The change in performance is complex. Higher prices contributed to higher EBITDA. Meanwhile, owning more of Japan's DIC helped increase the number, and favourable exchange rates also helped. But the lower volumes took the shine off.

'Our half-year results met our expectations in the current economic environment,' said CFO Thomas Toepfer.

He continued: 'We confirm our guidance for the fiscal year.'

Toepfer expects weaker performance by the automotive industry in 2019 to be offset by stronger performances in construction and furniture markets.