Leverkusen, Germany — After a strong first quarter in 2017, Covestro says that it has raised its full year financial forecast.
The group says that core volumes increased by 9% in the first quarter of 2017 compared to the same period in 2016. It added that capacity, plant utilisation and associated improved margins enabled the company to boost its earnings before interest taxation depreciation and amortisation (EBITDA) to EUR 846 m up 66.5% on the first quarter of 2016.
Patrick Thomas, CEO said: "for the remainder of this year we remain optimistic and thus have raised our forecast." The company now expects free cash flow to be significantly above the average of the last three years and expect return on capital employed to significantly exceed the level in 2016.
In Covestro’s polyurethane segment, prices were up 25.8% in the first quarter of 2017 compared to 2016, which led to sales growth of almost 25% to EUR 3.6 bn. The company said that “sales and profitability in our three core markets of China, Germany and the US are more and more balanced.”
Volumes in the polyurethane segment rose by 6.8% year-on-year, the company said with demand from global construction as well as furniture and mattress industries in the NAFTA and APAC regions. EBIT reached EUR 482 m and "more than doubled year-on-year."
The company continued that it is working on converting its plant in Brunsbuttel, Germany and expects to double MDI production capacity there to approximately 400 kT/year in 2018.
In the company's coatings, adhesives, specialties segment, which is predominantly polyurethane-based, segment sales increased by 8.1% compared to the first quarter of 2016 with significant volume growth in the Asia-Pacific region.
EBITDA was EUR 146 m up 5% on the previous year and sales in the sector grew 10% to EUR 564 m.