Leverkusen, Germany – Earnings at Covestro for 2018 are likely to be down on 2017, the company said in a note to investors in the third week of November.
Covestro revises 2018 year end forecast downwards
'Intense competition, increased costs and provisions,' were all cited along with low water levels in the Rhine as reasons behind the reduction.
The firm said it now expects a low-single-digit percentage increase in core volume growth this year. Previously the company said it was expected to be slightly higher.
The company also said that low water levels in the River Rhine were hitting business
The River Rhine is a key transport route for the European chemical industry. This is because many of the industry's plants are located on the river. Low water levels reduce the number of chemical barges that can navigate the river. This means lower production for plants on the river, such as Leverkusen and Dormagen.
Low water levels also mean that companies need to incur higher freight costs on rail and road alternatives as they try to maintain production levels and ship product to customers.
Covestro added that EBITDA for 2018 is expected to be lower than the EUR 34.4bn recorded in 2017. It is making accounting provisions to cover the costs of its efficiency programme dubbed Perspective.