Germany’s Covestro Q2 net income falls sharply amid higher feedstock, energy prices

Author: Nurluqman Suratman

2022/08/02

SINGAPORE (ICIS)–Covestro’s second-quarter net income fell by 55.7% after earnings were hit by higher raw material and energy prices, the German chemicals major said on Tuesday.

– Q2 group sales were supported by higher average selling prices.
– Q2 EBITDA losses due to higher feedstock and energy prices were partially offset by a higher selling price level.

OUTLOOK

Covestro last week adjusted its outlook for the year as a result of recent significant further increase in energy costs and a further weakening of the global economy.

“In this second half of the year, the macroeconomic risks have once again increased significantly, particularly with regard to the very high energy costs and uncertainties in gas supply at our German sites,” said Thomas Toepfer, the CFO of Covestro.

The company is initiating various measures to reduce its gas requirements in Germany in the short term, such as by switching to oil-based steam generators.

Covestro is also “continuously working to improve existing production technologies and roll out new ones in order to further reduce gas and
energy consumption”.

“If gas supplies are rationed in the further course of the year, this could result in partial load operation or a complete shutdown of individual Covestro production facilities, depending on the level of the cutback,” it said.

“Due to the close links between the chemical industry and downstream sectors, a further deterioration of the situation is likely to result in the collapse of entire supply and production chains,” Covestro added

https://www.icis.com/explore/kr/resources/news/2022/08/02/10790976/germany-s-covestro-q2-net-income-falls-sharply-amid-higher-feedstock-energy-prices