Covestro's Q2-2019 net income falls 69% as competition intensifies, prices fall

Net income drops to $210.75mn

Dr Markus Steilemann, CEO of Covestro.
Dr Markus Steilemann, CEO of Covestro.

Based on the results of the first half of 2019, Covestro has confirmed its guidance for the current fiscal year. As expected, ongoing intense competitive pressure and uncertainties in major sales markets persisted into the second quarter.

Whereas core volumes rose by 1.1%, group sales fell to $3.57bn (–16.9%) due to lower selling prices. At $511.85mn, EBITDA stabilised at the level of the first quarter of 2019 ($492.85mn), but remained well under the outstanding result achieved in the prior-year quarter (–53.4%).

The decline in earnings resulted mainly from lower margins in the polyurethanes and polycarbonates segments. Net income declined to $210.75mn, while free operating cash flow amounted to minus $61.33mn on account of lower cash flows from operating activities and higher investments.

The economic situation is still challenging, since global economic and political uncertainties remain,” said CEO Dr Markus Steilemann.

“Nonetheless, we reached our earnings targets and were able to increase our core volumes again in the second quarter. This underscores the trend towards more sustainable solutions, which we offer to many industries.”

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