Covestro sees 2023 EBITDA at lower end of forecast range

(Reuters) – German chemicals maker Covestro on Tuesday said it expects its 2023 core profit to be at the lower end of its forecast range after posting a 30% drop for the second quarter due to lower demand and falling volumes.

Covestro, as the whole German chemicals sector, is facing an unprecedented drop in order volumes as customers reduce stocks in a high inflationary environment that dampens demand.

“We currently still do not anticipate an economic recovery in the remainder of the year,” Chief Financial Officer Thomas Toepfer said in a statement.

The company, whose main products include foam chemicals used in mattresses, car seats and insulation for buildings, said earnings before interest, tax, depreciation and amortization (EBITDA) fell 29.6% to 385 million euros ($423 million) in the April-June period, beating analysts’ average estimate of 378 million euros in a company-provided poll.

Revenues in the period fell 20.9% to 3.7 billion euros, which is below a 4.0 billion euros estimate.

The group said it sees EBITDA between 240 million and 340 million euros in the third quarter, and it has predicted full year EBITDA to be in a range of 1.1 billion to 1.6 billion euros.

($1 = 0.9102 euros)

(Reporting by Bartosz Dabrowski and Andrey Sychev in Gdansk, editing by Kirsti Knolle)