German chemicals company Wacker Chemie AG (WCHG.DE) on Friday reported a 56% drop in first-quarter core profit, though slightly better-than-expected, citing lower volumes and higher energy prices.
The specialty chemicals maker reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of 281 million euros ($309.4 million) compared to 644 million euros a year ago, and above the 275.6 million euros expected by analysts in a company-provided poll.
Wacker Chemie, which has so far managed to offset sharp cost increases in energy, raw materials and logistics by raising prices of its products, is facing a slowdown in sales as customers trim inventories and demand in China remains subdued.
It also confirmed its earlier forecast for 2023 EBITDA of between 1.1 billion and 1.4 billion euros and sales in a range of 7 billion to 7.5 billion euros.
In March, all of Wacker's divisions had higher sales than at the beginning of the year, CEO Christian Hartel said in a statement.
"As of yet there are no clear signals in the market that the second quarter will be substantially stronger, not even from China," Hartel said.
Hartel also said that the second half of 2023 would likely be better overall than the first half.
The Munich-based chemical group reported a 16% year-on-year decline in first-quarter sales reaching 1.74 billion euros, in line with analysts' expectations.
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