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Wacker lowers 2019 key financial performance indicators
16 Oct '19
2 min read
Pic: Shutterstock
Wacker expects several key financial performance indicators for 2019 to be lower than previously projected. Full-year group sales are likely to be on par with last year (previous guidance: mid-single-digit percentage increase). EBITDA is anticipated to be some 30 per cent below last year’s level (previous guidance: 10 to 20 per cent lower than a year ago).
Net income is expected to be slightly positive (previous guidance: substantially below last year). Net cash flow should be clearly positive, but lower than last year (previous guidance: clearly positive and substantially higher than last year). As with the previous forecast, Wacker’s guidance does not include proceeds from insurance compensation, the company said in a press release.
“Our expectations have declined primarily because prices for polysilicon remain extremely low. Many market experts anticipated a price recovery for solar silicon in the second half-year – an assumption that was reflected in our previous guidance. But the average prices for this material have not improved. Instead, they fell further in the third quarter due to overcapacity created by Chinese competitors,” Rudolf Staudigl, Wacker’s CEO, as he explained the main reason for the guidance downgrade.
Additionally, the company announced that it is starting to work on a comprehensive program to prepare Wacker for future challenges by making the company more efficient and capable and achieving substantial cost savings.
According to preliminary and unaudited figures, group sales for Q3 2019 amount to €1,270 million. Wacker expects third-quarter EBITDA of €270 million. This sum includes special income of about €112 million in insurance compensation for the damage incurred following the incident at the Charleston site in 2017. The company booked this amount under the Wacker Polysilicon division in the reporting quarter.
Net income is expected to be slightly positive (previous guidance: substantially below last year). Net cash flow should be clearly positive, but lower than last year (previous guidance: clearly positive and substantially higher than last year). As with the previous forecast, Wacker’s guidance does not include proceeds from insurance compensation, the company said in a press release.
“Our expectations have declined primarily because prices for polysilicon remain extremely low. Many market experts anticipated a price recovery for solar silicon in the second half-year – an assumption that was reflected in our previous guidance. But the average prices for this material have not improved. Instead, they fell further in the third quarter due to overcapacity created by Chinese competitors,” Rudolf Staudigl, Wacker’s CEO, as he explained the main reason for the guidance downgrade.
Additionally, the company announced that it is starting to work on a comprehensive program to prepare Wacker for future challenges by making the company more efficient and capable and achieving substantial cost savings.
According to preliminary and unaudited figures, group sales for Q3 2019 amount to €1,270 million. Wacker expects third-quarter EBITDA of €270 million. This sum includes special income of about €112 million in insurance compensation for the damage incurred following the incident at the Charleston site in 2017. The company booked this amount under the Wacker Polysilicon division in the reporting quarter.
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