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Chemicals group Wacker Chemie sees gas supply bottlenecks easing

Published 27/10/2022, 07:47
© Reuters. FILE PHOTO: The logo of Wacker Chemie AG is seen at its manufacturing plant in the south-east Bavarian town of Burghausen, April 1, 2014. REUTERS/Michaela Rehle/File Photo
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By Antonis Pothitos and Anna Jaworska-Guidotti

(Reuters) -German chemicals company Wacker Chemie, which reported lower than forecast third-quarter earnings on Thursday, expects gas supply bottlenecks to ease and said risks of gas supply shortages for its facilities are low.

The energy-intensive chemicals sector is among industries most exposed to high energy prices and potential gas rationing in Europe since Russia invaded Ukraine in February.

The Munich-based group, which had included 200-250 million euros of additional costs from gas supply disruptions in an earlier outlook, said this was no longer necessary.

"As the levels in German gas reservoirs are now high, the company considers the risk of gas supply shortages for its own production facilities to be low," it said.

Wacker's core earnings (EBITDA) reached 457 million euros ($460 million) in the third quarter, up 2% on the year but below the 499 million euros expected by analysts, hit by high energy and raw material costs.

CEO Christian Hartel said the group had seen its orders drop since the summer, especially from the construction industry, a trend he expected to persist in the fourth quarter and early next year.

Wacker Chemie's shares were down 3.1% at 0820 GMT, among the weakest performers on the German mid-cap index.

But Wacker said the impact of energy, raw material and logistics costs on its full-year EBITDA would be slightly lower at around 1.3-1.4 billion euros, instead of 1.5 billion it had previously estimated.

Wacker also raised the lower end of its 2022 EBITDA guidance, seeing earnings of 2.1-2.3 billion euros compared with the previous floor of 1.8 billion euros.

Analysts at J.P.Morgan deemed the fourth-quarter guidance "optimistic".

One of the world's biggest suppliers of solar-grade polysilicon, Wacker has benefited from high prices of the material, as supply has tightened amid production issues and maintenance shutdowns.

© Reuters. FILE PHOTO: The logo of Wacker Chemie AG is seen at its manufacturing plant in the south-east Bavarian town of Burghausen, April 1, 2014. REUTERS/Michaela Rehle/File Photo

The company reported a 29% increase in quarterly sales to 2.13 billion euros, with polysilicon sales rising 52%.

($1 = 0.9932 euros)

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