Wacker Quarterly Profit Tops Estimates on Building ChemicalsSheenagh Matthews
Wacker Chemie AG, Europe’s largest polysilicon maker, posted second-quarter profit that beat analyst estimates as construction-chemical sales increased. The stock rose to the highest in almost 17 months.
Earnings before interest, tax, depreciation and amortization fell 22 percent to 188.2 million euros ($249.9 million), the Munich-based company said today in a statement. Analysts estimated profit at 171.4 million euros.
The manufacturer reiterated a full-year forecast today for sales to drop about 3 percent to 4.5 billion euros and earnings to fall because of lower selling prices for solar silicon and semiconductor wafers. An agreement between the European Union and China on solar products may mark an upturn for photovoltaics, the manufacturer said.
“Our chemical divisions performed well during the April-through-June period,” Chief Executive Officer Rudolf Staudigl said in the statement. “In polysilicon, low price levels and trade-policy risks remain a challenge.”
Wacker Chemie jumped as much as 6.5 percent to 73.94 euros, the highest intraday price since March 2, 2012, and was trading up 5 percent at 10:43 a.m. in Frankfurt. Wacker, which in November was trading at the lowest since the company first sold stock in 2006, has gained 47 percent this year for a market value of 3.8 billion euros.
Second-quarter sales declined 5.9 percent to 1.15 billion euros. Net income plunged 75 percent to 15.1 million euros.
Wacker’s profitability has been held back as manufacturing capacity for polysilicon exceeded demand and the company faced increased competition from low-cost Asian producers. That prompted Wacker to delay output at a new polysilicon factory in Tennessee by 18 months.
Chinese competition against European manufacturers has now been limited after negotiators reached an agreement on July 27 to curb EU imports of solar panels from China in exchange for exempting the shipments from punitive tariffs.
The accord would set a minimum price for imports of the renewable-energy technology from China. In return, Chinese manufacturers would be spared EU levies meant to counter below-cost sales, a practice known as dumping.
Wacker Chemie is majority-owned by the founding family’s holding company, Dr. Alexander Wacker Familiengesellschaft mbH.