Wacker Chemie Sees 2014 Profit Rising 10% After China AccordSheenagh Matthews
Wacker Chemie AG, the German chemical maker that turns 100 this year, expects operating profit to gain more than 10 percent in 2014 on a recovery in prices and an agreement with China on polysilicon exports.
Sales will rise by a “mid single-digit” percentage, and net income will improve, the Munich-based company said today in a statement.
Wacker agreed with the Chinese Ministry of Commerce not to sell polysilicon produced at its European plants below a minimum price in China, it said today in a separate statement. In return, the ministry will refrain from applying anti-dumping and subsidy tariffs.
“The agreed solution is in the best interests of both Wacker and China’s solar industry,” Chief Executive Officer Rudolf Staudigl said. “We can continue supplying our high-quality material at competitive prices to our Chinese customers.”
The shares gained as much as 2.5 percent in Frankfurt trading and were up 1.2 percent at 96.34 euros as of 10 a.m. local time. The stock has risen 20 percent this year for a market value of 5 billion euros ($7 billion).
The agreement with China takes effect on May 1 and lasts through April 2016, with minimum prices based on market prices, Wacker said today. Prices for the solar panel material have stabilized in recent months on stronger demand. The German company and the Chinese ministry agreed not to disclose any further details.
Wacker experienced “healthy” demand across all business divisions in the first two months of this year with sales rising especially for polysilicon, it said. Every division will contribute to this year’s increase in volume, Wacker said.
“After two challenging years, I am more optimistic about 2014,” Staudigl said. “We anticipate that our polysilicon business will increase its sales. This trend will not only be supported by higher volumes. We also see chances for a slight recovery in prices.”
Wacker will propose an annual dividend of 0.50 euros for last year after paying 0.60 euros for the previous year.