Materials manufacturer Covestro, among the world’s largest polymer companies, including products for the textiles, synthetic leather and show industries, reported increases in net income and earnings for the second quarter ended June 30.
Formerly Bayer MaterialScience, Covestro spun off from parent Bayer AG in October. On Tuesday, the diversified manufacturer, which in the textiles sector produces ingredients for polyester and specialized coatings, said earnings before interest, taxes, depreciation and amortization increased 8.8 percent year-over-year to 542 million euros, or $595.3 million, mainly driven by higher core volumes in the polyurethane and polycarbonate segments.
Net income increased 51.3 percent year-over-year to 230 million euros, or $252.6 million. Group sales declined 6.9 percent year-over-year to 2.99 billion euros, or $3.28 billion, in the quarter. Covestro said the primary reason for this was a drop in selling price levels in all segments, polyurethanes in particular, mainly caused by lower raw-material prices. Group sales were also slightly negatively affected by currency effects.
Group core volumes in kilotons in the quarter increased 7.7 percent year-over-year.
“We have recorded strong results in the second quarter and continued the satisfying development of the first quarter. Our plant utilization rates are improving, allowing us to realize higher-core volumes and increase profitability,” said chief executive officer Patrick Thomas. “On the back of a positive development in the first half of 2016, we are raising our outlook for the full year.”
The company, based in Leverkusen, Germany, expects a mid- to high-single-digit percentage increase in core volumes. EBITDA for the second half of the year is expected to be at least at the level of the same period in 2015.
According to plan, in the second quarter, Covestro repaid the remaining loan of 810 million euros, or $890 million, from Bayer, and reduced financial debt to 2.2 billion euros, or $2.4 billion, from 2.9 billion euros, or $3.2 billion.
For the six months, EBITDA rose 14.9 percent to 1.1 billion euros, or $1.2 billion, while sales fell 6.4 percent to 5.9 billion euros, or $6.5 billion, year-over-year due to lower selling price levels in all operating segments. Net income of the Covestro Group gained 54.3 percent to 412 million euros, or $452.5 million.
Covestro’s main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries, including textiles and footwear. It has 30 production sites around the world and at the end of 2015, employed about 15,800 people.