German chemicals group Covestro benefits from recovery in China in Q2

BERLIN, Aug. 2 (Xinhua) -- The revenues of Covestro, a German company which produces a variety of polyurethane and polycarbonate based raw materials, rose by 18.9 percent year-on-year to 4.7 billion euros (4.8 billion U.S. dollars) in the second quarter (Q2) of 2022, "in particular on the back of higher average selling prices," the company said on Tuesday.

The company benefited from a "faster than expected recovery" in China, and overall demand remaining stable, said Covestro's Chief Financial Officer (CFO) Thomas Toepfer.

At the same time, earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 33.0 percent year-on-year to 547 million euros.

"This was mainly due to significantly higher raw material and energy prices, which were partially offset by a higher selling price level, and to lower volumes sold," the company said.

To prepare for an impending shortage of natural gas, Covestro is taking measures including switching to oil-based generators for steam generation.

"Due to the close links between the chemical industry and downstream sectors, a further deterioration of the situation is likely to result in the collapse of entire supply and production chains," the company warned.

Last week, Covestro lowered its outlook for the fiscal year of 2022, and is now expecting EBITDA of between 1.7 and 2.2 billion euros. "We are looking ahead to an increasingly challenging second half of the year," said Chief Executive Officer Markus Steilemann. (1 euro = 1.02 U.S. dollars)