LEVERKUSEN, Germany—Covestro A.G. plans to carry out a shares buyback of up to $1.75 billion of stock capital following what it said was its strongest quarter since its spin-off from Bayer in 2015.
Building on positive first-half trends, third-quarter earnings (EBITDA) at the Leverkusen-based materials company came in 50.2 percent higher at $1 billion, on sales of $4.1 billion, 16.9 percent higher than in the same period last year.
In an Oct. 24 announcement, the polyurethanes, polycarbonate and coatings major linked the gains to "ongoing robust demand" in its main customer-industries and positive margin performance.
With core volumes up by just 2.6 percent, the higher sales at Covestro mostly were due to improved selling prices, particularly in the polyurethanes segment, with a positive effect of 18.4 percent.
Encouraged by this performance, Covestro's management has decided to start a share-buyback for either up to $1.75 billion or up to 10 percent of the outstanding stock capital.
"We are currently enjoying tremendous growth momentum and we are delivering records in revenues, profitability and cash generation," CEO Patrick Thomas said. This has provided "the opportunity to return significant amounts of cash to our shareholders while preserving the ability to consider bolt-on acquisition opportunities."
Covestro also is working on a strategy to build on its current momentum, with digitization—of business processes, customer interfaces and business models—integral to its corporate plans, the company's statement continued.
"Currently, we are developing the new online platform which is expected to generate around $1.17 billion in sales as early as the end of 2019," said Markus Steilemann, member of the board of management overseeing marketing, sales and innovation.