LEVERKUSEN, Germany—Covestro A.G. has reported major falls in its first half sales and earnings (EBITDA), due to ongoing intense competitive pressure and uncertainties in major sales markets.
Group sales dropped 16.4 percent year-on-year to $7.1 billion, due to lower selling prices driven by competition, the company reported on July 24.
Selling prices remained "well below" the prior-year levels, particularly in the company's key polyurethanes and polycarbonates segments, leading to a 56 percent drop in earnings at $1 billion.
Core volumes remained stable during the six-month period, registering a marginal drop of 0.4 percent, compared to 2018.
In the second quarter, group sales plunged 16.9 percent to $3.6 billion despite a 1.1 percent year-on-year volume increase.
Earnings more than halved—53 percent—at $511 million, compared against the prior year's "outstanding result," Covestro said.
Increased competition drove selling prices down, resulting in a decline in second quarter sales in the polyurethanes segment of 24.3 percent year-on-year to just under $1.67 billion despite a 0.7 percent increase in core volumes.
Segment EBITDA fell sharply by 70.5 percent to $192 million, due in large part to the downturn in selling prices.
The polycarbonates segment also registered a 15 percent decline in sales at just under $1 billion, although core volumes rose by 4.4 percent over the three-month period.
The segment saw a decline in volumes in the automotive industry, while shipments to the electrical and electronics and construction industries rose.
Segment EBITDA came in 46.0 percent lower than second quarter 2018, at $171 million, due to the drop in selling prices.
