Lower polysilicon volume has Wacker sales down 16 percent for 2Q

MUNICH—Wacker Chemie A.G., an international supplier of silicone, polysilicon, polymers and biosolutions, saw net sales drop 16 percent year-over-year to about $1.63 billion, according to second quarter financial results for Wacker.

Net sales came in at about $1.9 billion in the second quarter of 2023.

"This trend was due primarily to much lower solar-grade polysilicon volumes," Wacker President and CEO Christian Hartel said in a July 26 investor call.

Net sales in 2Q 2024 essentially were "on par" with 1Q 2024, which registered at $1.62 billion—a one percent decline for 2Q numbers.

Still, the chemical industry—and indeed, the entire global chemical economy—seems to be pointed in the right direction.

"Even though a sustained turnaround is not yet in sight, we are seeing the first signs that the economy is recovering," Hartel said. "Inflation rates are dropping at a faster rate than expected, and energy and raw material prices have eased. Order intake in the chemical industry has improved. We are also seeing a gradual increase in demand again in some areas."

In Wacker's chemical divisions, sales and earnings actually were up over the first quarter, Hartel noted.

According to Wacker, EBITDA for 2Q was down 37 percent year-over-year, at $173.8 million against an EBITDA of $278.1 million in 2Q 2023.

This decrease also was attributed to lower volumes, according to Hartel. EBITDA margin in 2023 was 14.6 percent, against an EBITDA margin of 10.9 percent in this year's second quarter.

The overall group margin in 1Q 2024 was 11.6 percent, according to Wacker financials.

 

Group sales varied by geographic region, according to Wacker.

• Asia: Net sales for 2Q 2024 totaled $586.5 million, a 33-percent decrease against 2Q 2023;
• Americas: Net sales for 2Q 2024 totaled $299.8 million, a 3-percent increase over 2Q 2023;
• Europe: Net sales for 2Q 2024 totaled $619.1 million, a 5-percent decrease against 2Q 2023.

 

Wacker Chemie comprises Wacker Silicones, Wacker Polysilicon, Wacker Polymers and Wacker Biosolutions.

Wacker Silicones: Net sales for 2Q 2024 totaled $780.9 million, a 3-percent increase over 2Q 2023 ($759.2 million).

"Demand developed well in the industrial coatings sector, (and) in coatings and consumer-related application areas such as textiles," according to Hartel.

EBITDA for 2Q 2024 in Wacker Silicones registered $97.8 million, a 73-percent year-over-year increase ($56.5 million in 2Q 2023).

"The earnings trend benefited, above all, from positive volume and product mix effects," Hartel said. "The year-on-year decline in raw material and energy prices and better plant utilization also had a positive impact here."

 

Wacker Polymers: Net sales for 2Q 2024 totaled $422.5 million, a 7-percent year-over-year decrease ($453 million in 2Q 2023).

"The main reason for this decline was lower sales prices at slightly increased volumes," Hartel said.

EBITDA for 2Q 2024 in Wacker Polymers registered $64.1 million, a 23-percent year-over-year decrease ($82.6 million in 2Q 2023).

"The earnings trend was affected primarily by lower prices," according to Hartel. "In contrast, the year-on-year reduction in raw material and energy costs benefited results."

 

Wacker Biosolutions: Net sales for 2Q 2024 totaled $106.5 million, an 8-percent increase year-over-year ($98.9 million in 2Q 2023).

"The biopharmaceutical business showed a particularly positive development," Hartel said. "Lower prices for products in this division's established business had a negative impact on sales in a year-over-year comparison."

EBITDA for Wacker Biosolutions in 2Q 2024 registered $1.2 million, which actually was about $1.7 million higher than EBITDA in 2Q 2023, which was a $543,000 loss.

However, compared to 1Q 2024, EBITDA was down about 76 percent, according to Wacker.

 

Wacker Polysilicon: Net sales for 2Q 2024 totaled $252 million, a 55-percent decrease year-over-year ($557.2 million in 2Q 2023).

"The main reason for this decline compared to the previous year were significantly lower solar-grade polysilicon sales volumes," according to Wacker.

EBITDA for Wacker Polysilicon in 2Q 2024 registered $59.7 million, a 65-percent decrease against an EBITDA of $169.4 million in 2Q 2023.

However, compared to 1Q 2024, EBITDA was up 27 percent, according to Wacker financials.

"Among other items, lower energy costs had a positive impact here," Hartel said.

 

Wacker expects full-year net sales to be down in 2024 against 2023, at between $6.5 billion and $7.1 billion in 2024.

EBITDA now is projected at between $651.6 million and $868.8 million for the full year.

"The EBITDA margin is likely to be markedly lower than last year, with capital expenditures slightly below the prior year figure," Hartel said. "Investments will significantly exceed depreciation and amortization, which is expected at ($488.7 million) in 2024.

"In particular, our business with specialty silicones showed a positive development of late. In our polymers dispersions business, we are witnessing a recovery in some areas," Hartel continued. "Demand has increased considerably again from the manufacturers of consumer products such as paints and packaging, for example.

"In our polysilicon business, we have further increased the share of polysilicon destined for the semiconductor industry. And biopharmaceuticals have been the growth drivers in our biotechnology business in recent months."