Wacker Chemie AG’s total sales in Q1 2020 declined slightly versus a year ago, but its EBITDA was substantially higher, both year over year and quarter over quarter. The Munich-based chemical company generated sales of Euro 1 197.5 million in the reporting quarter (Q1 2019: Euro 1 235.7 million), down 3 percent year over year. This slight decline was prompted by lower prices for solar-grade polysilicon and for standard silicones and by volumes that, on balance, were somewhat lower. Exchange-rate differences positively influenced the sales trend year over year. Compared with a quarter ago (Euro 1 155.5 million), sales rose by 4 percent mainly due to volume growth and better prices.
In Q1 2020, WACKER posted EBITDA (earnings before interest, taxes, depreciation and amortization) of Euro 174.1 million. That was a rise of 23 percent versus a year earlier (Euro 142.0 million). Higher plant utilization rates and cost-reduction measures supported this strong growth. Relative to the preceding quarter (Euro 157.8 million), EBITDA climbed 10 percent. The EBITDA margin for January through March 2020 was 14.5 percent, compared with 11.5 percent in the same period last year. A quarter ago, the margin was 13.7 percent.
In the reporting quarter, Group EBIT (earnings before interest and taxes) also rose markedly, coming in at Euro 69.8 million (Q1 2019: Euro 0.1 million). That corresponds to an EBIT margin of 5.8 percent (Q1 2019: 0.0 percent). Aside from the factors already mentioned, EBIT benefited from a year-over-year drop in depreciation. Depreciation decreased 27 percent to Euro 104.3 million (Q1 2019: Euro 141.9 million). One of the factors in this decline was the effect of an impairment charge of Euro 760 million on polysilicon facilities, which WACKER recognized on December 31, 2019. This effect reduced ongoing depreciation on these facilities. Net income for the quarter totaled Euro 68.9 million (Q1 2019: Euro -5.5 million) and earnings per share came in at Euro 1.31 (Q1 2019: Euro -0.16).
On presenting its 2019 Annual Report in mid-March, the company clearly stated that its forecast for the current year was conditional, due to the coronavirus’s potential economic impact. The virus-related risks to the company’s earnings and financial position are becoming ever-more apparent. At present, it is not possible to reliably estimate either how strongly or for how long government measures to contain the virus’s global spread will dampen the company’s business activi-ties. For this reason, WACKER is currently unable to provide guidance on its future performance, with its customary level of reliability. WACKER has thus decided not to issue a forecast for the time being.