Coscom, a leading chemical company headquartered in Germany, said on Thursday that its first-quarter net profit rose 37.6% year-on-year to 644 million euros, thanks to the strong pricing of its foam and plastics offsetting the impact of unfavorable exchange rate factors. The performance of the paint and coatings business is weaker.
The company said that sales for the three months ended March 2018 had increased by 5.4% year-on-year to 3.78 billion euros, although sales volume fell 1.7% but was offset by a 14.3% increase in prices.
Tight supply, coupled with production shutdowns, continued strong pricing for diphenylmethane diisocyanate (MDI) and toluene diisocyanate (TDI). Under this support, the first quarter of polyurethane tax interest depreciation and amortization (EBITDA) growth 36.1% to 637 million euros.
The increase in price caused the polycarbonate EBITDA to increase by 30.6% compared to the same period to 303 million euros. At the same time, Covestro said that due to falling sales, rising raw material costs and unfavorable exchange rate factors, its coatings, adhesives and specialty chemicals The profit of the product decreased by 15% year-on-year to EUR 136 million.
It is expected that BASF's TDI plant in Ludwigshafen, Germany, will restart in the second quarter of 2018, and that the partial tightening in the European TDI market may be relaxed. Since the start of 2016, this 300,000-ton/year factory Many problems encountered are closely related to market supply and price increases.
The serious supply problems in Covestro's core markets contributed to the company's performance last year. In 2017, net income increased 2.5 times year-on-year to 2.01 billion euros.
The outgoing chief executive Patrick Thomas described TDI profit growth as 'profit margin soaring' far beyond the profitability of a new factory within reasonable expectations.
Earlier this year, he said that the soaring TDI profit margin increased the Group’s revenue by 500 million Euros in 2017. In 2018, as prices are expected to return to normality in the second half of the year, it is expected that the profit margin will be reduced by half.
Coscomo’s chief cultural officer and upcoming new CEO Markus Steilemann said that despite some anticipated loosening of supply in the major markets, the company is still on the road to sustained strong performance in 2018. He had predicted 2018 EBITDA will be comparable to 2017.
'We achieved a successful start in the first quarter and it went smoothly all year,' said Steilemann.
He added: 'This year, while maintaining our high core business volume, we compared the outstanding performance of the same quarter last year and significantly improved all other key data again,' and pointed out that the second quarter results may be stronger than the same period last year.