shares in this article
For the months from April to June, the group expects significantly higher operating profits than analysts. In a statement from the previous evening, the group spoke of persistently strong demand, but also of risks associated with rising energy and commodity prices. WACKER CHEMIE is one of the few stocks to show a price increase this year. With an increase of about a quarter, the group ranks in the first group of the average value index.
Some market investors had already speculated on an increase in profit outlook after the strong first quarter. Chief Executive Christian Hartel remained cautious and promised only the upper end of the € 1.2 to € 1.5 billion range of earnings before interest, taxes, depreciation (Ebitda).
Business is now booming in the current quarter as well. In the second quarter alone, the operating result is expected to be around 600 million euros, the company announced the night before in Munich. Sales are expected to be around € 2.1 billion. According to WACKER CHEMIE, analysts had recently expected an operating profit of 498 million euros.
Against this backdrop, the company will review and adjust its earnings forecast for 2022 in the coming weeks. “In doing so, both the currently persistently strong demand and the risks arising from rising energy and commodity prices, as well as geopolitical developments, are taken into account,” the note reads. Under current plans, WACKER CHEMIE will publish its revised full-year forecast as part of its semi-annual report on July 28th.
UBS analyst Geoff Haire had however previously classified the profit targets as conservative and now sees his latest estimates confirmed with the company’s announcement. If polysilicon prices remain at first-half levels and commodity prices do not continue to rise, the upper limit of the new operating profit forecast could be more than € 2 billion, the industry expert writes Tuesday.
Among other things, WACKER CHEMIE is benefiting from the high demand for the polysilicon raw material, which is important for the solar and chip industries. Furthermore, business is good for the Siltronic holding company, which supplies semiconductor wafers to chip companies, which use them to make electronic chips. Company leader Hartel had already increased the sales target from around € 7 billion to around € 7.5 billion at the end of April.
In the first quarter, WACKER CHEMIE benefited from the fact that the Group had already stocked up on raw materials and energy at lower prices last year. The increase in sales prices caused an increase in sales and profits.
WACKER CHEMIE shares recover – Higher guide announced
An increase in earnings forecasts announced by WACKER CHEMIE on Tuesday was well received by investors. The price of the specialty chemicals group, which was last punished by the market at large, eventually rose 0.31 percent in XETRA trading to EUR 163.50, after falling to its lowest level in nearly three weeks the day before. It turned back to the 21-day average, which runs at € 169.62.
After a surprisingly positive quarter, WACKER CHEMIE plans to revise and increase its earnings forecast for 2022 in the coming weeks. The new annual target for operating profit (EBITDA) could exceed € 2 billion, UBS analyst Geoff Haire said in a first comment. But investors will have to wait for certainty: WACKER intends to publish the revised targets as part of the half-yearly report on July 28th. FRANKFURT / MUNICH (dpa-AFX)
The leverage must be between 2 and 20
More news about WACKER CHEMIE AG
Photo sources: WACKER Chemie