Covestro AG has started 2017 strong, with a 9 percent increase in sales to “core volumes” and significant increases in sales and earnings in the first quarter of the year.
The “still-strong” demand for “innovative polymers” drove earnings before interest, taxes, depreciation and amortization (EBITDA) up 66.5 percent at 846 million euros ($921.2 million) compared with the same period the year before for the first quarter of 2017, the German materials supplier said in an April 25 news release.
Net income also rose by over 157 percent to 468 million euros ($509 million) in the three months to the end of March, compared to 182 million euros ($198.2 million) in 2016.
“The high demand for our products indicates that innovative plastics play an important role in mastering the challenges posed by global megatrends such as urbanization, climate change, or the evolution of mobility,” said Covestro CEO Patrick Thomas.
For the remainder of the year, said Thomas, the Leverkusen-based company has raised its forecast.
Covestro expects core volume growth in the “low-to-mid-single-digit percentage range.”
In the first quarter, core volumes in the polyurethanes segment rose by 6.8 percent year-on-year, with MDI and TDI particularly contributing to the increase. Segment earnings more than double compared to the same period in 2016.
The key driver, said Covestro, was greater demand from the global construction sector as well as from furniture and mattress industry in the NAFTA and APAC regions.
In light of the market demand development in its polyurethane segment, Covestro said that it had decided to continue production of the rigid foam precursor MDI in Tarragona, Spain, and it is converting a plant in Brunsbüttel, Germany, to double MDI production capacity there by 2018.
The polycarbonates segment also recorded strong growth of 14.7 percent in core volumes year-on-year. The volumes climbed mainly because of greater demand from the automotive and electrical/electronics industries.