Munich — Wacker Chemie A.G. expects the COVID-19 pandemic to have a negative impact of more than $106 million on its annual earnings in 2020.
"From today's perspective, 2020 is going to be another very challenging year," CEO Rudolf Staudigl said in a March 17 presentation of the German group's annual report.
The uncertainties arising from the coronavirus, he went on to add, "currently top all other risks."
For the full year, Wacker revised downward its earlier forecast of a "mid-single-digit percentage" decline in EBITDA (earnings) in 2020.
"Due to the drastic developments since the end of February, Wacker rates the risk of a coronavirus pandemic as likely… EBITDA, in consequence, could decline by a two-digit percentage versus last year," the German chemicals group said.
Wacker's sales for first two months of the year were lower compared to last year, partly due to restrictions in China on shipping products to customers.
The restrictions, it said, are dampening every division's sales in China.
Wacker also confirmed a loss of $705 million reported in its preliminary figures for 2019.
Group sales came in at $5.52 billion in 2019 slightly down from $5.87 billion registered the year before. For 2020, the German chemicals company expects to lift sales by "a low-single-digit percentage."
Earnings fell 15.8 percent to $877 million in 2019, primarily due to low average prices for solar-grade polysilicon, lower standard-silicone prices and the rise in Germany's electricity prices.