Even though Wacker’s polysilicon business hasn’t been contributing too much to group sales, in Q2/2019 the company managed to report €42 million increase in its EBITDA. For the entire year, it sees global PV installations to increase and sequentially higher prices are expected for the second half of the year. (Source: Wacker Chemie AG)
- Weaker polysilicon prices in Q2/2019 for polysilicon contributed to pulling down group sales for Wacker Chemie by 5% YoY
- Group EBITDA too declined 19%, but polysilicon business itself reported €42 million improvement in its EBITDA for the quarter
- The increase in EBITDA was due to operational improvements in production processes while it retained €19 million in advance payments received from a solar customer
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Germany’s Wacker Chemie AG’s group sales between April 2019 and June 2019 declined 5% annually, mainly because of ‘markedly weaker polysilicon prices’, decreased standard-silicon prices and higher energy costs. While the company’s overall EBITDA for Q2/2019 was 19% less than a year back, its polysilicon division surprised by reporting €42 million ($46.5 million) increase in EBITDA to €5.7 million ($6.32 million), compared to -€35.8 million (-$36.69 million) in Q1/2019.
The polysilicon EBITDA improvement was attributed by the company to operational improvements in its production processes. At the same time, the division retained €19 million ($21 million) in advance payments from an unnamed solar customer.
Wacker shared that its EBITDA margin during the quarter was 3.4%, down from 16.2% reported a year back, but up from a negative 17% in Q1/2019 (see Wacker Suffers EBITDA Loss In Q1/2019).
Wacker’s polysilicon business division contributed 30% less annual sales of €169.9 million ($188.35 million) to group sales of €1,268.5 million ($1,406 million) in the quarter. There was also a sequential decline of 20% in segment sales due to lower volumes.
Going forward, Wacker guides for group sales to increase by a mid-single digit percentage in 2019 while continuing to anticipate EBITDA to decline by 10% to 20% on annual basis (see Wacker Expects Lower EBITDA In 2019). “With the global economy losing momentum and China’s solar market yet to revive, Wacker now expects full-year EBITDA to be closer to the bottom end of this range. Wacker expects the EBITDA margin to be substantially lower than last year,” stated the management. It also sees its net financial debt to rise higher than last year.
Wacker expects the world to add between 110 GW to 130 GW of new solar in 2019 which would translate into higher demand for solar-grade polysilicon and higher prices in H2.