Wacker’s Polysilicon Sales Dropped In Q1/2023

• Wacker's Q1/2023 polysilicon sales went down by 16% annually and 23% quarterly to €441 million
• EBITDA decline was reported as 56% YoY and 50% QoQ due to lower volumes for solar grade silicon and volatile polysilicon prices
• Management expects things to improve in H2/2023 as customers continue to be cautious while placing orders in the near term

German polysilicon producer Wacker Chemie AG blames significantly lower volumes for solar grade silicon due to volatile prices of polysilicon and a maintenance related plant shutdown for lower sales and EBITDA on annual basis for this segment in Q1/2023.

Polysilicon business division exited the reporting quarter with 16% annual drop in sales with €441 million, and 23% quarterly decline in Q4/2022 (see Polysilicon, A Performer For Germany's Wacker In 2022).

EBITDA too dropped 56% annually and 50% QoQ to €98 million which, along with the above reasons, dropped due to higher energy prices on lower plant utilization rates.

"Higher prices year over year did not fully compensate for this. Volumes for electronic-grade silicon continued to increase both year over year and quarter over quarter," it added.

EBITDA margin went down to 22.2% from 42.7% in Q1/2022 and 34.3% in Q4/2022.

On a group level, Wacker's annual sales for Q1/2023 declined 16% annually to €1.74 billion, and EBITDA down 56% to €281 million.

"As expected, our figures reflect our customers running down their inventories and exercising caution when ordering in Q1," said CEO Christian Hartel. "For this reason, we sold less across all business divisions than we did a year ago."

Nonetheless, the management remains confident in its forecast for 2023 for full year sales to be between €7 billion and €7.5 billion, down from €8.2 billion in 2022. The guidance is based on a combination of significantly lower selling prices, volume growth during the year and positive product- mix in chemical divisions. EBITDA guidance is for €1.1 billion and €1.4 billion.

Polysilicon is going to be contributing between €1.6 billion to €1.8 billion sales and EBITDA of €300 million to €500 million to 2023 financials. Management cites lower solar ASP and continued high energy costs in Germany for this subdued guidance.

Hartel doesn't see Q2/2023 to be 'substantially stronger' as customers continue to place orders at a very short notice, nonetheless sees the situation improving during H2/2023.

Recently leading Chinese polysilicon supplier Daqo New Energy also reported decline in Q1/2023 revenues due to drop in polysilicon ASPs and more capacity coming online (see Daqo New Energy Gets Mixed Bag In Q1/2023).