Polysilicon Sales Pull Down Wacker Chemie’s Q2 2024 Group Sales & Earnings

German chemicals and polysilicon producer Wacker Chemie AG has reported its group sales for Q2 2024 to have declined by 16% annually, attributing the results to lower selling prices. A 55% Year-over-Year (YoY) decline in its polysilicon business division due to lower prices and volumes for solar applications, thanks to overcapacity in China, was a major factor, according to the management.  

The group sales of €1.5 billion comprised €232 million polysilicon sales during the reporting quarter. The latter was also a drop of 23% over €300 million in Q1 2024. Polysilicon EBITDA of €55 million was though a decline of 65% YoY, it increased 27% Quarter-over-Quarter (QoQ). It contributed to €160 million EBITDA at the group level.  

EBITDA margin for the polysilicon business was 23.8%, compared to 30.5% in Q2 2023, and 14.5% in Q1 2024.  

For the period from January to June 2024, Wacker’s polysilicon division posted total sales of €531.6 million, representing a 44% annual decline due to the much-lower solar-grade polysilicon selling prices and volumes. In comparison, the semiconductor-grade polysilicon performed well.  

EBITDA for H1 2024 was down 61% over the same period. “This decline was chiefly due to reduced volumes and selling prices. Prices for solar grade silicon fell sharply due to overcapacity in China. Due to plant maintenance and upgrades, not all of the division’s plants were fully utilized. The EBITDA margin from January through June 2024 was 18.5%, compared with 26.6% a year earlier.” 

Management is now increasing the share of polysilicon for the semiconductor industry even further in its polysilicon business.    

Guidance 

The company has reiterated its forecast for 2024 with sales guidance within €6.0 billion to €6.5 billion and EBITDA within €600 million and €800 million.    

The polysilicon division is guided to report annual sales of €1.1 billion to €1.4 billion with an EBITDA of €200 million to €300 million.   

“While considerable risks remain, result of geopolitical tension, the situation is looking brighter. Inflation rates are declining at a faster rate than expected, and consumer sentiment is gradually starting to bounce back. Energy and raw material prices have eased, although they remain high in Europe,” stated the management as reasons for the forecast. “A slight recovery is emerging in Germany, with demand on the rise again in a number of customer sectors.”  

It did add a caveat saying a sustained turnaround is not yet insight and that the environment will remain challenging in the second-half of the year.