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    1COV   DE0006062144

COVESTRO AG

(1COV)
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Real-time Estimate Tradegate  -  03:34 2022-09-28 am EDT
28.13 EUR   -3.58%
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Covestro raises 2021 profit forecast for third time

11/08/2021 | 05:00am EDT
FILE PHOTO: FILE PHOTO: The logo of German chemicals maker Covestro is pictured outside its headquarters in Leverkusen

(Reuters) - German chemicals maker Covestro on Monday raised its 2021 profit forecast for the third time and was confident about prospects for next year, while adding it was not clear if a boost from higher prices would continue.

The company, whose products are used to make car seats and phone cases, beat analysts' forecasts with an 89% jump in third-quarter core earnings as strong demand allowed it to hike prices to offset higher energy and raw material costs.

"Overall, we believe that we can conclude a very successful result next year", Chief Financial Officer Thomas Toepfer told Reuters, while adding he couldn't say at this stage whether the lift from higher prices would persist in 2022.

Covestro said it now expected 2021 earnings before interest, tax, deprecation and amortisation (EBITDA) of 3.0-3.2 billion euros ($3.5-3.7 billion) compared with 2.7-3.1 billion euros previously.

"We have increased our earnings forecast once again, which shows that we are on the move with good dynamics and are very confident that we can take this dynamic into the fourth quarter", Toepfer said.

Covestro also raised its 2021 return on capital employed (ROCE) guidance to 19-21% from 16-20% previously, but cut its core volume growth estimate to 10-12% from 10-15%, citing limited product availability.

Toepfer said the shortage was caused by bottlenecks in purchasing raw materials and other inputs, leading to unplanned production outages - including one at the group's Brunsbuettel site in Germany.

But he added the company produces many inputs itself.

Third-quarter EBITDA surged to 862 million euros from 456 million a year earlier, beating analysts' average forecast of 854 million in a company-provided poll.

At 0930 GMT, Covestro shares were down 0.2% at 54.40 euros, having earlier risen as much as 1.8%.

($1 = 0.8655 euros)

(Reporting by Patricia Weiss and Federico Maccioni Additional reporting by Bartosz Dabrowski; Editing by Jane Merriman and Mark Potter)

By Patricia Weiss and Federico Maccioni


© Reuters 2021
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Analyst Recommendations on COVESTRO AG
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Financials
Sales 2022 17 821 M 17 106 M 17 106 M
Net income 2022 621 M 596 M 596 M
Net Debt 2022 2 665 M 2 558 M 2 558 M
P/E ratio 2022 8,52x
Yield 2022 6,24%
Capitalization 5 574 M 5 350 M 5 350 M
EV / Sales 2022 0,46x
EV / Sales 2023 0,50x
Nbr of Employees 17 909
Free-Float 95,2%
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Mean consensus OUTPERFORM
Number of Analysts 19
Last Close Price 29,17 €
Average target price 43,16 €
Spread / Average Target 48,0%
EPS Revisions
Managers and Directors
Markus Steilemann Chief Executive Officer
Thomas Toepfer Chief Financial Officer & Labor Director
Richard Pott Chairman-Supervisory Board
Klaus Schäfer Chief Technology Officer
Petra Kronen Vice Chairman-Supervisory Board
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