MUNICH (dpa-AFX) - Despite customers' reluctance to buy in the final quarter, Wacker Chemie narrowly achieved its 2022 operating profit target. In addition to higher sales prices, the MDax-listed chemical group benefited from a cost-cutting program. This was offset by a year-on-year increase in the burden of costs for energy, raw materials and logistics of around EUR 1.3 billion. After a brief slide, Wacker Chemie shares recovered and made up for the day's loss.

In the afternoon, they were just up at 132.55 euros. They thus stabilized further, after investors had cashed out in recent days due to renewed economic concerns and following the recovery rally up to mid-January.

In the fourth quarter, as in the chemical industry as a whole, customer destocking had a greater impact on sales and earnings, explained Wacker Chemie CEO Christian Hartel. This was particularly noticeable in the silicones business. These are versatile plastics that are in demand in the electronics industry, the construction sector, textile manufacturers, medical technology companies and carmakers, for example.

However, customer reticence is likely to come as only a limited surprise, following the recent disappointing performance of plastics group Covestro and fragrances and flavors manufacturer Symrise. In this context, analysts had already expressed hope for an improvement in the course of the year.

In addition, according to Group CEO Hartel, domestic demand in China has remained below its potential due to corona-related restrictions: "This has led to increasing import pressure and falling prices outside China." China did not reverse course on its strict corona policy until late in the fourth quarter. Since then, investors have been hoping that the country would once again become a drawcard for the global economy.

Against this backdrop, earnings before interest, taxes, depreciation and amortization (Ebitda) in the final quarter fell significantly year-on-year to 360 million euros, also missing the average analyst estimate of 420 million euros, as the company announced in Munich on Monday on the basis of preliminary figures.

For the full year, this results in an operating profit of around 2.1 billion euros. Although this is slightly less than the just under 2.15 billion euros expected by analysts on average, it represents a year-on-year increase of more than a third. The company also achieved its own target of an operating profit of 2.1 to 2.3 billion euros.

Three of the four business areas increased their operating profit. In the polysilicon business, the Group benefited from higher prices for solar silicon and for silicon used in the production of computer chips. The polymers and silicones businesses also benefited from higher selling prices, with the latter also benefiting from a write-up on an investment in China.

Meanwhile, Biosolutions, by far the smallest business unit focusing on biotech products, suffered from the breakdown of a production plant at the Burghausen site during the first months of last year and from a customer's failure to make payments, it was further reported. In addition, there were start-up costs at the San Diego and Halle sites. By investing in its sites, Wacker aims to benefit from the trend toward gene therapies in the pharmaceutical industry and mRNA vaccines.

All in all, the Group also made significant gains on the bottom line. Net income for 2022 rose by more than half to just under EUR 1.3 billion. Sales increased by almost a third to EUR 8.2 billion. Wacker plans to present its annual report on March 14./mis/lew/nas