MUNICH (dpa-AFX) - Wacker Chemie is counting on a recovery, particularly in the second half of the year, after the first quarter was weak as expected. The reduction in customer inventories should have bottomed out, said Group CEO Christian Hartel on Friday in the course of presenting the quarterly report, according to a statement. In March, the sales trend was more positive than at the beginning of the year, but there were no clear signs of a significantly better second quarter, including in the important Chinese market. Customers continued to place orders at very short notice.

Weak demand and price pressure caused Group sales in the three months to the end of March to fall 16 percent year-on-year to 1.74 billion euros. In addition, high energy prices continued to weigh on the Bavarian company's profits. Earnings before interest, taxes, depreciation and amortization (Ebitda) slumped by more than half to 281 million euros, although this was slightly more than analysts had expected on average. The bottom line was a profit of 147 million euros, compared with just under 403 million a year earlier.

Wacker-Chemie shares, which are listed in the MDax, got off to a barely changed start on the Tradegate trading platform on Friday morning compared to the Xetra close near 138 euros. The shares had recovered significantly between mid-October and the end of February, but then came under some pressure again. However, the gains since the October low still add up to around 40 percent.

The chemical sector has been suffering massively from destocking by customers since the fall of 2022. On top of this, people's reduced propensity to buy in the gloomy economic environment is having a negative impact on demand and prices.

This is making itself felt in the silicones business - these versatile plastics are used primarily in the electronics industry, by textile manufacturers, medical technology companies and in the construction sector. The construction industry, an important sales market for Wacker's polymers, is also feeling the impact of reduced construction activity due to high interest rates. Polymers are a wide variety of chemical compounds; they are the basis for adhesives, for example, but are also added to flooring, paints and concrete to change properties.

In Wacker's Silicones division, operating profit in the first quarter fell by two-thirds compared to the same period last year, and in the Polymers division by almost a quarter. Nevertheless, at least the Polymers business showed a clear improvement compared to the previous quarter.

Meanwhile, the polysilicon business for photovoltaic systems was under pressure at the start of the year, with operating profit down by around half relative to the same period last year and the previous quarter. According to Wacker, customers were holding back due to volatile prices; this was compounded by a maintenance-related plant shutdown. Better business with the semiconductor industry, which manufactures electronic chips from the material, could not compensate for this.

For 2023, Hartel continues to calculate a decline in sales of up to almost 15 percent to between 7 and 7.5 billion euros. At worst, operating profit (Ebitda) is likely to slump by almost half to between EUR 1.1 billion and EUR 1.4 billion.

With a market capitalization of around 7.2 billion euros, Wacker Chemie is one of the larger stocks in the MDax index and thus weighs slightly more than plastics group Covestro, which is listed in Germany's leading Dax index. However, Wacker Chemie's free float is significantly lower, as the majority of its shares are held by Dr. Alexander Wacker Familiengesellschaft mbH./mis/tav/jha/