October 26 (Solar) – Tough market conditions for solar silicon dragged down third-quarter results at German chemicals company Wacker Chemie AG (ETR:WCH).
The polysilicon division's sales slumped 49% year-over-year and 28% quarter-over-quarter to EUR 173.5 million (USD 197.2m) on a substantial decline in volumes and lower average prices for polysilicon. The quarter saw a significant fall in prices for solar silicon as a result of China's move in early June to reduce solar feed-in tariffs (FiTs) and cap photovoltaic (PV) installations for the year, which hit demand for solar modules, the company explained on Thursday.
The unit's earnings before interest, tax, depreciation and amortisation (EBITDA) were only EUR 4.3 million, down from EUR 85 million a year ago and EUR 39.1 million a quarter ago. Earnings were additionally impacted by ramp-up costs at the polysilicon plant in Charleston, Tennessee.
Wacker's total sales were down 5% year-over-year to EUR 1.24 billion as the polysilicon weakness was partially offset by strong showing by the company's chemical divisions. EBITDA fell 19% to EUR 241.7 million on the lower sales and a rise in raw-material costs.
The company kept its full-year guidance for a low-single-digit percentage rise in sales and a mid-single-digit percentage increase in EBITDA. The outlook for the polysilicon division, however, was reduced, to a fall of around 25% in both full-year sales and EBITDA, compared to a low-double-digit percentage decrease in sales and around 10% decline in EBITDA.
Chief executive Rudolf Staudigl remains optimistic on photovoltaics. "Overall, WACKER’s prospects remain positive for this year and beyond. Our chemical business is developing strongly and photovoltaics, despite the market’s temporary weakness, is as promising as ever – not least because of the global climate-policy challenges," he said.
(EUR 1 = USD 1.137)