March 5, 2020

Evonik forecasts stable 2020 sales

The German chemicals group projects increased sales for its specialty chemicals but anticipates its commodities business affected by the softer global economy, reported Reuters.

Evonik projected adjusted earnings between 2 billion to 2.3 billion EUR (~US$2.2 billion to US$ 2.56 billion; 1 EUR = US$1.11) in 2020 before taxes, interest, depreciation and amortization). The company reported a core profit of 2.15 billion EUR (~US$2.39 billion) for last year.

In a poll compiled by the company, analysts estimated 13.4 billion EUR (~US$14.9 billion) in sales for 2020. This is higher than the 13.1 billion EUR (~US$14.5 billion) Evonik reported for 2019.

Evonik, which develops specialty chemicals for use in the feed industry said it estimates higher earnings in its nutrition and care segment as it assumes methionine prices to be stable this year. However, the group does expect lower growth in its automotive division.

Evonik has been concerned over falling methionine prices over the last few years. The group is the biggest producer of the amino acid used in chicken feed.

The group said COVID-19 could impact global growth, projecting 30 million EUR (~US$33.4 million) first quarter results due to the virus. 8% of Evonik's 2019 sales came from China.

Ute Wolf, Evonik chief financial officer said the group's cash generation is effective because of measures imposed over the past few years. He also said the group will aim for free cash flow improvements this year.

Evonik said its fourth quarter earnings hit 505 million EUR (~US$562 million), a 26% increase (before taxes, interest, depreciation and amortization, adjusted for one-offs). This is higher than the 499 million EUR (~US$555 million) forecasted by analysts in a poll compiled by the company.

-      Reutes.