August 1, 2019 / 8:10 AM / 6 months ago

Germany's Wacker Chemie posts surprise profit at polysilicon unit

FILE PHOTO: Company sign of Wacker Chemie AG is pictured in the south-east Bavarian town of Burghausen April 1, 2014. REUTERS/Michaela Rehle/File Photo

FRANKFURT (Reuters) - German specialty chemicals maker Wacker Chemie (WCHG.DE) on Thursday said operational improvements helped its key polysilicon unit swing to a profit in the second quarter.

The company - one of the world’s biggest suppliers of solar-grade polysilicon, which is needed to make cells - said the division made earnings before interest, tax, depreciation and amortisation of 5.7 million euros (£5.2 million).

That was down 85% year-on-year, but rebounded from a 35.8 million loss in the previous quarter. According to Refinitiv estimates, the unit had been expected to post a 30 million euro EBITDA loss in the period.

“Investors are relieved that the quarter result was not a disappointment,” an equity trader said. Baader Helvea Equity analysts said the result at Wacker Chemie’s polysilicon unit result was a “very positive surprise”.

Wacker Chemie’s shares rose as much as 6.1% on Thursday before paring gains. They were up 2.7% at 0758 GMT.

The group kept its forecast for a decline in earnings before interest, tax, depreciation and amortisation (EBITDA) of 10-20%, but anticipates profits will be “closer to the bottom end of this range” due to a weakening of the global economy.

A decline of 20% would put full-year EBITDA at 744 million euros, below the 852 million Refinitiv estimate. German engineering group Siemens (SIEGn.DE) also warned of a deteriorating economy that hit earnings in its third-quarter.

Reporting by Christoph Steitz and Hakan Ersen; Editing by Michelle Martin

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