March 14, 2017 / 7:31 AM / 3 years ago

UPDATE 1-Wacker Chemie forecasts stagnating profits due to rising costs

* Wacker Chemie cites headwinds from raw material prices

* Says adj EBITDA, net income will both stagnate

* CEO says there is still “upward potential” for core profit

* Q1 was strong thanks to better prices

* Shares indicated 3.7 pct lower at bottom of MDAX (Adds share price indication, Q1 expectations)

FRANKFURT, March 14 (Reuters) - German specialty chemicals maker Wacker Chemie expects earnings to stagnate this year as the spiralling cost of raw materials eats into its profit, the company said on Tuesday.

“We are... facing headwinds from raw-material prices. At present, they are rising significantly and this could impact earnings,” Chief Executive Rudolf Staudigl said in a statement.

Shares in Wacker Chemie, which makes more than 3,000 chemicals products from methanol, ethylene, silicon and rock salt, were indicated down 3.7 percent to be at the bottom of Germany’s mid-cap index.

Wacker said that earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for special income from damages and from terminated contracts with solar customers, and net earnings would likely stagnate this year.

Staudigl said there was still “upward potential” for core profit if market conditions remained unchanged. So far this year, Wacker’s core profit has been supported by higher prices, particularly for semiconductor wafers, it said. (Reporting by Maria Sheahan; Editing by Georgina Prodhan and Louise Heavens)

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