Covestro AG (CVVTF.PK,COVTY.PK), a German maker of high-tech polymer materials, on Friday reported that its first-quarter net loss was 26 million euros, compared to previous year’s profit of 416 million euros.
EBITDA amounted to 286 million euros, 64.5 percent lower that previous year’s 806 million euros, due to a drop in volumes sold and lower margins.
However, the result significantly exceeded the company’s own expectations of 100 million euros to 150 million euros as well as recent analysts’ estimates of 158 million euros for the first quarter, the company noted.
Group sales were down 20.1 percent in the first quarter to 3.7 billion euros from last year’s 4.7 billion euros, mainly due to a drop in volumes sold and a lower selling price level.
Looking ahead for the second quarter, Covestro expects EBITDA of between 330 million euros and 430 million euros.
Further, the company adjusted and quantified fiscal 2023 forecast citing first-quarter results, higher margins and an improved cost level.
Covestro now projects that the Group’s EBITDA will be between 1.1 billion euros and 1.6 billion euros, compared to previous view of significantly down on the previous year.
The Group anticipates free operating cash flow of between 0 million euros and 500 million euros, while previously it was expected to be significantly down on the previous year.
In addition, the company has decided to resume current share buyback program, in the short term. The buyback of the next sub-tranche with a volume of up to 75 million euros will begin in May 2023.
Covestro had started the share buyback program in February 2022 and temporarily paused it in the middle of last year due to the weakening economic outlook.
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