Wacker Chemie forecasts lower 2023 profit as selling prices drop

By Antonis Pothitos

(Reuters) -German chemicals maker Wacker Chemie on Tuesday forecast a drop in its 2023 core earnings, citing significantly lower selling prices, higher energy costs and tepid economic growth.

The manufacturer of specialty chemical products forecast its annual earnings before interest, taxation, depreciation and amortisation (EBITDA) to come between 1.1 billion and 1.4 billion euros ($1.2 billion and $1.5 billion), below the 2.08 billion euros seen in the year-ago period.

Analysts had forecast 2023 EBITDA of 1.31 billion euros in a company-compiled consensus.

European chemicals firms have painted a bleak picture of their 2023 prospects this month, citing the continued fallout from Russia's invasion of Ukraine, high inflation and slowing economic growth, and with executives stressing that an uncertain geopolitical and economic environment were likely to peg back earnings this year.

"The war in Europe is an acid test for the entire world and has thrown the global economy off balance," Chief Executive Officer Christian Hartel said in a statement, adding that high energy prices still have an impact on business.

In the first two months of the year, demand dropped across many customer sectors, the company said.

The Munich-based group expects sales of about 1.7 billion euros for the first quarter, down 18% from the same period last year, while also seeing a decline in EBITDA, coming between 250 million and 280 million euros.

Wacker sees sales of between 7 billion and 7.5 billion euros this year, down from 8.21 billion posted in 2022. The midpoint of the sales forecast came above analysts' estimate of 7.15 billion.

The company's shares were seen down 1.1% in Lang & Schwarz premarket trade.

($1 = 0.9342 euros)

(Reporting by Antonis Pothitos and Linda Pasquini in Gdansk; Editing by Milla Nissi and Sherry Jacob-Phillips)