MOSCOW (MRC) -- German chemicals maker Covestro reported a better-than-expected third-quarter profit on Tuesday, citing cost-cutting measures, improved volumes in Asia-Pacific and demand recovery after a coronavirus-induced slump, said Reuters.
In the second quarter, the company had managed an unexpectedly swift rebound from a pandemic-related slowdown and finance chief Thomas Toepfer had said the trend would continue into the last months of the year.
“In the third quarter, demand from our customer industries experienced a strong rebound,” Chief Executive Markus Steilemann said in a statement on Tuesday.
Covestro, whose main customers include the automotive industry and electronics manufacturers, said its net income for the quarter ended Sept. 30 came in at 179 million euros (USD211.56 million), compared with the 112 million euros expected on average by analysts in a company-provided poll.
The company’s free operating cash flow for the quarter also jumped by almost 50%, helped by increased inflows from operations and lower property, plant and equipment expenditures, it said.
The company confirmed the preliminary figure for third-quarter sales and earnings before interest, taxes, depreciation and amortisation (EBITDA) as well as the guidance adjustments it had announced at the beginning of the month.
As MRC informed earlier, Covestro says it has received its first delivery of certified renewable phenol from Borealis, to be used as a drop-in feedstock for the production of polycarbonate plastic. The phenol is manufactured by Borealis using renewable hydrocarbons feedstock supplied by Neste, sourced from waste and residual oils and fats.
As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.
According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market reached 58,000 tonnes in January-July 2020, up by 22% year on year (47,500 tonnes).
Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2019 sales of EUR12.4 billion, Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.