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Investing.com -- Covestro AG (ETR:1COVG) on Thursday reported third-quarter EBITDA of €242 million, significantly exceeding analyst expectations of €183 million despite continued challenging market conditions.
The German materials manufacturer has narrowed its full-year EBITDA guidance to between €700 million and €800 million, lowering the upper end of its previous €700-1,100 million range.
The company’s third-quarter results reflected ongoing market pressures, with group revenue falling 12% YoY to €3.2 billion due to lower sales prices, unfavorable exchange rates, and reduced volumes.
Despite outperforming analyst estimates, EBITDA declined from €287 million in the same period last year. Covestro reported a consolidated net loss of €47 million, compared to a €33 million profit in the prior-year quarter.
A fire at an external substation at Chempark Dormagen negatively impacted earnings in the "mid double-digit million euro range," according to the company. Despite these challenges, free operating cash flow remained stable at €111 million.
"The third quarter has once again shown how challenging the environment remains for our industry," said Dr. Markus Steilemann, CEO of Covestro. "We continue to feel high price pressure and subdued demand worldwide – which is precisely why it is crucial to continue to act decisively."
The company’s STRONG transformation program, launched in 2024, has already generated approximately €320 million in savings, with Covestro on track to achieve its target of €400 million annually by 2028. About €250 million in savings will be realized in 2025.
Covestro has also pursued strategic growth initiatives, completing the acquisition of Pontacol AG in August to expand its specialty films business, and signing an agreement with Vencorex Holding SAS to acquire production facilities in Thailand and the United States.
For the full year, Covestro now expects EBITDA between €700-800 million, free operating cash flow between €-400 million and €-200 million, and ROCE above WACC between -9 and -8 percentage points.