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Covertro looks forward to potential deal with ADNOC amid revised earnings forecast
(MENAFN) German chemicals manufacturer Covestro has indicated that it will soon provide an update on its ongoing negotiations with the Abu Dhabi National Oil Company (ADNOC). This comes as Covestro revised its earnings forecast downward, adjusting expectations due to challenging economic conditions. Christian Baer, Covestro's CFO, shared in an interview that discussions with ADNOC are progressing constructively and that a significant announcement regarding the potential deal is anticipated in the near future.
In June, Covestro intensified talks with ADNOC following an enhanced takeover offer from the UAE energy firm, valued at approximately €11.7 billion (USD12.7 billion). This offer came more than a year after ADNOC's initial approach. Despite the promising development in negotiations, Covestro has revised its earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast for 2024. The company now expects EBITDA to range between €1 billion and €1.4 billion (USD1.1 billion to USD1.5 billion), reducing the upper end of its previous estimate from €1.6 billion. This adjustment reflects the impact of a tough economic environment on its financial outlook.
Covestro's financial performance for the second quarter saw a 16.9 percent decline in EBITDA, totaling €320 million, which surpassed analysts' average estimate of €311 million. Additionally, second-quarter sales decreased by 0.8 percent year-on-year to €3.69 billion, aligning with market expectations. The company noted that while lower raw material prices provided some relief, they were not sufficient to fully counteract the decrease in average sales prices driven by weaker demand for its products, including foam chemicals used in various applications.
In June, Covestro intensified talks with ADNOC following an enhanced takeover offer from the UAE energy firm, valued at approximately €11.7 billion (USD12.7 billion). This offer came more than a year after ADNOC's initial approach. Despite the promising development in negotiations, Covestro has revised its earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast for 2024. The company now expects EBITDA to range between €1 billion and €1.4 billion (USD1.1 billion to USD1.5 billion), reducing the upper end of its previous estimate from €1.6 billion. This adjustment reflects the impact of a tough economic environment on its financial outlook.
Covestro's financial performance for the second quarter saw a 16.9 percent decline in EBITDA, totaling €320 million, which surpassed analysts' average estimate of €311 million. Additionally, second-quarter sales decreased by 0.8 percent year-on-year to €3.69 billion, aligning with market expectations. The company noted that while lower raw material prices provided some relief, they were not sufficient to fully counteract the decrease in average sales prices driven by weaker demand for its products, including foam chemicals used in various applications.
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