FRANKFURT (Reuters) - Covestro is on track for better-than-expected earnings in the third quarter as stay-at-home workers’ appetite to upgrade their mobile devices and furniture drives demand for the company’s materials, its finance chief told Reuters.
The German maker of chemicals that go into casings of electronic devices and upholstery foams, said earnings before interest, taxes, depreciation and amortisation (EBITDA) would likely be about 350 million euros ($415 million) for the July-to-September period, up from 125 million in the second quarter.
That surpasses average analyst expectations of 268 million euros for third-quarter EBITDA, according to an Aug. 14 poll posted on the group’s website.
The companies’ shares extended gains to trade 2% higher at 1117 GMT.
“We are currently seeing a very solid upward trend and for now we don’t expect that to reverse,” finance chief Thomas Toepfer told Reuters in an interview.
The rebound was similar to the sequence in which the coronavirus pandemic initially knocked economies in world regions, he said.
Demand volumes in China were already well above prior-year levels, at year-earlier levels in Europe, and still somewhat “limping behind” in the United States.
“Demand for laptops, printers and other home equipment has indeed gained momentum. Also, furniture has become more relevant because people suddenly have time to sort things out,” he said.
Heat insulation slabs for construction were also driving the upswing but the car industry, another important customer group, needed more time to fully rebound, he added.
Citing uncertainty, Toepfer would not be drawn on any review of the full-year guidance, for now a wide range of 700 million to 1.2 billion euros and down from last year’s 1.6 billion. The 2020 market consensus is for 860 million euros.
Reporting by Patricia Weiss and Ludwig Burger; editing by Thomas Seythal and Maria Sheahan
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