PCC SE: PCC Group posts significant increase in sales and earnings in the first half of 2018

Duisburg (Germany) (pta044/30.08.2018/16:35) - The second quarter of 2018 saw further positive business development at the majority of the affiliates of PCC SE. As a result, the internationally active chemicals group headquartered in Duisburg (Germany) significantly increased sales and earnings in the first half of the year. "Despite all the political uncertainties and international trade conflicts, economic activity proved to be extremely robust," explained Ulrike Warnecke, Managing Director of PCC SE. "Although some commodity prices showed a downward trend, overall prices remained at a high level. In addition there was an increase in the sales volumes generated by some business units of the PCC Group."

Accordingly, at EUR 195.5 million, quarterly sales matched the high level of the preceding quarter, with cumulative consolidated sales amounting to EUR 387.5 million in the first half of 2018, an increase of 14.6 % versus the prior-year period. "This is all the more remarkable, given that the Polish złoty weakened against the euro during the second quarter," Warnecke added. The primary production sites of the PCC Group are located in Poland.

The second quarter was also successful in terms of earnings growth. Consolidated EBITDA (earnings before interest and other financial items, taxes, depreciation and amortization) came in at EUR 24.2 million. In the first half of the year, Group EBITDA increased to EUR 51.9 million, corresponding to a year-on-year increase of 50.2%. Earnings before taxes (EBT) amounted to EUR 7.7 million in the second quarter and EUR 19.6 million as of the end of June - more than five times the prior-year figure of EUR 3.7 million. Although these half-year results include a positive one-off effect of EUR 9.3 million, even after adjusting for this, EBITDA and EBT significantly exceeded the already good results of the prior-year period.

Expansion in the Asian chemicals market

PCC Rokita SA, the largest PCC Group company and one of Poland's most important chemical producers, continued its expansion strategy in the first half of the year, with its current focus very much on Asia. Effective April 30, 2018, PCC Rokita SA acquired a further 25% of the shares in the Thai polyols and polyurethanes manufacturer IRPC Polyol Company Ltd., thus increasing its total participation to 50%. Aiming to establish a strong position in the growing Asian chemicals market, PCC Rokita SA has held a stake in the company since 2016.

Start of silicon metal production in Iceland

The project company PCC BakkiSilicon hf has now commissioned its new silicon metal production plant in Iceland. The first furnace was ignited on April 30, with operations since remaining extensively stable. The second furnace is due to be ignited by September at the latest. With an investment volume of around EUR 265 million, the construction of the plant represents the PCC Group's largest single investment to date. With the quartzite raw material being sourced from the Group's own quarry in Zagórze, Poland, one of the aims of this project has been to significantly extend the value chain in this business area.

Segment Performance

The Chemicals division of the PCC Group with its five segments Polyols, Surfactants, Chlorine, Specialty Chemicals and Consumer Products remains the Group's main sales and earnings generator. This division realized sales of EUR 169.1 million in the second quarter of 2018 (previous year: EUR 148.4 million). This resulted in divisional sales of EUR 333.9 million for the first half of the year, 13.8 % more than in the prior-year period. "Overall, half-year sales in 2018 were thus also higher than expected," commented Warnecke. "And on the earnings side, too, both the corresponding figures for the previous year and our overall expectations were exceeded." Once again, all the division's segments - with the exception of Consumer Products - made a positive contribution to this achievement.

The Polyols and Surfactants segments in particular benefited from their increasing focus on higher-value specialty products. With average chemical commodity price levels remaining relatively high, the Commodity Trading unit of the Specialty Chemicals segment was able to continue its successful trajectory. The Chlorine segment performed exceptionally well: Half-year sales improved 55.6% to EUR 71.4 million, with the growth in earnings also exceeding expectations. With its production plant for ultra-pure monochloroacetic acid (MCAA) having gone into service in 2016, the MCAA business unit, also managed in this segment posted positive development: Sales and EBITDA both showed an increase versus the preceding quarter. See our press release: "PCC expanding with state-of-the-art production plant for specialty chemical MCAA" for further Information: https://www.pcc.eu/pcc-expanding-with-state-of-the-art-production-plant-for-specialty-chemical-mcaa/?lang=en

The Energy, Logistics and Holding/Projects divisions also made positive contributions to earnings. Dominated by the Polish container transshipment company PCC Intermodal S.A., the Logistics division increased its half-year sales by 20.8% to EUR 41.5 million.

Our full quarterly report is available on the internet:
https://www.pcc.eu/wp-content/uploads/2018/08/PCC-Group-Quarterly-Report-2-2018.pdf

About PCC SE - https://www.pcc.eu

Headquartered in Duisburg, Germany, PCC SE is an international chemicals group that is also active in the logistics and energy sectors. With around 3,400 employees spread across 18 countries, the Group established in 1993 posted consolidated sales of EUR 683.2 million in 2017. The majority of these revenues, around 86%, was generated by the five segments of PCC's Chemicals division: Polyols, Surfactants, Chlorine, Specialty Chemicals and Consumer Products, operating primarily at sites in Central and Eastern Europe, and primarily in Poland. Group capital expenditures in 2017 amounted to EUR 101.4 million.
The largest Group company is PCC Rokita SA, which has one of Poland's biggest chemical plants near Wroclaw. Among other things, it is a major chlorine manufacturer and Eastern Europe's leading producer of polyols. PCC Exol SA is Poland's biggest manufacturer of surfactants. In the Logistics segment, PCC container transport services connect international destinations, and within the Energy segment, PCC operates a number of modern power plants.

(Ende)