PCC SE: PCC records steady upward trend in sales and earnings in Q1

Duisburg (pta029/16.05.2024/14:28) - Following a weak January, monthly sales revenue and operating profit at Duisburg-based investment holding company PCC SE improved steadily in the first quarter of 2024. Overall, however, Group sales and earnings fell short of expectations. "The main reasons for this development were lower sales volumes in certain cases versus the previous year, and lower average selling prices resulting from continued weaker demand in many industrial sectors due to the prevailing economic situation," explained Ulrike Warnecke, Member of the Executive Board of PCC SE.

Group sales in Q1/2024 amounted to € 241.7 million, an increase of 7.2 % compared to the previous quarter. In the outstanding prior-year quarter, however, Group sales amounted to € 312.6 million.

Earnings before interest/financial result, taxes, depreciation and amortization (EBITDA) accumulated from break-even in January 2024 to a total of € 15.3 million in the course of the first quarter of 2024; however, this was still well below the figure of € 53.8 million achieved in the extraordinarily successful prior-year quarter. At the operating level (EBIT), PCC posted a quarterly loss of € 5.3 million compared to a profit of € 34.6 million in Q1/2023. However, similar to the pattern of EBITDA development, there was again a steady improvement from month to month at the EBIT level. At the pre-tax level (EBT), the loss of € 12.3 million was slightly higher than expected. In the first quarter of 2023, the PCC Group had generated a pre-tax profit of € 18.1 million, benefiting from the still very high selling price levels prevailing at that time with respect to chlorine and its derivatives.

The business performance of the PCC Group in the first quarter of 2024 continued to be essentially characterized by persistently weak economic indicators, particularly in Germany, but also throughout the EU, that is to say the main sales markets of the PCC Group. "Added to this was the aggressive export policy of non-European countries already described in the previous quarterly report," said Ulrike Warnecke. "China and – with regard to silicon metal – Brazil are worthy of particular mention in this regard." In addition, ongoing geopolitical uncertainties such as the Russia-Ukraine war and the conflict in the Middle East continued to have a negative impact on the European economy in the first quarter of 2024.

Highlights from the Group segments

The Chlorine & Derivatives segment was once again the main earnings generator of the PCC Group in this latest quarter, driven by the Chlorine business unit of PCC Rokita SA. The Polyols & Derivatives segment recorded a positive business performance, with earnings at all levels exceeding both the positive prior-year figures and expectations. Despite ongoing pressure on prices, the sales and earnings performance of the Surfactants & Derivatives segment was positive in the first quarter of 2024 and better than generally expected, with PCC Exol SA increasing its sales volumes. Although the Silicon & Derivatives segment recorded further losses, these resulted in part from the restart of the second furnace of PCC BakkiSilicon hf. in January. In addition, selling prices remained low due to ongoing competition from China and Brazil. At € 37.5 million, sales in the Logistics segment were 13.5 % higher than in the prior-year quarter, while EBITDA rose by 11.9 % to € 5.7 million. The Holding & Projects segment continued to focus on the commissioning of the production plant for oxyalkylates in Malaysia, which has now manufactured its first ethylene oxide-based products. A further focus was on the expansion of PCC's core business in the US market. A second project company newly established by PCC in the USA is to examine the feasibility of chlorine production in the US.

Redemption of maturing bond

On April 2, 2024, PCC SE redeemed the 4.00% bullet bond ISIN DE000A2NBFT4 issued in October 2018. The redemption volume amounted to € 21.1 million.

The aforementioned Group financials are unaudited. The quarterly report is available online at https://www.pcc-financialdata.eu.

About PCC SE

Headquartered in Duisburg, Germany, PCC SE is the parent and investment holding company of the globally active PCC Group with around 3,300 employees. Its Group companies have core competencies in the production of chemical feed stocks and specialty chemicals, silicon and silicon derivatives, and in container logistics. An investor committed to the longer term, PCC SE concentrates on continuously increasing the enterprise value of its portfolio companies through sustainable investments and the ongoing creation of new value. The largest chemical producers of the PCC Group are PCC Rokita SA, a major chlorine manufacturer and Eastern Europe's leading producer of polyols, and PCC Exol SA, one of Europe's most advanced surfactant manufacturers. PCC BakkiSilicon hf. operates in Iceland one of the world's most advanced and climate-friendly silicon production facilities. PCC was founded in 1993 by Waldemar Preussner, sole shareholder of PCC SE, who today holds the position of Chairman of the Supervisory Board. The PCC Group generated consolidated sales of around € 994 million and earnings before interest/financial result, taxes, depreciation and amortization (EBITDA) of some € 112 million in fiscal 2023, with capital expenditures in the same year amounting to around € 142 million. For further information on PCC, go to: https://www.pcc.eu.

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