PCC SE: PCC posts Q2 earnings and sales growth despite challenging market environment

Duisburg (pta043/22.08.2024/13:10) - Duisburg-based investment holding company PCC SE increased its earnings and sales in the second quarter of 2024, in part significantly, despite a challenging market environment. The second quarter was also substantially better than Q1 2024 at all earnings levels. EBITDA (earnings before interest, taxes, depreciation and amortization) increased year on year by 122.4% to € 23.6 million and Group sales by 3.6% to € 243.9 million. Compared to the previous quarter, these figures represent an increase of 54.6% and 0.9% respectively. "The year-on-year business development is mainly due to a slight improvement in sales volumes. Compared to the previous quarter, developments have been characterized primarily by flat to slightly declining average selling prices," explains Riccardo Koppe, Member of the Executive Board and Chief Financial Officer of PCC SE.

Gross profit for the second quarter of 2024 amounted to € 88.9 million, an increase of 55.1% on the same quarter of the previous year and 17.7% on the previous quarter. Gross margin rose to 36.5% in the second quarter, from 31.2% in the first quarter. The PCC Group returned to profitability in EBIT terms (earnings before interest and taxes) in the second quarter of 2024, achieving a positive result of € 2.6 million after an operating loss of € -5.3 million in the first quarter. Both EBIT and EBITDA improved from month to month in the second quarter. At the pre-tax level (EBT), the PCC Group had in the prior-year quarter posted a loss in the low double-digit million euro range; by comparison, the loss in the second quarter of 2024 has been reduced by around two thirds to € -6.0 million.

The business performance of the PCC Group in the second quarter of 2024 was significantly impacted by persistently weak economic parameters, particularly in Germany, but also in the European Union as a whole, these being PCC's main sales markets. Added to this was the persistently aggressive export policy of non-European countries, first and foremost China and – in the case of silicon metal – Brazil, as described in previous quarterly reports. In addition, ongoing geopolitical upheavals such as the Russia-Ukraine war and the conflict in the Middle East continued to have a negative impact on both the European and the global economies.

Group segment performance

The Surfactants & Derivatives segment – where applications in the consumer goods sector grew both above the previous year and above our expectations – and the Intermodal Transport division of the Logistics segment – in which container handling volumes significantly increased – recorded particularly positive business developments. The Polyols & Derivatives segment also continued its positive business performance, with a slight recovery in sales volumes having a particular impact. The Chlorine & Derivatives segment achieved further volume growth in the second quarter, albeit with sales and earnings remaining below the exceptionally good prior-year quarter in a period that was still characterized by very high selling prices. The Silicon & Derivatives segment further reduced its losses in the second quarter. Following the restart of the silicon metal plant's second furnace in January, production has now stabilized at full capacity. The Trading & Services segment benefited from a further fall in purchase prices and returned to positive operating profit territory in the second quarter. The Holding & Projects segment focused on the commissioning of the second production line of the new oxyalkylates plant in Malaysia, a facility operated together with joint venture partner PETRONAS Chemicals Group Berhad. Expansion in the US market provided a further focus: With the newly established PCC GulfChem Corporation, Wilmington (Delaware), PCC SE is examining the possible development, construction and operation of its own chlor-alkali plant in the USA.

Redemption of maturing bond

On July 1, 2024, PCC SE repaid on maturity the 4.00% bullet bond carrying the code ISIN DE000A2NBJL3 issued in January 2019. The redemption volume amounted to € 25.0 million.

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

Profile of 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 € 994 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of some € 112 million in fiscal 2023, with capital expenditures in the same year amounting to € 142 million. For further information on PCC, go to: https://www.pcc.eu.

(Ende)