PCC SE: PCC reports third-quarter sales up but earnings impacted by economic situation

Duisburg (pta019/15.11.2024/13:00) - The Duisburg-based German investment holding company PCC SE achieved sales growth of 8.0% year on year to €237.7 million in the third quarter of 2024. However, increased fixed costs, interest expenses, scheduled facility shutdowns and exchange rate losses led to a significant decline in earnings. "Overall, the business performance of the PCC Group in the third quarter was governed by the persistently weak economy. We were also impacted by the persistently aggressive export practices of non-European countries, above all China and – in the case of silicon metal – Brazil," explained Riccardo Koppe, Member of the Executive Board and Chief Financial Officer of PCC SE. "As a result, the PCC Group fell short of management expectations in Q3."

Gross profit for the third quarter of 2024 amounted to €74.4 million, a slight increase of 1.2% on the same quarter of the previous year. The Q3 gross margin came in at 31.1% versus 33.4% in the third quarter of 2023. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 53.9% year on year to €6.8 million in the third quarter. At the operating profit level (EBIT, earnings before interest and taxes), the PCC Group recorded a loss of €–14.3 million in the third quarter of 2024. After a positive operating result of €3.3 million in the second quarter, this means a temporary interruption to the upward trend. At pre-tax level, exchange rate losses of around €–13 million in the third quarter contributed to negative EBT amounting to €–39.1 million.

Group segment performance

The Surfactants & Derivatives segment in particular recorded positive business development, with the performance of the Consumer Products business exceeding both the same quarter of the previous year and management expectations. The Intermodal Transport business unit, the dominant entity in the Logistics segment, continued its positive sales and earnings performance in the third quarter: Quarterly sales rose by 24.0% year on year to €38.5 million, while EBITDA increased to €6.4 million.

The Polyols & Derivatives segment recorded stable business development in the third quarter. Quarterly sales fell slightly by 1.4% compared to the prior-year quarter. In the Chlorine & Derivatives segment, third-quarter results were impacted by maintenance measures. The segment nevertheless reported a positive operating result – despite lower volumes and declining prices.

The Silicon & Derivatives segment remained in the red in the third quarter of 2024, with an operating result of €–16.1 million. Following the restart of the second furnace of PCC BakkiSilicon hf., Húsavík (Iceland), in January, production stabilized at full capacity, although furnace operation had to be temporarily restricted in May. The company's results were also reduced by valuation-related foreign exchange losses of around €–15 million.

While the Trading & Services segment experienced a seasonally weaker third quarter, cumulative EBITDA and operating profit over the first nine months remained well above the levels of the previous year. In the Holding & Projects segment, one of the prime focuses in the third quarter was the further expansion of the Group's core chemicals business in the US market: PCC SE is examining the possible construction of its own chlor-alkali plant in the USA. Among other things, the order for the process design package (PDP) was placed in the third quarter, with supply and purchase agreements also having been negotiated.

Redemption of maturing bond

Effective October 1, 2024, PCC SE repaid on maturity the 4.00% bullet bond carrying the code ISIN DE000A2TSEM3 issued in July 2019. The redemption volume amounted to €30.0 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)