Profit Forecast Lowered
Covestro, the Leverkusen-based plastics company, has significantly lowered its profit forecast for the year 2025. The company now expects an EBITDA (earnings before interest, taxes, and depreciation) between 700 million and 1.1 billion euros, which is below the previous expectations of 1.0 to 1.4 billion euros. This correction is attributed to a persistently weak global economic situation, which shows no signs of a short-term recovery.
Background and Justification
The reduction in the profit forecast is related to the takeover by the oil giant Adnoc. Covestro justifies the adjustment with the ongoing weak economic situation affecting the entire industry. Analysts had already anticipated lower expectations, with an average estimate of about 931 million euros.
Q2 Results
In the second quarter of 2025, Covestro achieved a preliminary EBITDA of 270 million euros. This falls within the projected range of 200 to 300 million euros, but is below the previous year’s value of 320 million euros. Analysts had expected an average EBITDA of 220 million euros, meaning that Covestro slightly surpassed expectations.
Impact on Cash Flow
In addition to the lowered profit forecast, a potential decline in operating cash flow (Free Operating Cash Flow) is also being discussed. Covestro expects this to be lower in 2025 and could even fall into the negative territory, with a range of minus 400 to plus 100 million euros. Previously, the range was between 0 and 300 million euros, with analysts expecting an average of 106 million euros.
Impact on Investors
These developments are highly relevant for investors as they concern important corporate news. The reduction of the profit forecast and the potential decline in cash flow could impact stock prices and overall investment sentiment. Covestro has also dissolved 43 million euros in bonus provisions, as bonuses are expected to be lower due to the reduced forecast.
Overall, these developments reflect the challenges faced by Covestro and the entire chemical and plastics industry, underscoring the importance of continuous adaptation to changing market conditions.