Covestro, the plastics maker that parent Bayer plans to divest, reported a bigger-than-expected earnings gain for the fourth quarter, as rivals' tight supplies helped it reverse a more than year-long trend of price declines.

The maker of foam chemicals and transparent plastics said quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for special items, rose 52 percent to 390 million euros ($414 million), well above the 341 million euros expected on average in a Reuters poll of analysts.

The maker of chemicals for blu-ray discs and insulation foams said it got a 124 million euro boost in the quarter from marking up prices, mainly in foam chemicals, even as raw material costs eased. It cited "tighter industry conditions".

Its shares were up 2.5 percent in early Frankfurt trade.

Rival BASF recently suffered a setback at its Ludwigshafen plant which makes materials for soft foams used in mattresses and car seats, saying a technical defect would lead to reduced output into 2018.

And a deadly explosion in September last year at a Chinese plant run by Wanhua Chemical, which competes with Covestro in rigid foams for insulation, has disrupted supplies there.

Covestro said it was targeting a low to medium single-digit percentage increase in sales volumes of its main products for 2017.

 

Source: reuters.com

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