ESSEN, Germany - Evonik has recorded strong results for the third quarter and first nine months of 2010. The company reported that net income almost quadrupled in the first nine months of 2010, with a new historical earnings record for the Chemicals business area.
“The third quarter remained strong; the first nine months were excellent. We are very pleased with our business,” commented Klaus Engel, Chairman of the Executive Board of Evonik Industries AG.
In the Chemicals business area, higher global demand, a substantial improvement in capacity utilization and effective action to raise efficiency lifted earnings considerably. “At the end of the first nine months, earnings in our Chemicals business area are on course for a historical record," commented Engel. The Energy business area also posted a considerable improvement.
Evonik expects the business trend to remain positive in the fourth quarter and also gave more detailed guidance for the full year. “We anticipate excellent results with sales growth of more than 20 percent,” said Engel. At the same time, Evonik has initiated strategically important investment projects to ensure that the growth trajectory continues in the long term. These include the planned construction of a production facility for methionine for feed additives in Singapore and increasing capacity for precipitated silica for the tire, feed, food, coatings and colorants sectors in Asia and Europe. Evonik already ranks among the global market leaders in both businesses and now aims to strengthen them selectively in growth markets.
The positive business trend in the first nine months of 2010 enabled Evonik to grow both sales and all earnings parameters significantly compared with the first nine months of 2009. The group’s sales climbed 24 percent to EUR 11,887 million. EBITDA (earnings before interest, taxes, depreciation and amortization) surged 55 percent to EUR 2,276 million in the first nine months of 2010, and the EBITDA margin was 19.1 percent, well above the year-back level of 15.3 percent. EBIT (earnings before interest and taxes) increased 93 percent to EUR 1,689 million, driven by considerably higher demand and improved margins. All three business areas, especially Chemicals, contributed to this rise.
The good business trend seen in the first six months continued unabated in the third quarter of 2010. Group sales increased 24 percent to EUR 4,088 million, due to higher demand worldwide. EBITDA advanced 18 percent to EUR 744 million. EBIT improved 26 percent to EUR 541 million as a result of higher earnings contributions from all three business areas. Net income rose 55 percent to EUR 260 million.
All three business areas posted an improvement in the first nine months of 2010. The Chemicals business area developed extremely well in the first nine months. Sales grew 31 percent to EUR 9,593 million thanks to increased volume sales and higher selling prices, principally because this business area was able to pass on higher raw material costs to customers.
The Energy business area also reported a significant improvement year-on-year. Sales increased 7 percent in the first nine months to EUR 1,977 million, driven by higher volumes and rising coal prices. EBITDA rose by EUR 124 million to EUR 389 million, and EBIT climbed EUR 128 million to EUR 326 million.
In the Real Estate business area, sales were essentially unchanged year-on-year at EUR 280 million in the first nine months. EBITDA increased by EUR 5 million year-on-year to EUR 138 million. EBIT was EUR 103 million, EUR 5 million above the prior-year figure, mainly because of the favorable development of property management.
Looking forward, the Evonik Group expects the positive business trend to continue in the fourth quarter, although seasonal factors mean that it will not match the very good figures reported for the previous quarters.
Overall, Evonik assumes that it will report an excellent performance in fiscal 2010, expecting grow sales by more than 20 percent over the full year. EBITDA and EBIT will be considerably higher than in the previous year. The group anticipates that the Chemicals business area will post an especially successful development and report a historical EBIT record.