Covestro had “outstanding” fiscal year in 2017

Materials manufacturer Covestro has reported what it calls an “outstanding fiscal year” in 2017.

Driven by a high demand for high-performance plastics and significantly higher margins, the Germany-based company increased group sales by 18.8 per cent to 14.1 billion euros over the past fiscal year.

Net income more than doubled from 795 million euros to 2 billion euros.

“We have achieved an impressive result in 2017 and significantly exceeded our overall targets,” Covestro CEO Patrick Thomas said in a statement. “Compared with our first year as an independent company, we have once again clearly improved and demonstrated that our success is sustainable.”

In its polyurethanes segment, Covestro increased its core volumes over the previous year by 3.4 per cent. “This growth was primarily the result of significant improvements in margins in the MDI (diphenylmethane diisocyanate) and TDI (toluene diisocyanate) product groups,” the company said in the statement. “Moreover, the increased sales volume, gains from the sale of a systems house in North America and an insurance reimbursement all had a positive effect. Furthermore, the decision to continue production in Tarragona, Spain led to a reversal of provisions.”

Core volumes in the polycarbonates segment rose by five per cent. “Here, too, all three regions contributed to growth,” Covestro said.

And core volumes in Covestro’s coatings, adhesives, and specialties segment saw virtually no change (down 0.3 per cent) amidst what the company called a “challenging competitive environment”.

Looking ahead to 2018, Covestro expects “solid growth” in the main customer industries, as well as in other areas, including e-mobility, energy-efficient construction and energy-saving LED lamps.

The company now expects to deliver a cumulative free operating cash flow (FOCF) of 5 billion euros by the end of 2019, ahead of the original commitment made in 2017 to generate a cumulative FOCF by year end 2021.