German chemicals group Evonik Industries reported second-quarter core profit below analyst expectations on Friday, hurt by weak demand and a challenging market environment.
It posted a 12% drop in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to 509 million euros ($581.3 million) in the April-June quarter. This was below a 511 million-euro forecast by analysts in a Vara Research poll.
The group also said it expects annual adjusted EBITDA at the lower end of a 2 billion-2.3 billion-euro forecast, provided the global economy does not weaken further.
Analysts’ median forecast for 2025 core profit stands for 2.02 billion euros, according to Vara Research.
Evonik reported an 11% year-on-year decline in sales to 3.5 billion euros, mostly due to currency headwinds and the sale of its superabsorbents business, which was still part of the company through the second quarter of 2024.
Last September, Evonik finalised the sale of its superabsorbents business to the International Chemical Investors Group (ICIG). The division, which makes materials for diapers and hygiene products, generated sales of 892 million euros in 2023.
The German chemicals sector, the country’s third-largest, has been struggling for years with subdued demand, high energy costs, supply chain issues and an economic slowdown. The threat of U.S. tariffs has added to the pressure.
This has dampened industry sentiment, with German chemicals lobby VCI not expecting a recovery before 2026 despite signs that the downturn in the chemical-pharmaceuticals sector may have bottomed out.
Adding to the pessimism, major players including BASF, Covestro and Brenntag have cut their annual forecasts, citing persistent global economic weakness, subdued demand, and tariff-related pressures, with no clear signs of near-term improvement.
($1 = 0.8756 euros)
(Reporting by Anastasiia Kozlova)
