Covestro, a German chemicals company, announced that it expects its earnings for 2023 to be at the lower end of its previously indicated guidance range. The company cited a challenging environment that has had a negative impact on its third-quarter results.
Revised Earnings Projection
Covestro now anticipates its earnings before interest, taxes, depreciation, and amortization (EBITDA) for the full year to be approximately €1.1 billion ($1.16 billion). This projection is at the lower end of the previously guided range of between €1.1 billion and €1.6 billion.
Furthermore, the company has revised its free operating cash flow forecast, with expectations ranging from zero to €200 million. This is a decrease from the previous forecast of up to €500 million.
Early Termination of Buyback Program
In response to the overall situation, Covestro has made the decision to terminate a €500 million share buyback program ahead of schedule. Since its launch in February 2022, the company has repurchased 4.7 million shares, which represents 2.4% of its share capital. The average price per share during this buyback was €42.50.
For the third quarter, Covestro reported an EBITDA of €277 million, reflecting an 8.3% decline compared to the same period last year. The company’s revenue also decreased by 23% to €3.57 billion.
Covestro Chief Executive Markus Steilemann commented on the lackluster economic activity, stating, “Again, there was no significant revival of the economic activity in the third quarter, with global demand remaining at a very weak level.”