BERLIN, April 29 (Xinhua) -- Covestro's earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2019 declined 58.4 percent to 442 million euros (493.2 million U.S. dollars), the German producer of high-tech polymer materials announced on Monday.
Significant price declines due to "higher competitive pressure" noticeably impacted profits for the former Bayer subsidiary, Covestro announced.
Sales fell by around 16 percent year-on-year to 3.18 billion euros in the first quarter of 2019. Net income declined 72.2 percent to 179 million euros at the start of 2019.
"The first quarter was in line with our guidance and confirms our subdued expectations for the full year," stated Covestro chief executive officer (CEO) Markus Steilemann.
In February, the German producer of high-tech polymer materials already announced a strong decline in profits for 2019 and anticipated EBITDA to fall to 1.5 to 2 billion euros for the entire fiscal year.
Covestro was going to focus on setting "the right course for our future growth with investments and efforts to improve efficiency," Steilemann added.
The German producer of high-tech polymer materials announced its plans to invest over 900 million euros this year to refurbish and expand its production plants and "extend into growth areas".
Efficiency measures are expected to deliver cost savings of 350 million euros per year over the medium term, according to Covestro.
"In anticipation of a continued challenging environment influencing results throughout the year, we are especially focusing on efficient production and processes and targeted investments," said Thomas Toepfer, chief financial officer (CFO) at Covestro.
Covestro's declining profits reflected the German chemical industry association's (VCI) relatively pessimistic outlook for the German chemical and pharmaceutical industry for 2019.
The German chemical industry association recently cut its growth industry forecast by 5 percent and was expecting a decline in revenues of 2.5 percent for 2019.
