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Covestro’s profits jump, raises 2021 guidance on strong demand, prices -Breaking


© Reuters. FILEPHOTO: Covestro’s logo can be seen at its Leverkusen headquarters, Germany on July 26, 2019. REUTERS/Wolfgang Rattay

(Reuters) – German chemicals manufacturer Covestro has raised its full year earnings guidance on Monday after reporting a 89% rise in third-quarter earnings.

According to the group’s product line, which includes phone cases and car seat cushions, 2021 core earnings will be between 3.47 billion euro ($3.2 billion) and 3.2 million euros. This is an increase from previous estimates of 2.7 billion to 3 billion.

Covestro is a company whose customers include both the automobile industry and the electronic manufacturers. The pandemic was quickly overturned by Covestro and the firm has been enjoying price rises despite the higher raw material and energy costs.

Thomas Toepfer, Chief Financial Officer said that earnings have increased significantly and EBITDA guidance was at its upper end for the quarter. He also stated that the company anticipates that this positive trend will continue.

Covestro’s 2021 return of capital employed (ROCE), outlook has been raised to 19-21%, from 16-20%. Due to limited product availability, Covestro reduced its core volume growth estimate from 10-15% to 10-12%.

As demand was strong, the Leverkusen-based company beat expectations for its third quarter. Also, high sales prices helped to boost sales.

According to analysts, the average earnings before interest taxes, depreciation or amortization (EBITDA), was 89% higher than 456m euros in the previous year and 854 million euros as forecasted by an analyst in a poll.

($1 = 0.8655 euros)

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