THE WHAT? German chemicals company Evonik reported first-quarter core profit above market expectations, driven by increased customer stockpiling linked to supply chain disruption caused by the Iran conflict.
THE DETAILS Evonik said first-quarter adjusted EBITDA fell 15% year-on-year to €475 million, but still exceeded analyst forecasts of €448 million and surpassed the company’s own guidance by €25 million. The company attributed the stronger-than-expected performance to customers building inventories amid uncertainty surrounding supply chains and rising raw material prices linked to the Middle East conflict. Demand increased for products including high-performance polymers, lubricant additives and cross-linkers, while higher freight costs also eased competitive pressure from Asian suppliers in some segments. Evonik said it expects second-quarter core profit to rise at least 8% year-on-year to €550 million, although it warned that inflation and softer demand could weigh on volumes later in the year.
THE WHY? The results highlight how geopolitical disruption and rising energy costs are reshaping global chemicals supply chains, prompting customers to secure inventory and pushing manufacturers to increase prices.
Source: Reuters
