Wacker Chemie AG, Europes biggest maker of polysilicon, saw first-quarter net profits skyrocket from 5.1 million a year ago to 64.2 million as revenues rose 7.5% to 1.16 billion.
The German chemical company attributed its vastly improved performance on higher volumes and better solar-silicon prices as well as "special" income that resulted from restructured contractual relationships with a major solar-sector customer. As part of that agreement, Wacker retained advance payments and received damages totaling 114 million. Adjusted for this special income, earnings before interest, tax, depreciation and amortization (EBITDA) grew by approximately 29% year on year.
All five business divisions contributed to growth in the quarter. As a result, the company said it more than compensated for price pressure in some product segments and for unfavorable exchange-rate effects due to the weaker U.S. dollar and Japanese yen.
Wacker had a good start to the new fiscal year in Q1 2014, said CEO Rudolf Staudigl in Munich on Monday. "Customer demand for our products rose noticeably throughout all divisions in the first quarter. At the same time, price pressures have eased in a number of segments. Especially for solar silicon, we are seeing better prices than a year ago. Our sales and earnings trend in Q1 and our current order level are supporting our optimistic view on the coming months."
Asia continued to reinforce its position as the groups most significant sales region by far, with some 42% of total sales in the region. Sales in Asia rose nearly 13% to 490.2 million. In Europe, Wacker generated sales of 274.1 million from January through March, a 7% increase compared to a year ago.
Wackers full-year 2014 forecast remains unchanged. The company expects sales in 2014 to increase by a mid-single-digit percentage (total revenue in 2013 reached 4.48 billion). Net income is likewise expected to rise compared to the previous year.