By Ed Frankl
Covestro AG on Monday raised its full-year earnings guidance after posting third-quarter results that beat expectations, as demand continued to return despite supply-chain bottlenecks.
The German chemicals company said net profit for the three months to the end of September was 472 million euros ($546 million), more than double the EUR179 million the previous year.
Quarterly sales rose 56% to EUR4.30 billion, on continuing strong demand and high selling prices, Covestro said.
The figures beat expectations of net profit of EUR445 million and sales at EUR3.93 billion, according to analysts' estimates provided by the company.
"We were able to carry the entire momentum from the first half of the year over to the third quarter and benefited from the continuing high pricing level," Chief Executive Markus Steilemann said.
However, while global demand was solid, limited product availability due to the effects of unplanned production stoppages curbed growth potential, Covestro said.
Earnings before interest, taxes, depreciation, and amortization rose 89% to EUR862 million due to high margins and increased selling prices that enabled the company to offset the rise in raw-material prices, it said.
Leverkusen-based Covestro said it was raising its full-year earnings guidance on the basis of its business performance, and now anticipates 2021 Ebitda of between EUR3.0 billion and EUR3.2 billion compared with EUR2.7 billion-EUR3.1 billion previously.
However, it ticked down its full-year core volume growth outlook to between 10% and 12% from 10% and 15%, again citing limited product availability.
In addition, Covestro lowered its 2021 free operating cash flow guidance to between EUR1.4 billion and EUR1.7 billion, from EUR1.6 billion and EUR2.0 billion, and raised its return-on-capital-employed outlook to 19%-21%, from 10%-15% previously.
Shares at 1450 GMT were down 1.0% at EUR53.96.
Write to Ed Frankl at edward.frankl@dowjones.com