(Reuters) - German chemicals maker Wacker Chemie reported on Monday a 60% drop in its core earnings for 2023, weighed down by lower prices along with persistently high energy costs and reduced plant-utilization rates.
The Bavarian-based company saw its preliminary 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) drop to 824 million euros ($893.30 million), below investors' expectations for 835 million euros, according to a poll compiled by Vara Research.
"The global industrial engine began to stutter in 2023 and many companies felt the impact, as did we at Wacker," Chief Executive Christian Hartel said in a statement.
"Price pressure was high, and the recovery in customer demand that was hoped for at the beginning of the year did not materialize," he added.
The company, which is expected to release its full-year results on March 12, managed however to slightly beat expectations regarding its bottom line, achieving a net income of 330 million euros versus 309 million euros expected by investors.
The German chemicals sector, Europe's largest, struggled throughout 2023 with customers reluctant to place new orders as prolonged economic uncertainty kept raw materials and energy prices high.
Trade disruptions caused by militant attacks in the Red Sea have since added to the industry's woes.
"A recovery in demand is currently not in view," Hartel said.
($1 = 0.9224 euros)