Chemicals

3rd Quarter 2018

Sales in the Chemicals segment rose considerably compared with the prior-year quarter as a result of higher prices in all divisions, especially in Petrochemicals. Income from operations (EBIT) before special items declined considerably versus the third quarter of 2017. This was primarily due to lower margins for isocyanates in the Monomers division and steam cracker products in the Petrochemicals division. Earnings were also negatively impacted by higher fixed costs due, among other factors, to increased maintenance expenses. Improved earnings in the Intermediates division were unable to compensate for this.

Factors influencing sales, Chemicals 3rd quarter 2018

Petrochemicals

In the Petrochemicals division, sales considerably exceeded the figure for the prior-year quarter. This was primarily attributable to higher sales prices on the back of significant growth in raw materials prices for naphtha in Europe and butane in North America. Volumes rose significantly overall, although production in Ludwigshafen, Germany, was affected by the low water levels on the Rhine River. EBIT before special items decreased considerably, mainly due to higher fixed costs. The prior-year figure included insurance refunds. Furthermore, maintenance expenses were higher than in the third quarter of 2017. The low water levels on the Rhine River and the significant increase in raw materials prices also contributed to the decline in earnings.

Monomers

Sales in the Monomers division declined considerably compared with the third quarter of 2017. This was driven by lower sales volumes, mainly in the isocyanates business as a result of higher market supply. Plant shutdowns also had a negative impact on sales volumes. We were able to increase prices overall, although prices for isocyanates declined. EBIT before special items was down considerably year on year. This was primarily due to lower margins, especially for isocyanates. Lower fixed costs had an offsetting effect.

Intermediates

The Intermediates division achieved considerable sales growth as against the third quarter of 2017. This was attributable to higher prices in all regions, especially in the acids and polyalcohols business, as well as higher sales volumes in North America in particular. EBIT before special items rose slightly compared with the prior-year quarter as a result of the improved margins and volumes growth. Higher fixed costs, mostly from plant shutdowns, had an offsetting effect.