Chemicals

Q1 2019

In the Chemicals segment, sales were considerably lower than in the first quarter of 2018. The Petrochemicals division in particular saw a considerable decline in sales, while the Intermediates division recorded a slight decrease.

Sales development was driven by lower volumes and prices in both divisions. In the Petrochemicals division, sales volumes declined in all regions. This was primarily attributable to preparations for scheduled maintenance shutdowns, as well as significantly lower capacity utilization of the condensate splitter in Port Arthur, Texas. Volumes development in the Intermediates division was dampened by customer reticence in the automotive, coatings, textile and wind turbine industries. In addition, the Chinese New Year holiday curbed demand in Asia more strongly than in the prior-year quarter. Prices declined significantly, particularly in the Petrochemicals division. This was attributable to higher product availability on the market, especially of steam cracker products in North America, as well as to lower raw materials prices. In the Intermediates division, prices declined only slightly, particularly in Asia. Currency effects, especially relating to the U.S. dollar, had a slightly positive effect on sales in both divisions.

Income from operations (EBIT) before special items decreased considerably compared with the prior-year quarter. Both divisions recorded lower earnings, particularly Petrochemicals. The development of EBIT before special items was largely due to lower margins in the Petrochemicals division, especially for steam cracker products, as well as the lower volumes in both divisions. In addition, fixed costs in both divisions rose slightly. In the Petrochemicals division, this was primarily attributable to higher maintenance expenses, while in the Intermediates division, the development of fixed costs was mainly negatively influenced by currency effects.