German specialty chemicals company Evonik has increased its full-year earnings outlook after reporting preliminary second-quarter results that exceeded market expectations. The stronger performance was supported by higher sales volumes, improved pricing, and continued cost-saving initiatives.
The company now expects adjusted EBITDA for the full year to range between €2.0 billion and €2.2 billion, compared with its previous guidance of €1.7 billion to €2.0 billion.
For the first half of the year, Evonik estimates adjusted EBITDA of approximately €1.1 billion. Second-quarter adjusted EBITDA is projected to come in between €600 million and €650 million, comfortably above analysts’ expectations of roughly €567 million.
Supply Chain Benefits May Ease
Evonik noted that recent supply chain disruptions had worked in its favor by limiting production at some Asian competitors facing shortages of raw materials. However, the company expects this advantage to gradually diminish as global shipping conditions improve following the reopening of the Strait of Hormuz.
Despite this, management believes the Animal Nutrition business will likely maintain its positive momentum through the third quarter, although broader market uncertainties remain for the second half of the year.
Market Reaction
Following the announcement, Evonik shares initially declined by around 3% before recovering much of the loss. The stock was trading about 0.1% lower during late morning trading.
Evonik is scheduled to publish its complete second-quarter financial results on August 4, when investors will receive a more detailed update on the company’s performance and outlook.