The Duisburg-based holding company PCC SE achieved sales growth of 3.9% to €251.2 million in the first quarter compared with the previous year. Higher fixed costs, interest expenses, and exchange rate losses led to declines in earnings, although some segments of the Group performed quite well.
The higher consolidated sales achieved were mainly due to volume growth in the Surfactants, Chlorine, Polyols, and Logistics segments. The other segments recorded declines in sales due to price reductions caused by intense competitive pressure, with the Silicon & Derivatives segment hardest hit due to silicon production operations being restricted to just one of two furnaces.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) declined by 12.5% year on year to €13.4 million. At the segment level, Surfactants & Derivatives, Silicon & Derivatives, Trading & Services, and Logistics increased their EBITDA, with the other segments recording a decline in this earnings metric. The PCC Group’s operating result (EBIT, earnings before interest and taxes) decreased to €-7.9 million in the first quarter, and earnings before taxes (EBT) to €-32.3 million, including exchange rate losses of around €13 million.
“As in previous quarters, business development was impacted by intense competition, in some cases on unfair terms – as in the case of imports from China, for example – compounded by continuing economic weakness in Germany and the EU, i.e., in our main sales markets,” said Riccardo Koppe, member of the Executive Board and Chief Financial Officer of PCC SE. “In addition, the first quarter was affected by ongoing geopolitical upheavals, uncertainty due to the new political direction in Germany, which remained unclear until the middle of the first quarter, as well as the change in policy in the USA.”
Group segment performance
The Surfactants & Derivatives segment continued to perform exceptionally well. We were able to increase our selling prices slightly, despite ongoing competition from China and India. The segment achieved sales growth of 22.3% and an improvement in EBITDA of 15.3%. The Logistics segment also posted positive results, with intermodal container transshipments rising by 8.3% in the first quarter, sales by 6.9% and EBITDA by 8.8%. PCC has now assumed market leadership in this business area in Poland.
The Polyols & Derivatives segment continued the positive trend of the previous year and increased sales in the first quarter, although EBITDA declined, mainly as a result of falling polyether polyol profitability and the challenging competitive situation prevailing in the European market. The Chlorine & Derivatives segment was able to more than offset the decline in prices encountered with volume growth. Sales in the first quarter were 3.1% higher than in the previous year, but EBITDA fell due to unfavorable raw material and energy costs. The Trading & Services segment showed a positive trend, with gross profit in the first quarter up on the previous year due to lower commodity purchase prices.
The Silicon & Derivatives segment reduced its losses in the first quarter, but was only able to operate at half capacity at its Icelandic silicon plant due to power shortages. This was compounded by negative exchange rate effects from the US dollar’s performance, which weighed on the segment’s pre-tax earnings. The price-sensitive market environment continues to be dominated by low-cost imports from China and Brazil. We have therefore identified and partially implemented a series of measures to optimize our cost position. Depending on developments, the plant may be ramped up to full capacity again or need to be temporarily shut down.
In the Holding & Projects segment, the focus in the first quarter remained on expanding our core chemical business in the USA. We are looking into setting up our own chlor-alkali plant, and in December 2024 signed a long-term offtake agreement with US chemical company Chemours for chlorine supplies. The agreement forms the commercial core of the potential investment at Chemours’ site in DeLisle, Mississippi, and reduces potential market and sales risks. Work on engineering, financing, and the approval process was carried out in the first quarter.
Repayment of maturing bonds
On February 1, 2025, PCC SE redeemed on schedule the 4.00% bullet bond ISIN DE000A2YN1K5 issued in October 2019. The repayment volume amounted to €29.1 million. After the end of the quarter, the 3.00% bullet bond ISIN DE000A3MQEM0 issued in 2021 was redeemed in full on April 1 (repayment volume: €7.8 million).
Consolidated figures unaudited. This quarterly report is available online at https://www.pcc-financialdata.eu/.
