The Duisburg-based German investment holding company PCC SE achieved sales growth of 8.0% year on year to €237.7 million in the third quarter of 2024. However, increased fixed costs, interest expenses, scheduled facility shutdowns and exchange rate losses led to a significant decline in earnings. “Overall, the business performance of the PCC Group in the third quarter was governed by the persistently weak economy. We were also impacted by the persistently aggressive export practices of non-European countries, above all China and – in the case of silicon metal – Brazil,” explained Riccardo Koppe, Member of the Executive Board
and Chief Financial Officer of PCC SE. “As a result, the PCC Group fell short of management expectations in Q3.”
Gross profit for the third quarter of 2024 amounted to €74.4 million, a slight increase of 1.2% on the same quarter of the previous year. The Q3 gross margin came in at 31.1% versus 33.4% in the third quarter of 2023. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 53.9% year on year to €6.8 million in the third quarter. At the operating profit level (EBIT, earnings before interest and taxes), the PCC Group recorded a loss of €–14.3 million in the third quarter of 2024. After a positive operating result of €3.3 million in the second quarter, this means a temporary interruption to the upward trend. At pre-tax level, exchange rate losses of around €–13 million in the third quarter contributed to negative EBT amounting to €–39.1 million.
Group segment performance
The Surfactants & Derivatives segment in particular recorded positive business development, with the performance of the Consumer Goods division exceeding both the same quarter of the previous year and the company’s own expectations. The Intermodal Transportation division, the dominant business area of the Logistics segment, also continued its positive sales and earnings performance in the third quarter. Quarterly sales rose by 24.0% year-on-year to € 38.5 million, while EBITDA increased to € 6.4 million.
The Polyols & Derivatives segment recorded stable business development in the third quarter. Quarterly sales fell slightly by 1.4% compared to the previous year. In the Chlorine & Derivatives segment, the third quarter was characterized by maintenance measures. The segment achieved a positive operating result despite lower volumes and declining prices.
The Silicon & Derivatives segment remained in the red in the third quarter of 2024, with an operating result of € -16.1 million. Following the restart of the second furnace of PCC BakkiSilicon hf., Húsavík (Iceland), in January, production stabilized at full capacity, although furnace operation had to be temporarily restricted in May. In addition, there were valuation-related exchange rate losses of around € -15 million.
While the Trading & Services segment experienced a seasonally weaker third quarter, cumulative EBITDA and operating profit over the first nine months remained well above the levels of the previous year. In the Holding & Projects segment, one of the prime focuses in the third quarter was the further expansion of the Group’s core chemicals business in the US market: PCC SE is examining the possible construction of its own chlor-alkali plant in the USA. Among other things, the order for the process design package (PDP) was placed in the third quarter, with supply and purchase agreements also having been negotiated.
Addendum to November 25, 2024:
As in every quarter, the Management Board of PCC SE presented the quarterly figures in an interactive Internet investor conference. The PCC Webcast Q3/2024 took place on Monday, November 25 with 187 participants. PCC Management Board member and CFO Riccardo Koppe answered questions from the audience.
