Solvay records a net loss of 1.5 billion euros in the second quarter due to the coronavirus

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Belgian chemicals group Solvay reported a net loss of 1.54 billion euros in the second quarter on Wednesday due to asset depreciation linked to Covid-19. This depreciation, announced at the end of June, follows “deterioration of economic results linked to the Covid-19 health crisis“and mainly concerns the American company Cytec, specializing in innovative thermoplastic components, acquired in 2015.

Declining turnover

Turnover was down 18% in the second quarter, to 2.175 billion euros, and 11% over the first half, to 4.649 billion euros, due to the drop in volumes which impacted the aeronautics, automotive, oil and gas and construction sectors. The healthcare, agri-food, personal and home care, and electronics sectors proved to be more resilient and mitigated the decline in troubled markets.

The underlying net profit – which therefore does not take into account the depreciation of assets – came to 109 million euros, down 65.7% compared to the second quarter of 2019.

Proud of the way Solvay employees weathered the storm

I am very proud of the way Solvay employees weathered the storm“commented Ilham Kadri, CEO of the company.”During the first half of 2020, the sustained attention paid to customers, costs and cash enabled us to achieve 170 million euros in cost savings and to generate a record level of free cash flow of 435 million euros. ‘euros.

Ilham Kadri told AFP that the underlying result was “the real operational performance of the company“. She also judges”very correct“the EBITDA margin (gross operating surplus) at 20.2%, against 23.5% the previous year.

The outlook for the group remains complicated, however, in a “particular context of persistent global macroeconomic uncertainty, implying limited visibility“.

Solvay thus foresees “dynamics still difficult in the third quarter before an improvement in the fourth quarter“. “Some regions have already recovered, sales in China in particular are returning to pre-Covid levels“, she underlined.

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