Chemicals maker Covestro Q3 profit beats on cost-cutting, demand recovery

Credit: REUTERS/WOLFGANG RATTAY

German chemicals maker Covestro reported a better-than-expected third-quarter profit on Tuesday, citing cost-cutting measures, improved volumes in Asia-Pacific and demand recovery after a coronavirus-induced slump.

Adds details, CEO quote, background

Oct 27 (Reuters) - German chemicals maker Covestro 1COV.DE reported a better-than-expected third-quarter profit on Tuesday, citing cost-cutting measures, improved volumes in Asia-Pacific and demand recovery after a coronavirus-induced slump.

In the second quarter, the company had managed an unexpectedly swift rebound from a pandemic-related slowdown and finance chief Thomas Toepfer had said the trend would continue into the last months of the year.

"In the third quarter, demand from our customer industries experienced a strong rebound," Chief Executive Markus Steilemann said in a statement on Tuesday.

Covestro, whose main customers include the automotive industry and electronics manufacturers, said its net income for the quarter ended Sept. 30 came in at 179 million euros ($211.56 million), compared with the 112 million euros expected on average by analysts in a company-provided poll.

The company's free operating cash flow for the quarter also jumped by almost 50%, helped by increased inflows from operations and lower property, plant and equipment expenditures, it said.

The company confirmed the preliminary figure for third-quarter sales and earnings before interest, taxes, depreciation and amortisation (EBITDA) as well as the guidance adjustments it had announced at the beginning of the month.

($1 = 0.8461 euros)

(Reporting by Zuzanna Szymanska in Gdansk; Editing by Rashmi Aich)

((zuzanna.szymanska@thomsonreuters.com; + 48 58 778 52 86;))

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