SGL Carbon expects steeper drop in EBITDA in 2013

Article by Anita Panait, on April 22, 2013

SGL Carbon SE has updated its full-year profit outlook for 2013 to reflect a reduction in earnings before interest, taxes, depreciation and amortization (EBITDA), as the company suffered a "slow start" to the year, particularly for its graphite-materials and carbon-fiber divisions. In a statement, SGL said it expects to post a 2013 EBITDA that will be 20 percent to 25 percent lower than the EUR240 million ($313 million) it logged before write-offs in 2012.

Prior to the outlook update, SGL only expected a 10 percent to 15 percent decline. Ulle Woerner, an analyst at Landesbank Baden-Wuerttemberg, remarked to Bloomberg News that SGL’s original profit forecast was not “particularly positive,” so reducing the outlook even further is “naturally exceptional."

Woerner noted that currently, there are negatives in many segments with almost no positives, which means the decline cannot be attributed to one industry. SGL said that it expects its EBITDA for the first three months of 2013 to be at EUR32 million to EUR35 million, adding that there is "increasing uncertainty about the business recovery" in the second half of the year.

SGL is partly owned by the BMW and Volkswagen groups. BMW holds a 15.7-percent stake in the SGL while VW Group controls around 8.2 percent. SGL has a joint venture with BMW to produce carbon-fiber materials for the i3 electric car and i8 plug-in hybrid. Accounting for 16 percent of SGL’s sales is its loss-making division for carbon fibers and composite materials used in vehicles, airplanes. Its biggest division, which accounts for around half of its total revenues, produces electrodes for the steel industry and cathodes for aluminum makers.

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