(Reuters) -German chemicals maker Covestro narrowed its full-year core profit forecast on Thursday, citing persistently weak demand and the resulting oversupply in its key markets. The company, who
Covestro Lowers Profit Forecast, ADNOC Acquisition on Track for Q4
Covestro's Financial Outlook and Acquisition Update
By Bartosz Dabrowski
Impact of Market Demand
(Reuters) -German chemicals maker Covestro narrowed its full-year core profit forecast on Thursday due to soft demand, but said its financial stability would be secured as the $17 billion takeover by Abu Dhabi state oil firm ADNOC is set to close in the fourth quarter.
ADNOC Takeover Details
Covestro, which had already cut its outlook twice this year, now sees its yearly earnings before interest, taxes, depreciation and amortization between 700 million and 800 million euros ($816 million and $933 million). Its previous forecast was for the EBITDA to come in a range of 700 million to 1.1 billion euros.
Regulatory Approval Process
The company, whose products include foam chemicals used in mattresses, car seats and insulation for buildings, had said earlier this year that the prospect of higher U.S. tariffs was leading to a huge oversupply of products to the market there, particularly from the Asia-Pacific region, which had then caused a big drop in prices.
Financial Implications of the Deal
Covestro also said on Thursday that a fire at an external substation in Dormagen, Germany would have a negative impact in a low three-digit million euro range for the full year.
Its third-quarter EBITDA fell 15.7% to 242 million euros, beating an analysts' average estimate of 183 million euros in a company-provided consensus.
CLOSING OF ADNOC'S TAKEOVER ON TARGET
Regulatory approvals for the takeover by ADNOC, currently being examined by the European Commission, are progressing as expected and the deal is on track for closing in the final quarter of the year, the company said.
The EU regulator was concerned that ADNOC, in its biggest acquisition yet and one of the largest foreign takeovers of an EU company by a Gulf state, may be using state subsidies to acquire the chemicals company.
($1 = 0.8575 euros)
(Reporting by Bartosz Dabrowski in Gdansk, editing by Milla Nissi-Prussak)
