April 16 (Reuters) - Robust demand and high chemicals prices mean Covestro expects volumes and margins to continue rising beyond 2021, the German company said on Friday.
The group, which makes plastics as well as chemicals for insulation and upholstery foams, said on Tuesday it expected core profits this year to come in 40-70% above pre-pandemic levels after a rapid recovery from the crisis.
Chief Executive Markus Steilemann told Friday’s annual shareholder meeting that volumes should continue to increase as the company focuses on economies that are growing above the global average. He did not identify these markets.
He added market prices for chemicals were above the long-term average, but had not yet reached a peak, and supply looked set to grow more slowly than demand in the coming years, which should translate into higher margins.
“As a result, we see wave-like long-term growth,” the CEO said.
At 1415 GMT, Covestro shares, up around 15% so far this year, were 2.3% higher at 58.08 euros.
The company said in February it planned to pay out 35-55% of net profit in dividends.
Finance chief Thomas Toepfer told shareholders the payout would be near the lower end of the range in years with high earnings and around the higher end in tougher years.
“By taking this approach, we will ensure our investors always receive an attractive dividend,” he said. (Reporting by Zuzanna Szymanska in Gdansk. Editing by Mark Potter)