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Feb 23 (Reuters) - German chemicals maker Covestro forecast its 2021 core profit will bounce back above 2019 level on Tuesday, driven by volume growth and strong performance across all segments helped by cost-cutting measures.
Covestro, whose main customers include the automotive industry and electronics manufacturers, said it expected earnings before interest, taxes, depreciation, and amortization (EBITDA) of between 1.7 billion euros and 2.2 billion euros($2.07 billion-$2.68 billion )in 2021.
After an early hit from the coronavirus pandemic, the group has seen a swift recovery in demand in the second half of 2020 and higher selling prices.
“Backed by a significant recovery in demand from mid-year, we returned to our growth trajectory in the second half of the year and generated earnings that almost reached prior-year level,” said Chief Financial Officer Thomas Toepfer.
The maker of chemicals for heat insulation foams and transparent polycarbonate plastics expects first-quarter EBITDA in the range of 700 million euros to 780 million euros.
Covestro said on Tuesday it saw core volume growth of between 10% and 15% in 2021, with around 6 percentage points attributable to the planned acquisition of the Resins & Functional Materials business from Dutch peer DSM’s.
Last September, Covestro agreed to buy the business for about 1.6 billion euros, banking on a rebound of a global economy depressed by the pandemic, and said it expected it to add about 1 billion euros in revenues and 141 million euros in core earnings to its Coatings, Adhesives, Specialties (CAS) division.
Covestro reported fourth-quarter EBITDA of 637 million euros, slightly below 643 million euros expected on average by analysts in a company-provided consensus.
$1 = 0.8218 euros Reporting by Anna Rzhevkina and Linda Pasquini; Editing by Tomasz Janowski