* New resins unit to drive growth after 2021
* Strong Q1 demand in Asia offset weather issues in U.S.
* Confirms 2021 guidance (Adds details, context, CFO comments from call)
April 28 (Reuters) - Covestro’s newly-acquired resins business will bolster long-term profit growth prospects from 2022, the German chemicals maker said on Wednesday, as strong demand in Asia helped it to hit first-quarter expectations.
The company, whose products can be used to make car seats and phone cases, recovered more quickly than expected last year from a coronavirus-related slump and management has said strong growth should continue in 2021 and beyond. But some analysts are sceptical whether the trend is sustainable.
However, finance chief Thomas Toepfer told Reuters that Covestro’s track record of growing earnings despite short-term supply-and-demand fluctuations should get a fresh lift from 2022 as it starts to profit from the purchase of rival DSM’s Resins and Functional Materials business.
“We are looking to the future with confidence as the new unit is an important growth factor that is not visible in our 2021 results because of integration costs,” Toepfer said in an interview.
Covestro completed the transaction on April 1 to boost its high-margin speciality chemicals portfolio with products such as coatings for optical fibres and recyclable carpets, and an extra 1 billion euros ($1.2 billion) in revenues.
First-quarter sales and net profit were in line with analyst expectations, and the company confirmed its 2021 guidance announced on April 13.
Better than expected quarterly results in foam chemicals and hard plastics were offset by a weaker performance in coatings, while strong demand in China and other parts of Asia balanced out raw material shortages due to the February cold snap in Texas.
$1 = 0.8282 euros Reporting by Zuzanna Szymanska and Karol Badohal in Gdansk. Additional reporting by Patricia Weiss. Editing by Tomasz Janowski and Mark Potter