UPDATE 1-Wacker Chemie says Q2 core profit up 22 pct

Tag : Electronic Chemical

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FRANKFURT, July 31 (Reuters) - German chemicals group Wacker Chemie(WCHG.DE: Quote , Profile , Research ) reported a 22-percent rise in second-quarter core profits,beating analysts' expectations, mainly thanks to its polysiliconbusiness in the red-hot solar sector.
Wacker Chemie said on Thursday earnings before interest, tax,depreciation and amortisation (EBITDA) rose to 317.9 million euros($495.5 million) in the quarter from 260.8 million a year ago,beating the Reuters poll average of 293 million.
Sales rose 17 percent to 1.123 billion euros, above expectations.
Wacker Chemie maintained its outlook, and said it still expected2008 sales to rise well over 10 percent and EBITDA to continue itsupward trend.
But Wacker cautioned the final level of earnings growth wouldlargely depend on developments in the global economy, raw-materialand energy costs, and exchange rates.
Earlier this month, U.S. rival MEMC Electronic Materials (WFR.N: Quote , Profile , Research ) shocked markets with a lower-than-expected quarterly profit andby lowering its 2008 outlook.
Wacker Chemie trades at 12.3 times projected 2009 earnings, at apremium to the European chemical sector index, which trades at 11.6times.
Analysts at Merrill Lynch said the premium was justified due to ahigher EBITDA margin profile and the security provided fromlong-term contracts in the core polysilicon division.
(Reporting by Eva Kuehnen, editing by Knut Engelmann)