German polysilicon maker Wacker Chemie posted forecast-beating fourth-quarter results on Thursday, citing strong demand for the polysilicon it supplies to Asia's booming solar industry.
Following years of falling government subsidies for solar power in Europe, the global industry is taking heart from China's decision to more than quadruple solar generating capacity to 35 gigawatts by 2015 and Japan's push to find alternatives to lost nuclear power following the 2011 Fukushima disaster.
Wacker Chemie, the world's No.2 maker of polysilicon, a key ingredient needed to make solar cells, said fourth-quarter earnings before interest, tax, depreciation and amortization (EBITDA) rose 18 percent to 158 million euros ($213.8 million), beating the 119 million euros Thomson Reuters estimate.
Sales reached 1.09 billion euros, also slightly higher than the 1.08 billion analyst forecast.
"In polysilicon, volumes picked up strongly, even though prices have not improved noticeably in the fourth quarter," Chief Executive Rudolf Staudigl said.
Following the results, DZ Bank analyst Peter Spengler kept a "buy" rating on Wacker's shares.
Wacker Chemie generates about 40 percent of its sales in Asia and its polysilicon business accounts for more than one-third of EBITDA.
China, which is expanding strongly in renewable energy, was the main driver for polysilicon demand, Wacker Chemie said, offsetting a weak solar industry in Europe, where years of falling government subsidies have driven numerous makers of solar panels and cells, most notably Q-Cells, Solon and Conergy, into insolvency.
Polysilicon prices tumbled to about $20 per kilogram from a 2008 peak of almost $400, squeezing profit margins at Wacker Chemie as well as rivals Hemlock Semiconductor and Norway's Renewable Energy Corp, but have been largely stable in recent months.
Wacker Chemie also competes with Mitsubishi Materials, South Korea's OCI Co and China's GCL-Poly Energy Holdings.