Covestro Enters New Era Amid Operational Challenges and Leadership Exodus

Covestro's 2025 report shows high losses and a management exodus after its ADNOC acquisition, highlighting the dual challenge of stabilizing operations and leadership.

The completion of Covestro's acquisition by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC), marks a definitive turning point for the chemical group. The recently published 2025 annual report, its final one as an independent entity, lays bare significant operational difficulties. This corporate transition coincides with a wave of departures from the senior leadership team, raising questions about how swiftly the business can be stabilized under its new ownership.

Operational Setbacks and Financial Strain in 2025

Covestro's 2025 fiscal year was characterized by substantial pressure, according to the report. The company recorded high operational losses and experienced a notable capital outflow. A primary headwind cited was the persistent chemical industry crisis, which created a challenging market environment for all sector participants.

Compounding these broader issues was a significant location-specific setback. A fire at the Dormagen production plant negatively impacted operational performance and resulted in additional capital expenditures. Consequently, the year's financial results reflect the severe impact of an adverse market and tangible disruptions within the production network more than they do routine business activities.

Management Turmoil Follows Change of Control

In parallel with these financial results, a major personnel shift is underway. Since the formal change of control in December of the prior year—with strategic and operational steering now under XRG—the company has witnessed a conspicuous exodus of top-tier management figures.

The report directly links this leadership drain to the internal upheavals following the end of Covestro's independence and its integration into new corporate structures. For XRG, this presents a dual challenge: stabilization is not merely a matter of plants and costs but also of retaining critical expertise and ensuring continuity in the executive suite.

Share Price Stability Masks Underlying Uncertainty

On the trading floor, the current situation appears technically contained rather than driven by a strong trend. Shares closed at €60.72, a mere 0.46% below the 52-week high of €61.00. However, a Relative Strength Index (RSI) reading of 30.3 signals weak short-term momentum, while the 30-day annualized volatility remains comparatively low at 2.16%.

This technical picture aligns with the overarching narrative of strategic transition and operational cleanup. The acquisition is complete, and the 2025 report draws a clear line under the old era. XRG's immediate task, as outlined, is unequivocal: to stabilize core operations in the wake of the industry crisis and the Dormagen incident, and to steady the leadership structure.