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Lanxess posts 5.7% decline in Q2 revenues
08
Aug '14
Germany based Lanxess AG reported a 5.7 percent fall in sales to €2.02 billion in the second quarter ending June 30, 2014, compared to €2.14 billion in the comparable quarter of 2013.

However, EBITDA pre exceptionals surged to €239 million in the quarter under review from €198 million from a year earlier, while EBITDA margins too improved to 11.8 percent from 9.2 percent in second quarter of 2013.

Lanxess attributes the surge in EBITDA to higher volumes, increased utilization of production capacities and savings from the efficiency program "Advance”. It also said that EBITDA was at the upper end of its earlier guidance of between €220 million and €240 million.

Improved financial results and lower exceptional charges also led to net income skyrocketing substantially to €55 million, compared to €9 million for the same period of last year. In second quarter of last year, Lanxess had incurred a cost of €40 million for restructuring in the Performance Chemicals segment.

Net financial liabilities fell from roughly €1.7 billion on December 31, 2013, to about €1.5 billion on June 30, 2014, mainly due to the successful capital increase in May 2014.

Operating cash flow increased substantially to €178 million due to the improved business performance and lower bonus payments for 2013.

Segment wise, sales in the Performance Polymers segment declined by 12.1 percent to roughly €1 billion in a persistently difficult market environment. The decrease was mainly due to the continuing low level of selling prices in all the businesses. EBITDA pre exceptionals in the segment surged by €28 million to €122 million, mainly as a result of higher capacity utilization.

Continuing strong demand for agrochemicals and products from the aromatics network, sales in the Advanced Intermediates segment rose by 2.5 percent to €403 million. The Saltigo business unit benefited from new projects in the agrochemical industry. EBITDA pre exceptionals of the segment held nearly steady year on year, at €73 million.

Sales in the Performance Chemicals segment advanced by 1.4 percent to €569 million, mainly due to higher volumes. Businesses providing positive impetus included material protection products, leather chemicals and pigments. EBITDA pre exceptionals, at €86 million, was a substantial 28.4 percent above the €67 million posted in the prior-year period.

Lanxess continues to expect the global economy to show a slight recovery during the reminder of the year. It continues to anticipate higher earnings in 2014 compared to the previous year, taking into account the start-up costs of about €10 million for the EPDM rubber plant in China in the fourth quarter, as well as maintenance shutdowns.

"We are narrowing our original earnings guidanceof between €770 million and €830 million, and now expect to achieve EBITDA pre exceptionals in 2014 of between €780 million and €820 million,” said Matthias Zachert, Chairman of Lanxess AG.

Fibre2fashion News Desk - India

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