Lanxess slips in to profits despite challenging markets
In 2014, specialty chemicals group Lanxess said it substantially improved its operating result and net income in a challenging market and competitive environment.
Although sales declined slightly by 3.5 per cent to around €8 billion, EBITDA pre exceptionals rose 9.9 per cent to €808 million and it reported a net income in 2014 as against a net loss in 2013.
At the same time, Lanxess in a press release said, it significantly reduced its net indebtedness and tangibly increased operating cash flow.
According to Lanxess, sales fell marginally from lower selling prices, primarily in the Performance Polymers segment, while a slight rise in overall sales volumes was insufficient to offset this decline.
EBITDA pre exceptionals which grew 9.9 percent year-on-year was driven by contributions from all segments.
“This positive performance, despite lower selling prices was attributable above all to a reduced cost basis, improved capacity utilization and favorable exchange rate effects,” the German company added.
The Lanxess Group posted net income of €47 million in 2014, a massive hike of €206 million year-on-year, primarily from lower impairment charges.
Exceptional charges of around €180 million, mainly related to the realignment program, however, had an opposing effect.
Earnings per share amounted to €0.53 in the reporting year as against a loss per share of €1.91 in the previous financial year.
Lanxess informed that as previously announced the management and the supervisory board will propose a dividend of €0.50 per share, resulting in a total dividend payout of around €46 million.
In 2014, capital expenditures amounted to €614 million, slightly below the prior-year level of €624 million.
“During 2015, we intend to substantially reduce our capital expenditures to around €450 million,” Bernhard Düttmann, chief financial officer of Lanxess AG said.
In comparison with 2013, operating cash flow increased by €156 million to €797 million, due to business-related reasons and the decline in working capital.
Despite higher capital expenditures, net financial liabilities decreased to around €1.3 billion as of December 31, 2014, from €1.7 billion at year-end 2013.
“Particularly against the background of the persistently challenging business situation, the substantial improvement in earnings is gratifying,” Matthias Zachert, chairman at Lanxess AG said.
“Nevertheless, a great deal of work still lies ahead of us if Lanxess is to return to the path of long-term success and in 2015, we will continue to implement our program and set the course,” he too added.
In August 2014, Lanxess presented a three-phase realignment program, with the first phase, focused on improving the competitiveness of the company’s business and administrative structure.
The company has also initiated the first measures from the second phase, which is aimed at improving operational competitiveness.
The third phase of the program is aimed at improving the competitiveness of the business portfolio, particularly through partnerships in the rubber business. (AR)
Fibre2fashion News Desk - India