Textile fiber maker Lenzing's 9-months sales up

24 Nov '05

3 min read

Cellulose fiber technology leader Lenzing Group sales for the first nine months of 2005 rose by 9.4% to EUR 697.6 million as compared to EUR 637.5 mill. for the reference period of 2004. This was effected by an increase in quantity and by the full consolidation of the Tencel group for the whole reporting period despite a weak market and declining fiber prices.

EBITDA (income from operation before depreciation) for the period remained at its high level, with EUR 115.5 mill (2004: EUR 115.3 mill.) EBIT (income from operations) declined by 8.9% to EUR 68.8 mill (EUR 75.5 mill) and EBT (income before taxes) decreased by 13.6% to EUR 67.4 million (EUR 78.0 mill). Net income was 11.0% lower at EUR 50.8 million (EUR 57.0 million.)

The EBIT margin came to 9.9% for the first nine months of 2005 (2004: 11.9%) and the EBITDA margin to 16.6% (18.1%), sustaining Lenzing's position as one of the strongest income performers in the fiber industry.

Business sector fibers
Global fiber business decline continued in the third quarter. The unfavorable price situation affected Business Unit Textile Fibers as well as Business Unit Nonwoven Fibers. This year's prices reached their present annual low in the third quarter. Moreover, Lenzing is faced with a steep rise in energy and raw material costs.

Primary energy prices rose by about 15 % in the first three quarters, as compared to last year values. This corresponds to an additional burden of about EUR 4.5 mill. Despite full capacity production at all sites and an enhanced product mix, the erosion of margins continued, as prices failed to rise in step with costs. Lenzing will therefore successively implement fiber price increases in the coming months.

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