Lenzing revenue down 6.4% in 2018 first half

08 Aug '18
3 min read
Courtesy: Lenzing
Courtesy: Lenzing

The revenue of Lenzing in the first half of fiscal 2018 has declined by 6.4 per cent compared with the first half of the previous year to €1,075.4 million. This decrease is due to less favourable currency exchange rates. EBITDA decreased by 28.1 per cent to €194.8 million, especially due to price increases for key raw materials and higher energy prices.

The EBITDA margin fell from 23.6 per cent in the first half of 2017 to 18.1 per cent in the first half of 2018. EBIT declined by 37 per cent to €128.7 million, leading to a lower EBIT margin of 12 per cent (H1 2017: 17.8 per cent). The net profit for the reported period dropped by 39.3 per cent from €150.3 million in the previous year to a total of €91.3 million. Earnings per share equaled €3.44 (H1 2017: €5.55).

In line with the group’s specialty strategy, two milestones were set in the first half of 2018: Lenzing announced an investment of up to €30 million in another pilot line for the production of Tencel Luxe filaments at the Lenzing site. In addition, the company also introduced the environmentally friendly process for the production of Lenzing Ecovero branded viscose fibres at its Chinese site

With the Tencel brand as an umbrella brand for all specialty products in the textile segment and the Veocel brand as the umbrella brand for all specialty fibres in the nonwoven segment as well as the new master brand, which was presented in March, Lenzing showcased its strengths in a targeted manner.

"So far, the financial year 2018 proved to be as challenging as expected, and market headwinds were clearly noticeable. In this market environment, we are satisfied with the solid results we report. We are proud that with our corporate strategy sCore TEN and the focus on growth with specialty fibers we show big steps in the right direction," says Stefan Doboczky, chief executive officer of the Lenzing Group. “We will continue to implement our strategy with great discipline and are convinced that this will steadily improve the long-term profitability of Lenzing,” Doboczky adds.

The Lenzing Group is very well positioned in this market environment with its corporate strategy sCore TEN and will continue its consistent focus on growth with specialty fibers. Still, it sees challenging market conditions for the second half of 2018. In addition to the price pressure on standard viscose, the prices of some key raw materials such as caustic soda are still at a very high level and exchange rates continue to be volatile. The specialty fibres are expected to continue their very positive development. In this context, the Lenzing Group is satisfied with the earnings development to date, but underlines its estimate that the results for the year 2018 will be lower than the outstanding results in the last two years. (RR)

Fibre2Fashion News Desk – India

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