Cologne, Germany – Lanxess expects the business year 2013 to remain challenging after the German specialty chemicals company posted a decline in second quarter sales and earnings. Compared to the strong second quarter of the previous year, sales were down by roughly 12 percent to EUR 2.1 billion in the second quarter of 2013. EBITDA pre exceptionals declined by 45 percent against the prior-year period to EUR 198 million and was in the middle of the guided range of EUR 174-220 million. Net income declined by 95 percent year-on-year to EUR 9 million.
In contrast to expectations in May, Lanxess does not see an improvement in business conditions in the second half of the year. Customers continue to destock their inventories, noticeably in Asia, and overall consumer sentiment remains weak. For the year 2013, the company has substantiated its outlook given in May of EBITDA pre exceptionals of less than EUR one billion. Lanxess now anticipates EBITDA pre exceptionals of EUR 700-800 million, excluding potential inventory devaluations. “The first half of 2013 does not meet our own high standards,” said Lanxess’ Chairman of the Board of Management Axel C. Heitmann. “Trading conditions for our businesses remain tough and the fragile sentiment in Europe is now evident in other markets that are important for us, such as China and Brazil.”
Against the background of the continuing weak demand in the current business year, the target of EUR 1.4 billion EBITDA pre exceptionals in 2014 is no longer realistic, even taking into account an expected upturn in demand next year. Despite the difficult conditions, Lanxess is maintaining its mid-term target of EUR 1.8 billion EBITDA pre exceptionals in 2018, although it has become more challenging to reach it. “The megatrends, above all mobility and agriculture, still remain intact and the growth markets will see better times again. That is why we believe we have in principle the right set-up,” said Heitmann.
Source: Rubber World
