Lanxess on Thursday reported higher than first forecast sales and earnings and gave a revised guidance for the whole of 2015. Second-quarter Ebitda pre exceptionals was 13% higher at €270 million ($295.1 million) compared with the year-earlier quarter. Sales rose 4.3% to €2.1 billion. Higher volumes and positive currency effects more than offset the raw material induced lower selling prices. Ebitda margin pre exceptionals climbed to 12.8% from 11.8% in the second quarter of 2014. Net income improved from €55 million in the second quarter of 2014 to €87 million in the latest quarter.
For the whole of 2015, Lanxess expects to achieve Ebitda pre exceptionals of between €840 and €880 million, against a previous forecast of between €820 and €860 million. “In the second quarter of this year, we posted a very good operating result to which all segments of our company contributed. On the basis of these strong figures and the rapid implementation of our realignment program, we assume that our annual result will be higher than previously anticipated,” said Matthias Zachert, chairman.
Capital expenditure declined by more than half in the second quarter from €154 million to €73 million, following completion of major projects in Asia. Performance polymers reported a 3.5% rise in sales to about €1.1 billion. Ebitda pre exceptionals climbed 22.1% to €149 million. Advanced intermediates posted a 3.1% increase in sales to €468 million and a 2.6% higher Ebitda pre exceptionals of €80 million. The performance chemicals segment also saw very good performance with sales rising 6.8% to €553 million and Ebitda pre exceptionals 35.8% higher at €110 million. Low raw material prices, positive currency effects and savings contributed to the improvement in earnings.
Lanxess has moved to the second of its three-phase realignment program. This part of the program aims to improve operational competitiveness and includes the reorganization of production networks for its ethylene propylene diene monomer and neodymium-based butadiene rubber. The third phase focuses on improving the competitiveness of the business portfolio, especially through potential alliances in the rubber business. “In this connection, we are currently engaged in very constructive discussions and assume that we will achieve concrete results in the course of the second half of the year,” Zachert says.
Lanxess has initiated a crave-out process to transfer its rubber business to a legally independent business entity. “In this way, we are creating the conditions that will enable us to bring the rubber business into an alliance,” Zachert says. The new entity will comprise the tire & specialty rubbers and high performance elastomers business units, with their 20 production facilities and 3,700 employees as well as supporting administrative functions.
By Natasha Alperowicz