Lanxess has reported significantly better-than-expected results in the second quarter of 2010, which the company says is due to its strategic positioning in the emerging markets. As a result, the specialty chemicals company has raised its earnings forecast for the business year 2010. It now expects Ebitda pre exceptionals of roughly €800 million for the full year after previously forecasting €650-700 million in May 2010.
Lanxess more than doubled Ebitda pre exceptionals year-on-year to €269 million in the second quarter. Earnings were primarily driven by ongoing strong demand for synthetic rubber in Asia and notably Latin America. Ebitda margin pre exceptionals - another key performance indicator - rose to 14.7% from 9.0% a year ago. The average capacity utilization rate of the company's plants stood at more than 85% in the second quarter.
Lanxess said its top 10 sales products in the second quarter were from the company's synthetic rubber and high-tech plastic business units, which mainly serve the tire and automotive industries.
Sales increased 48% year-on-year to €1.83 billion due to higher volumes in key customer industries and positive currency effects in the form of a weaker euro against the dollar and Brazilian real. Higher raw material costs were fully passed on to customers through product price increases. The company posted a net profit of €131 million in the second quarter in comparison to €17 million a year earlier.
Net debt at the end of the second quarter 2010 rose to €955 million from €794 million from the end of 2009 due to dividend payments and an increase in net working capital. This increase was in line with stronger business activity in general. Operating cash flow before changes in working capital rose to €203 million from €71 million a year earlier.
