Lanxess Forecasts 15% Rise in Q1 Earnings After Dismal 2013
German speciality chemicals producer Lanxess said it expects EBITDA pre-exceptionals to rise by 15% to €200 million in the first quarter despite a continued "difficult competitive environment."
This compares with a result of €174 million for the 2013 quarter, which the company said was "burdened by several factors including start-up costs."
The former Bayer chemicals business said Q1 earnings will be impacted by the effects of a strike at its Zwijndrecht, Belgium, plant, where butyl rubber production has been at a standstill for around three weeks. However, it expects the absence of major one-off costs to help lift 2014 underlying EBITDA slightly, even if prices remain low.
Lanxess also confirmed its preliminary figures for 2013 published on Feb. 26. EBITDA pre-exceptionals plunged by 40 % to €735 million year on sales down 9% year-on-year to €8.3 billion, as writedowns had to be taken on the value of several of its businesses.
The downturn last year is attributed in particular to lower selling prices in the Performance Polymers business, reflecting uncompensated higher input costs for raw materials.
Turnover decreased in all regions in 2013, with revenues in Asia-Pacific falling by around 3%. In Europe, the Middle East and Asia - excluding Germany - revenue was down 5%, in Germany by around 8%. The plunge in Latin America was 19% and in the BRICS countries (Brazil, Russia, India, China and South Africa) by 7%.
On sales down 13% to €4.5 billion, EBITDA pre-exceptionals in the Performance Polymers business in 2013 was halved to €389 million, while Advanced Intermediates saw sales ease off slightly to €1.6 billion and EBITDA pre-exceptionals by 6% to €286 million. Performance Chemicals saw 3% lower sales at €2.1 billion while EBITDA pre-exceptionals fell by 18% to €231 million.
In its Advance efficiency program designed to save around €100 million annually, Lanxess said 730 employees have already accepted voluntary severance packages.
German media reports meanwhile say the company is embroiled in a dispute with former CEO Axel Heitmann, who resigned at the end of February. The disagreement is said to concern €6 million in compensation. Although lawyers for Heitmann said the executive had agreed to forego a severance package only under duress, the company maintains that this was not the case.
At stake, among other things, is compensation Heitmann is said to have requested for security measures at his private residence.
