Lanxess Sees Weak 2013
After announcing a weak first half of 2013, Germany's Lanxess said it doesn't expect to see an improvement in business conditions in the second half of the year. The company attributed this in part to customers destocking inventories, particularly in Asia, as well as to a weak consumer sentiment overall. As a result, the company has lowered its May outlook of €1 billion expected EBITDA pre exceptionals to €700-800 million, excluding potential inventory devaluations.
Meanwhile, it maintained its mid-term target of €1.8 billion euros EBITDA pre exceptionals in 2018 despite the difficult conditions.
"The first half of 2013 does not meet our own high standards," Lanxess CEO Axel Heitman said. "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."
For the second quarter, net income declined 95% to €9 million from €174 million in the prior year.
EBITDA before exceptionals declined 45% year-over-year to €198 million. Adjusted EBITDA margin fell to 9.2% from 14.9% last year.
Sales were down 11.7% to €2.14 billion from €2.42 billion a year ago, due to a strong decrease in selling prices triggered mainly by a decline in raw material prices, which impacted the company's Performance Polymers segment. The continuing weak demand in the automotive and tire industries also affected the sales development. This was partly offset by demand for agrochemicals, especially in Europe, which remained positive and contributed to the solid development of the Advanced Intermediates segment.
