Lanxess Q2 EBIT up, narrows 2007 EBITDA forecast

SINGAPORE (ICIS news)--Lanxess on Thursday reported a 9.4% year-on-year rise in second quarter operating profit on improved efficiency and decreased selling expenses but lowered its full year forecast.

The German chemicals major company said its 2007 forecast earnings before interest, taxes, depreciation and amortisation (EBITDA) would increase by up to 6.7% to €700m-720m ($945.9m-973m) - slightly lower than the medium to high single-digit percentage growth forecasted earlier.

The forecast was lowered as the company expects a slight slowdown in the US’ economic growth.

In the second quarter, the company’s EBIT pre exceptionals increased to €151m as EBITDA margins improved 0.7 percentage points to 12.2%.

"We have thus come another step closer to our goal of reaching the profitability level of our competitors," Lanxess’ CEO Axel Heitmann said.

Sales in the second quarter fell 1.4% to €1.7bn compared with the same period a year ago due to portfolio changes and negative currency effects, the company said.

Lanxess also incurred exceptional charges of €186m in the second quarter due to the sale of a majority stake in its Lustran Polymers business unit.

In the performance rubber segment, EBITDA in the second quarter grew by 4.8% to €65m, while the margin edged up slightly to 13.9%, hit by sharp increases in raw material costs. Sales rose 4.2% to €467m.

Second quarter EBITDA for its engineering plastics segment increased 5.9% to €36m while the margin improved by 0.4 percentage points to 8.4%. Sales rose 0.5% to €427m.

In the chemical intermediates segment, sales increased 1.8 % to €401m and EBITDA advanced 1.3% to €76m.

Second quarter revenue in the performance chemicals segment shrank 10.1% to €410m on currency effects and the sale of its textile processing chemicals business unit. EBITDA fell 10% to €63m.

($1=€0.74)

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