21 February 2011 08:33 [Source: ICIS news]
SINGAPORE (ICIS)--Lenzing’s full-year 2010 net profit has more than doubled to €159.1m ($218m) from €64.4m in 2009, on the back of strong sales and higher prices of fibres, the Austrian producer said on Monday.
Sales for the full year rose by 45% year on year to €1.77bn, while group earnings before interest and tax (EBIT) more than doubled to €231.9m from €114.2m in 2009, the company said in a statement.
“The 2010 business year was not a one-off event, but the beginning of a long-term upward trend in the development of the man-made cellulose fibre business,” Lenzing CEO Peter Untersperger said in the statement.
“The reason for this is the increasing structural shortage of cotton in the global market, which leads textile manufacturers to increasingly turn to alternatives such as Lenzing fibres,” Untersperger added.
Lenzing’s fibres unit accounted for around 90% of the company’s consolidated sales in 2010, according to the statement.
The increase in its fibre sales prices in 2010 mainly reflected the strong demand and the physical shortage of cotton, which had started to become apparent towards the end of summer in 2010, the company said.
“Lenzing was able to take advantage of the upward trend in fibre prices to effect several price increases and thereby successfully offset rising raw material prices for wood, pulp and chemicals,” it added.
In its outlook, the firm said it expects sales to grow by 15–20% and to further improve EBIT margins this year.
“The upward trend in the global fibre market has continued during the first weeks of the current business year, against the background of an overall satisfactory global economic development,” the firm said.
“The increasing scarcity of cotton has led to new all-time high prices for cotton,” it added.
Lenzing has plans to increase its fibre production capacity from around 710,000 tonnes/year as of year-end 2010 to more than 1m tonnes/year by the end of 2014, mainly through expansion and modernisation investments, the company said.
($1 = €0.73)
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