22 March 2012 15:57 [Source: ICIS news]
(updates throughout with company outlook, CEO comments and share price)
LONDON (ICIS)--LANXESS reported on Thursday a drop in net income for the fourth quarter of 2011, but expects strong growth in 2012 through strong demand and higher sales.
German specialty chemicals maker LANXESS said its net income for the fourth quarter of 2011 slumped to €5m ($6.58m) from €26m in the same period a year earlier, following charges of about €20m for the realignment for its pharmaceutical business.
The company’s overall sales rose by 16% year on year to €2.12bn in the October to December period, it said.
For the fourth quarter of 2011, the company’s pre-exceptional earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 1.2% year on year to €174m, it added.
Earnings for the fourth quarter were hit by maintenance shutdowns at synthetic rubber production facilities, inventory write-downs of €35m linked to raw material prices and destocking by customers, it said.
For the full fiscal year 2011, net income increased by 33.5% year on year to €506m, while sales rose by 23.2% to €8.78bn on the back of strong business developments in emerging markets, LANXESS said.
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“LANXESS achieved its highest regional sales of €2.5bn in the EMEA (Europe, Middle East, Africa) region [which excludes
The company’s performance polymers business segment’s sales in 2011 grew by 37% to €5.1bn, while pre-exceptionals EBITDA climbed by 40% to €768m, it said.
While sales in the advanced intermediates segment rose by 9.5% to €1.5bn on strong demand for agrochemicals, pre-exceptionals EBITDA rose by 2% to €264m, it said.
LANXESS’s performance chemicals business unit’s sales grew by 7.7% to €2.1bn, while pre-exceptionals EBITDA rose by 3% year on year to €289m, it added.
The company’s overall pre-exceptionals EBITDA increased by 24.8% year on year to €1.14bn, it said.
For the first quarter of 2012, the company expects to post pre-exceptionals EBITDA of between €330m and €350m, it said.
“We are on course for further growth and well on the way to achieving our medium-term earnings target of €1.4bn in 2015,” said LANXESS CEO Axel Heitmann.
Heitmann added that research and development (R&D) will be a key investment to drive the company’s growth.
“A company’s long-term success is not only determined by investment in plants or property. Particularly for a technology-driven company like LANXESS, the topic of research and development also plays an important role,” he said.
LANXESS raised R&D spending in 2011 by 24% to €144m and will increase investment this year.
“We have increased our investment in research and development every year so far. And 2012 will be no exception in this respect. Our R&D budget is nearly 40% above last year,” Heitmann said.
The CEO said he expects the company to continue achieving profitable growth, although a number of uncertainties remain.
He added that public debt levels in the eurozone and the
Looking at 2012 so far, Heitmann said LANXESS made a promising start and he expects pre-exceptional EBITDA in the first quarter to exceed the same quarter of 2011.
“We are confident for the full year 2012 and anticipate solid business development. The gratifying trend in demand from the automotive and tyre industries will undoubtedly contribute to this,” he added.
At 17.05 GMT, LANXESS’ shares were up 8.48% from the previous close on
($1 = €0.76)Additional reporting by Samuel Wong
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