UpdateGermany’s LANXESS Q1 net profit up 16% on higher prices

09 May 2012 10:21  [Source: ICIS news]

LONDON (ICIS)--LANXESS saw its net profit in the first-quarter of 2012 grow 16.3% year on year to €193m ($251m), as the company managed to pass higher raw material prices along to the market, the Germany-based chemical company said on Wednesday.

First-quarter sales rose 15.2% to €2.39bn compared with the same period the year before.

LANXESS said that sales in the first quarter were influenced by an 8.8% year-on-year rise in selling prices across the group, which offset a 3.1% fall in volumes. In addition, positive currency effects of 2.4% supported sales.

Sales in Germany rose 4.5% year on year to €416m in the first quarter and represented 17.4% of LANXESS’ total group sales.

The company added that sales in North America were up 29.0% year on year to €423m, representing 18% of group sales, while Asia-Pacific increased sales by 19.1% year on year to €549m in the first quarter, representing 23% of total sales, with China and Thailand showing the strongest growth.

Latin America increased sales by 23.4% year on year to €301m in the first quarter thanks to the company’s strong foothold in Brazil, LANXESS said. The region represented 12.6% of group sales.

The specialty chemicals group’s total earnings before interest, taxes, depreciation and amortisation (EBITDA) pre-exceptionals for the period grew 14.6% year on year to €369m.

The EBITDA pre-exceptionals margin remained unchanged at 15.5% compared with the first quarter of 2011.

“In view of our very good start to the year, we expect EBITDA pre-exceptionals to increase 5-10 % year on year in 2012 [from €1.15bn in 2011],” said Axel Heitmann, LANXESS’ chairman.

“Our confidence is based on our strategic focus on premium products and innovative technologies, which serve the megatrends and emerging markets,” he added.

On a segment basis, sales in LANXESS’ Performance Polymers business in the first quarter rose 28.3% year on year to €1.39bn, mainly because of higher prices. EBITDA pre-exceptionals also rose 28.1% to €255m during the same period. The group said there was still strong demand for its high-performance synthetic rubbers and high-tech plastics from the tire and automotive industries respectively.

First-quarter sales in the Advanced Intermediates segment rose 3.1% year on year to €429m on the back of strong demand from the agrochemical industry. However, EBITDA pre-exceptionals fell 6.7% year on year to €70m because of weaker demand in the construction, coatings and pharmaceutical industries.

LANXESS’ Performance Chemicals segment sales were nearly the same as in the first quarter of 2011 at €558m, with contributions from newly acquired businesses helping to offset volume declines. EBITDA pre-exceptionals in the segment fell 7.8% year on year to €83m mainly because of weaker demand in the construction and electronic industries.

Looking ahead, Heitmann said the company had created a good basis to continue on successful growth in 2012. However, he added that LANXESS still expects that the high levels of sovereign debt in some established countries could detract from steady economic development, while currency exchange rates, as well as raw material and energy costs, will remain volatile.

“Furthermore, LANXESS is bringing on stream new capacities in all three segments. We will also sharpen our focus on innovation and the latest technologies in order to develop premium products for our customers,” added Heitmann.

($1 = €0.77)

By: Franco Capaldo
+44 (0)20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly