07 August 2012 10:35 [Source: ICIS news]
(adds outlook and segment earnings)
LONDON (ICIS)--German specialty chemicals maker LANXESS on Tuesday said it does not expect to see any further momentum in the second half of the year in view of increasing economic challenges.
The company continues to predict weak economic development in Europe as a result of the euro debt crisis, while it anticipates moderate economic growth in Asia and Latin America, and continued expansion in the ?xml:namespace>
Raw material and energy costs are expected to remain volatile in the second half of the year.
LANXESS said it expects the earnings before interest, tax, depreciation and amortisation (EBITDA) contributions of the first half of the year in relation to the second half in a ratio of 60:40.
“We therefore expect the operating result in the second half of 2012 to be approximately at the prior-year level,” said CEO Axel Heitmann.
For the whole 2012, the company confirmed it expects its EBITDA pre-exceptionals to grow by 5–10%, said Heitmann.
In addition, on the back of strategic investment projects in growth markets in the first half of the year, the company has now forecast that its capital expenditures in 2012 will be €650m–700m ($802m–864m), compared with €600m originally planned.
“Our performance is reflected against a very strong previous year and we are on the way to achieving an even better result in 2012 after our strong second quarter,” said Heitmann.
The company's second-quarter net profit fell by 2.8% year on year to €176m, weighed down by exceptional charges from reorganisation at its Performance Chemicals segment.
Its group sales increased by 8.1% year on year to €2.42bn in the second quarter, “mainly as a result of currency effects and selling price increases”, it said.
“Raw material cost increases were fully passed on to the market in all segments,” added LANXESS.
The firm’s EBITDA pre-exceptionals rose by 6.8% year on year to €362m during the same period, said the company.
The company’s Performance Polymers segment registered a year-on-year sales increase of more than 11% in the second quarter of 2012, to €1.43bn, as rising raw material costs, especially for butadiene (BD) and isobutylene, were quickly passed on to the market through selling price increases. EBITDA pre-exceptionals for the segment rose by more than 12% to €257m.
Sales in the Advanced Intermediates segment edged up by 1% in the second quarter to €399m, supported by strong demand for agrochemicals despite weakness in the construction and coatings industries. The segment’s EBITDA pre-exceptionals grew by 22% year on year to €79m.
The Performance Chemicals segment’s sales rose by more than 4% against the same period last year, to €585m, LANXESS said. However, EBITDA pre-exceptionals fell by nearly 18% to €78m following a “decline in orders from the construction and electrical/electronics industries, as well as by maintenance shutdowns in a number of business units”.
($1 = €0.81)
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