Lanxess posts record Q2 with €53m net profit

13 August 2008 08:22  [Source: ICIS news]

SINGAPORE (ICIS news)--Germany’s Lanxess reported record year-on-year net profits for its second quarter of €53m ($35.5m) against a loss of €59m in the previous corresponding period, the company said on Wednesday.

Chairman Axel Heitmann attributed the turnaround to the corporation’s focus on high-performance, innovative products and to the divestment of highly cyclical businesses as part of its systematic portfolio management.

The company’s revenue stayed largely flat at €1.77bn compared with €1.73bn in the year-earlier period, although after adjustments for portfolio changes and negative currency effects operational sales grew 14%.

The company’s net €59m loss for the prior year period was largely due to the divestment of the Lustran Polymers business unit.

“Lanxess generated very good earnings in the second quarter of 2008 and resolutely maintained its course of profitable expansion,” said Heitmann.

The largest contributor to earnings was from the performance polymers segment which saw segment sales climbing over 35% to €908m from €671m a year before.

Sales from advanced intermediates grew 10% to €320m from €291m while revenue from the performance chemicals arm stayed flat at €523m.

The company also announced plans to move its group headquarters from Leverkusen to Cologne that is expected to be completed by 2011.

“In recent years, Cologne has seen impressive development as a centre of commerce,” said Heitmann. "The city has an infrastructure which is unique in north Rhine-Westphalia and optimal transport connections."

Lanxess management said global economic growth would continue to slow for the rest of the year with the North American construction and automotive sector driving the slump.

However, rapid growth from the Asia Pacific, central and eastern European and Latin American regions are expected to cushion the slowdown.

Lanxess expects operational sales growth for the full year of 2008 and estimates that its pre-exceptional earnings before interest, tax, depreciation and amortisation (EBITDA) to come in at €700m due to favourable conditions for the global chemical industry.

($1 = €0.67)

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Author: Bohan Loh
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