Austrian cellulosic fibre producer Lenzing has hailed a slight increase in revenue in the first half of 2019 and confirmed its outlook for the full year despite what it calls a “significantly more challenging” market environment with historically low prices for standard viscose.
In its trading statement today (7 August), the company reported a 1.3% rise in group revenue to EUR1.09bn (US$102bn). In addition to more favourable currency impacts, Lenzing said the rise was helped by a further optimisation of its product mix and higher prices for specialty fibres. The share of specialty fibres in revenue, at 48.4%, significantly exceeded the prior-year value of 44.1%.
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Net profit for the period, however, dropped 15.9% from EUR91.3m to EUR76.8m, while EBITDA margin declined from 18.1% in the first half of 2018 to 16.6% in the reporting period.
Meanwhile, Lenzing said the implementation of its sCore Ten strategy and its focus on specialty fibres continued to have a positive impact.
“Fully in line with our sCore Ten strategy, our specialty fibre business is developing very positively, which has made us significantly more resilient today than a few years back,” says CEO Stefan Doboczky. “The investment in new production capacities for lyocell fibres and the focus on our Tencel and Veocel product brands will make us even more resistant to market fluctuations and strengthen our position as a leading supplier of specialty fibres.”
The first phase of the growth is the construction of a state-of-the-art lyocell plant in Thailand, with the company last month saying it intends to invest more than EUR1bn in new lyocell fibre production facilities.
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By GlobalDataMeanwhile, Doboczky says the escalating trade conflict between the US and China support its decision in September of last year to temporarily mothball a project in Mobile, Alabama. “Lenzing will continue to monitor these developments closely and review this decision on a regular basis,” Doboczky adds.
Looking ahead, the Lenzing Group continues to expect its results for 2019 to be similar to 2018 based on current exchange rates. In March, the group reported net profit for the 2018 financial year of EUR148.2m, while EBITDA margin for the period came in at 17.6%. Group revenue for the year totalled EUR2.18bn.
