• Q1 earnings reach EUR16.6m (US$18.6m)
  • Consolidated sales grow 5.1%
Lenzing launched a marketing drive for speciality fibres in 2014

Lenzing launched a marketing drive for speciality fibres in 2014

Austrian cellulosic fibre producer Lenzing more than doubled earnings in its first-quarter thanks to a marketing drive for speciality fibres and the benefits of its cost cutting programme.

Net profit in the three months to the end of March reached EUR16.6m (US$18.6m), climbing 115.3% on earnings of EUR7.7m in the prior year quarter.

In spite of the ongoing difficult market environment, an upgraded product mix, slightly higher fibre sales volumes and the improved cost situation, Lenzing said it was able to achieve an improvement in earnings.

Consolidated revenues totaled EUR474.6m, a rise of 5.1% from EUR451.7m in the prior year.

"The marketing drive for speciality fibres launched in 2014, especially for Tencel, has paid off," said CEO Peter Untersperger. "We successfully implemented initial price increases and significantly increased the share of speciality fibres in the product mix. Moreover, we laid the groundwork for generating further earnings improvements against the backdrop of an ongoing difficult market environment thanks to comprehensive structural and cost optimisation measures."

Untersperger added that t group's 'excelLENZ' cost savings initiative is proceeding according to plan and is expected to generate cost savings of up to EUR160m annually as of 2016.

Going forward, Lenzing said the viscose fibre market showed a "slight upward movement" at the beginning of the second quarter. However, the company said it remains to be seen whether this development is sustainable.

"Thanks to the ongoing high volume demand for its fibres, Lenzing continues to expect full utilisation of all its production capacities. Lenzing will strive to carry out selling price increases in the second quarter of 2015. Lenzing continues to expect an ongoing improvement in the product mix and a good development of operating results in both the textile and non-wovens segments for the rest of the year," it said.