• 9-month profit slumps 32.6% to EUR44.3m
  • Sales down 6.2% to EUR1.36bn 
  • Further cost reductions planned
Lenzing says further cost reductions are planned

Lenzing says further cost reductions are planned

Austrian cellulosic fibre producer Lenzing Group posted a significant decline in net profit for the first nine months of 2014, due to lower average selling prices.

During the period, the company's profit amounted to EUR44.3m (US$55m), down from EUR65.7m last year. Sales fell 6.2% to EUR1.36bn from EUR1.45bn a year ago, while like-for-like sales were down by 2.8%.

A 7% rise in fibre sales volumes to 706,900 tonnes failed to offset a decline in average fibre selling prices to EUR1.55 per kg from EUR1.73 last year.

But, the company noted that cost savings are having a positive impact. It added that further cost reductions are planned in light of the fact that no significant impetus is expected from the market.

Of the EUR90m worth of savings expected for this year, one quarter involves personnel expenses, while the rest relate to reducing material costs and savings derived from projects to cut general and administrative expenses.

"Planning work has begun to enable a further improvement of the Lenzing Group's cost structure to be achieved in 2015," said CEO Peter Untersperger.

"Starting in 2016 we will achieve sustainable cost reductions of over EUR160m per annum. These measures are designed to safeguard the long-term competitive strength of the company and its self-financing capacity for future investments."