• Net profit was down by one-third in the period. 
  • Group revenue decreased 6.1% to EUR550.3m in Q1.
  • Lenzing warned it expects its results for 2018 to be lower than the outstanding results in the last two years.
CEO Stefan Doboczky said the firm is pleased with the "solid" results given the more demanding market environment

CEO Stefan Doboczky said the firm is pleased with the "solid" results given the more demanding market environment

Austrian cellulosic fibre producer Lenzing expects its results for 2018 to be lower than those achieved in the previous two years as both earnings and revenue fell in the first quarter against the backdrop of a challenging market environment for standard viscose combined with currency headwinds.

Net profit for the first quarter of 2018 fell to EUR50m (US$59.9m), a decline of 33.3% from EUR75m in the year-ago period. Earnings per share equalled EUR1.89, compared to EUR2.75 in the year-ago period.

Group EBITDA, meanwhile, slipped 24.8% to EUR101.6m mainly due to softening prices for commodity viscose and increasing costs for key raw materials. As a result, EBITDA margin narrowed to 18.5% from 23% in the period.

Meanwhile, group revenue decreased by 6.1% from EUR586.2m in the prior-year to EUR550.3m, mainly due to to less favourable currency exchange rates.

"Following the record year of 2017, Lenzing began the expected challenging 2018 financial year with a decline in revenue and earnings. Market headwinds were clearly noticeable in the first quarter but still we are pleased with the solid results given the more demanding market environment," said CEO Stefan Doboczky.

He added the firm continues to forge ahead with the implementation of its sCore Ten corporate strategy, while the expansion of production capacities for its speciality fibres is also progressing.

"We are convinced of the merits of our chosen strategy, which will help us to be more resilient in the upcoming quarters," he said.

Looking ahead, Lenzing warned it expects its results for 2018 to be lower than the outstanding results in the last two years, as anticipated exchange rate fluctuations and limited visibility over fibre prices in the year ahead are expected to take their toll.

"These general conditions are expected to form the basis for a challenging market environment in the commodity viscose fibre business during the coming quarters," the firm said.