Lanxess Posts Substantially Better Q4 2012 Earnings
The specialty chemicals company Lanxess has achieved substantially higher earnings in the fourth quarter of 2012 compared to the same quarter in 2011, despite soft underlying demand.
Lanxess increased EBITDA pre exceptionals by 37% year-on-year to €239 million from €174 million a year ago. Fourth quarter sales were flat year-on-year at €2,123 million and net income increased to €51 million from €5 million a year earlier. Earnings per share (EPS) grew to €0.62 compared to €0.06 a year earlier.
The main factors supporting this result were the company's strict cost discipline and proven flexible asset management. In addition, the fourth quarter of 2011 included €35 million in charges for inventory devaluations.
As a result, Lanxess achieved an EBITDA pre exceptionals of €1,225 million in the business year 2012. This was an increase of 7% compared to 2011 and the company achieved its full-year guidance of 5-10% earnings growth. 2012 sales increased by 4% year-on-year to €9,094 million, net income increased by 2% to €514 million and EPS rose 2% to €6.18.
Soft underlying demand in the second half of 2012 has continued into 2013 across most businesses, against the usual seasonal trend. In order to counter the current soft demand, the company is applying its proven flexible asset management strategy. Therefore, Lanxess plans to temporarily shut down its butyl rubber plant in Belgium and its EPDM-production in Texas, USA, in the coming weeks.
However, Lanxess expects demand to pick up during the year and is strategically well positioned to benefit from the expected recovery in the global economic development.
Lanxess remains confident to achieve its mid-term earnings goals of €1.4 billion and €1.8 billion EBITDA pre exceptionals in 2014 and 2018 respectively.
Lanxess will publish its full-year earnings for 2012 at its annual press conference in Dusseldorf on March 21, 2013. All numbers in this release are preliminary and unaudited.