Lenzing posts sluggish half-year growth

LENZING – Austrian speciality fibre maker, Lenzing Group, has reported disappointing growth figures for the first half of 2019, with revenues increasing by just 1.2 per cent to €1.2bn. Net profit for the period was down by a sizeable 15.9 per cent from €91.3m to €76.8m, while earnings per share amounted to €2.97 compared to €3.44 for the first half of 2018. The company said that historically low prices for standard viscose contributed to the underwhelming figures, although it claims that “ongoing high demand for sustainably produced specialty fibres and positive currency effects, the impact of low standard viscose prices was largely offset in earnings.”

Just recently, Lenzing announced plans to invest more than €1bn in new lyocell fibres production facilities globally, with the first expansion phase of 100,000 tons approved in Thailand.

The business has also recently partnered with Hong Kong-based tech firm TextileGenesis to use the company’s blockchain technology to incorporate traceability into its Tencel branded fibre business. TextileGenesis is run by former Lenzing global vice president business management textiles, Amit Gautam.

Attempting to put a positive gloss on the latest results, Stefan Doboczky, CEO of the Lenzing Group said: “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. 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.”

He added: “The escalating trade conflict between the largest economies confirm our decision to temporarily mothball the Mobile, Alabama project. Lenzing will continue to monitor these developments closely and review this decision on a regular basis.”