LENZING – Austrian speciality fibre maker, Lenzing, has announced a 22.4 per cent decline in revenues for 2020 to €1.63bn amid pressure on prices and volumes in the textile industry created by the coronavirus pandemic. Losses were largest in the second quarter of the year and these were only partially offset by a recovery in the second half of 2020. The company saw a net loss of €10.6m for 2020 but is cautiously optimistic about 2021, albeit the company notes there is still a high level of uncertainty in the market due to the pandemic.
Stefan Doboczky, CEO of the Lenzing Group said: “2020 was largely dominated by the COVID-19 pandemic, also at Lenzing. Lenzing responded quickly and with determination to the increased pressure on prices and volumes. In the second half of the year, we saw a broad recovery of the fibre market; in particular, demand for our sustainably produced specialty fibers increased significantly.
“Strategically, we remain fully on track and the implementation of our key projects in Brazil and Thailand continues to proceed according to plan. With our corporate priorities, we are consistently pursuing a major goal, namely to make a zero-carbon future come true.”
Lenzing continues to invest heavily in the growing man-made fibres sector. CAPEX (expenditures for intangible assets, property, plant and equipment and biological assets) nearly tripled to €668.8m in 2020. This increase is a consequence of the implementation of major projects in Brazil and Thailand. The Lenzing Group’s investment activities continued to focus on expanding the internal production of pulp, increasing the share of specialty fibres and implementing the climate targets.
The construction of a major dissolving wood pulp plant in Brazil continues to progress according to plan, the business said. After the final investment decision in December 2019, the Duratex Group acquired a 49 per cent share in the joint venture LD Celulose in the first quarter of the reporting year. Lenzing holds 51 per cent of the shares. The expected Industrial CAPEX will be US$1.38bn in a project predominantly financed through equity and long-term debt. The corresponding financing contracts were concluded in the second quarter of 2020 as planned and the commissioning of the pulp plant is scheduled for the first half of 2022.
Lenzing placed a bonded loan bound to its sustainability performance in 2019 in order finance further operational growth. In November 2020, the business successfully issued a subordinated hybrid bond with a total volume of €500m, which is classified as equity in accordance with IFRS. The bond was oversubscribed multiple times and has a perpetual tenor and an annual coupon of 5.75 per cent.