LENZING – Austrian speciality fibre business, Lenzing, saw revenues decline by 25.6 per cent from €1.09 bn to €810.2m in the first half of 2020. In addition to declining prices, Lenzing says it saw a significant decline in demand for textile fibres in all regions. “The slightly higher demand for fibres in the medical and hygiene segments reduced the losses, but could not offset them,” the company said in a statement.
It added: “The earnings development essentially reflects the decline in revenue. The implementation of measures for structural earnings improvements in all regions and making use of the short-time work model, which was temporarily introduced by the Austrian Federal Government, mitigated this negative effect.”
Stefan Doboczky, chief executive officer of the Lenzing Group said: “The COVID-19 crisis has an impact on the entire textile and apparel industry and further increased the price and volume pressure on the global fiber market. Likewise, Lenzing was also confronted with this historically difficult market environment and focused on the health and safety of their employees, the continuation of long-term partnerships and ensuring their sustainable business development.
“Strategically, we are still fully on track and the implementation of our key projects in Thailand and Brazil is progressing according to plan. The successful conclusion of the financing agreements for the construction of the pulp plant in Brazil was a highlight of the first half of the year.”
Lenxing’s CAPEX (expenditures for intangible assets and property, plant and equipment and biological assets) roughly tripled to €268.7m in the first half of 2020. This increase is a consequence of the progress of the major projects in Brazil and Thailand. The implementation of the two most important long-term investment projects to strengthen internal pulp supply and to increase the share of specialty fibres is progressing according to plan, according to Lenzing.
After the decision to build the dissolving wood pulp plant in Brazil with a capacity of 500,000 tons was made in December, the Duratex Group acquired a 49 per cent share in the joint venture LD Celulose as agreed in the first quarter of 2020. Lenzing holds 51 per cent of the shares. The expected Industrial CAPEX will be US$1.38bn. The project is predominantly financed through long-term debt.