LENZING – Profits for Austrian wood-based fibre business, Lenzing, slid by 15.6 per cent in the third quarter of 2019. The business blamed a “challenging market,” and declining viscose prices, however, there will be some concerns given that the latest figures arrive on the back of a difficult first half of 2019 during which profits slumped by15.9 per cent from €91.3m to €76.8m. Overall revenues in the latest quarter also shrunk by 1.1 per cent to €1.62bn.
Lenzing’s latest financials show that, based on a further product mix optimisation and higher prices for specialty fibres, the decrease in revenue was partially offset. For instance, the share of specialty fibres in revenue, at 49.8 per cent, exceeded the prior-year value of 44.1 per cent. However, EBITDA (earnings before interest, tax, depreciation and amortization) dropped by 8.1 per cent to €266.9m, leading to a lower EBITDA margin of 16.5 per cent compared with 17.8 per cent in the first three quarters of the previous year. EBIT (earnings before interest and tax) fell by 19.3 per cent to €153.5m.
Said Stefan Doboczky, chief executive officer of the Lenzing Group, attempted to put a positive spin on the disappointing figures, saying: “Lenzing is very well positioned due to its strategic orientation and its strong focus on specialty fibre. This is reflected, more than ever, in the current market environment, which is marked by trade conflicts and historically low prices for standard viscose. This uncertainty can be felt throughout the textile value chain and leads to significantly more sluggish demand. Thanks to the performance of our specialty fibres, we have nevertheless been able to achieve a solid result.”
“While the profit situation of many companies in the textile value chain is challenging, we are still optimistic thanks to our specialty strategy and expect a satisfactory result for the full year.”