MOSCOW (MRC) -- Following a strong second quarter, specialty chemicals company Lanxess again raised its guidance for the full year 2015, said the producer on its site.
The company now expects to achieve EBITDA pre exceptionals within a corridor of EUR 840 million and EUR 880 million. It had previously assumed that EBITDA pre exceptionals for the full year would come in at between EUR 820 million and EUR 860 million.
"Lanxess is returning more and more to the right course. In the second quarter of this year, we posted a very good operating result to which all segments of our company contributed," said Matthias Zachert, Chairman of the Board of Management of Lanxess. "On the basis of these strong figures and the rapid implementation of our realignment program, we assume that our annual result will be higher than previously anticipated."
Sales improved by 4.3 percent in the second quarter of 2015 to EUR 2.1 billion, compared with EUR 2.0 billion in the prior-year quarter. Higher volumes and positive currency effects more than offset the raw material induced lower selling prices. EBITDA pre exceptionals increased by 13 percent from EUR 239 million to EUR 270 million. This development was driven by increased volumes, savings generated by the realignment, and positive currency effects due to the strong U.S. dollar. The EBITDA margin pre exceptionals rose accordingly to 12.8 percent, against 11.8 percent in the prior-year quarter.
Net income improved by a substantial 58.2 percent to EUR 87 million from EUR 55 million a year earlier. Operational development and proceeds from the sale of noncurrent assets contributed to this increase.
At around EUR 1.4 billion, net financial liabilities were almost at the same level as at the end of 2014. Following the completion of major projects in Asia, capital expenditures declined by more than half in the second quarter against the prior-year quarter from EUR 154 million to EUR 73 million. "The financial consolidation measures we have implemented as part of our realignment process are taking effect," said Lanxess CFO Michael Pontzen. "This development was recently rewarded by the rating agencies Moody's and Standard & Poor's when both confirmed our investment-grade rating with stable outlook."
Higher volumes, positive currency effects and raw material induced lower prices characterized business development in the Performance Polymers segment and resulted overall in sales of around EUR 1.1 billion. This represents an increase of 3.5 percent against the prior-year figure of around EUR 1 billion. EBITDA pre exceptionals for this segment climbed by 22.1 percent to EUR 149 million, compared with EUR 122 million in the second quarter of 2014.
The three-phase realignment program initiated by Lanxess last year continues to progress on schedule. The company has already successfully implemented the first phase. Measures of the second phase, aimed at improving operational competitiveness, have also been initiated. They include the reorganization of the production networks for its rubber types EPDM (ethylene propylene diene monomer) and Nd-PBR (neodymium-based performance butadiene rubber).
The third phase of the program is focused on improving the competitiveness of the business portfolio, especially through potential alliances in the rubber business. "In this connection, we are currently engaged in very constructive discussions and assume that we will achieve concrete results in the course of the second half of the year," said Zachert.
As MRC reported earlier, the new Rhein Chemie Additives business unit of specialty chemicals company Lanxess has developed innovative halogen-free flame retardants that are based in part on a newly developed type of phosphorus chemistry. These are characterized by low fogging and scorching, making them ideal for use in the furniture and automotive industries.
Lanxess is a leading specialty chemicals company with sales of EUR 8.0 billion in 2014 and about 16,600 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC