Lanxess specifies its earnings forecast for 2018

Lanxess specifies its earnings forecast for 2018
Following a good performance in the second quarter, specialty chemicals company Lanxess has specified its earnings forecast for 2018. The Group now expects an increase of the operating result at the upper end of the guidance of five to ten percent that was presented in May. In the previous year, comparable EBITDA pre exceptionals was around EUR 925 million. The contribution from Arlanxeo , the joint venture between Lanxess and Saudi Aramco for synthetic rubber, is not taken into account in the full-year forecast for 2018 and, with immediate effect, will no longer be reported in the Group’s sales and operating result.

In the second quarter, global sales of Lanxess increased by 6.8 percent to EUR 1.83 billion against EUR 1.71 billion in the prior-year quarter. EBITDA pre exceptionals improved by 3.6 percent to EUR 290 million compared with EUR 280 million in the prior-year quarter. The positive overall earnings performance was driven by three reasons primarily: firstly, the contribution of the former Chemtura businesses. They constitute a material part of the Specialty Additives segment, which recorded the best quarterly result since the acquisition of the U.S. company.

Secondly, the adjustment of selling prices due to higher raw material costs and thirdly, the synergies achieved from the integration of Chemtura had a positive impact on earnings. In the second quarter of 2018, the EBITDA margin pre exceptionals was still on a solid level, at 15.9 percent, despite significantly adverse currency effects, compared with 16.4 percent a year ago.

“Lanxess is doing well in operational terms and our strategic decisions in recent years are visibly paying off. For instance, the acquired Chemtura businesses, which have now been included in our figures for a year, made a decisive contribution to the record result achieved by our Additives segment in the second quarter,” said Matthias Zachert, Chairman of the Lanxess Board of Management.

“We are therefore specifying our full-year forecast and expect the increase of the EBITDA to be at the upper end of the guidance - despite the headwind resulting from the weakness of the US dollar and geopolitical uncertainties.”

Net income improved significantly to EUR 126 million against EUR 3 million in the prior-year quarter in which substantial exceptional charges were posted. Of net income, EUR 97 million was attributable to the four Lanxess segments and EUR 29 million to the so-called discontinued Arlanxeo business.