Lenzing records downward trend in first half-year results

Tech Textiles & Nonwovens

Lenzing records downward trend in first half-year results

The Lenzing Group, one of the leading suppliers of man-made cellulose fibers witnessed a downward price development on the marketplace in the first half year of 2013.

In the first six months of 2013, the market was characterized by ongoing high inventories of cotton and surplus production capacities for viscose fibers in China, the most important sales market, and thus globally declining prices for man-made cellulose fibers. The average fiber selling prices of the Lenzing Group totaled EUR 1.76/kg

Lenzing achieved a new record level of fiber sales, which amounted to 438,000 tons in the first half of 2013. However, the price development for viscose fibers was less favorable than previously expected. The global nonwovens fiber market developed robustly in the first half of 2013 against the backdrop of very good volume demand. However, the declining textile fiber selling prices also led to some price pressure in the nonwovens sector, even if this was to a moderate extent.

Nevertheless, against the backdrop of declining sales, Lenzing generated earnings in line with expectations but considerably below the first half of 2012.The comparability of the performance indicators in the first half of 2013 with those in the prior-year period is limited due to Lenzing’s sale of its Business Unit Plastics (Lenzing Plastics).

Q2 2013 earnings in line with expectations

For the Lenzing Group, the second quarter of 2013 developed for the most part in line with expectations. Consolidated second-quarter sales totaled EUR 493.3 million, down 7.6% from the prior-year level of EUR 533.6 million. Amongst other things, this decline reflects the further drop in average fiber selling prices to EUR 1.75 per kilogram.

Lenzing is adjusting its short-term and medium-term corporate strategy to market conditions prevailing at the present time. The company is revising its performance indicators for the entire year 2013 as a result of the sale of the Business Unit Plastics as of the end of June 2013. In the second half of 2013, Lenzing will implement intensive marketing and sales efforts to promote its specialty fibers Lenzing Modal® and TENCEL® in order to stabilize the business.

The company will adjust its investment policy to revenue and counteract market developments on the basis of further internal optimization measures. Lenzing will place additional emphasis on enhancing innovation and intensifying its marketing and sales efforts on behalf of the specialty fibers Lenzing Modal® and TENCEL® as well as nonwovens.