Lanxess Q1 earnings slide 12%

Company plans more temporary facility shutdowns and is reducing its capital expenditure budget for 2013 to €600m

Specialty chemicals company Lanxess has reported a 12% slide in year on year first quarter 2013 earnings to €2.1bn, due to lower volumes and fallen selling prices. EBITDA pre exceptionals likewise suffered, moving back by 53% against the first quarter of 2012 to €174m. The worst performing business segment was performance polymers, which saw sales move back by 18%, partly a result of lower raw materials prices and partly on account of lower demand from the automotive industry.

On a more positive note, Lanxess’ agrochemicals business, which saw sales edge up 1%, and stable sales in the Asia Pacific region, which accounted for 25% of the group’s sales, were cited as stabilising factors.

“We are not immune to a sharp drop in demand, but we are responding to it proactively as always,” said Lanxess’ Chairman of the Board of Management Axel C Heitmann. The company has already initiated temporary facility shutdowns in the performance polymers segment in line with its policy of flexible asset and cost management and additional measures are planned in the performance chemicals segment.

“These measures are not merely designed to achieve short term savings,” added Heitmann. “We aim to raise the competitiveness of our international sites in this segment [performance chemicals] for the medium and long term.”

In addition, Lanxess is reducing its capital expenditure budget for 2013 to €600m from the previously planned level of between €650m and €700m.