Falling raw material prices and corresponding adjustments in selling prices also caused sales to shrink by almost 8 percent to 2.2 billion euros, the company announced in an interim report on tuesday. In a conference call, group CEO axel heitmann spoke of an "economic environment that has become significantly more difficult".
But in the medium to long term, the manager sees the dax-listed company, which was spun off from the bayer group in 2005, on a good course. Earnings before interest, taxes, depreciation and amortization (EBITDA) and before special items are expected to increase to 1.4 billion euros by 2014 and to 1.8 billion euros four years later. The group continues to focus its activities on the growth regions, particularly in asia.
Despite the weak economic environment, heitmann did not compromise on the targeted annual results either. EBITDA is expected to be at the lower end of the forecast of 5 to 10 percent above the previous year’s figure. From january to the end of september, the budget was 986 million euros, a good percent more than in the corresponding period of the previous year. With sales of 6.9 billion euros, net income for the first three quarters of 2012 decreased by 7.6 percent to 463 million euros.
On the stock exchange, the lanxess share lost considerable ground at the start of trading, but by the afternoon had almost completely recovered its losses. Lanxess was promoted to the top tier of the borsenliga only last september as the successor to the trading giant metro. In mid-september, the share price reached its all-time high of around 68 euros.
Meanwhile, heitmann sees rising energy costs as a massive threat to germany as a production location. Over the past few years, the company’s facilities have been made competitive, but now their competitiveness has been put under massive pressure by the high cost of energy, he said. However, germany is and remains an important domestic market and production location for the group. Lanxess is one of the privileged energy-intensive companies that, unlike end consumers, are exempt from the electricity surcharge and grid fees.