Lanxess reports loss in Q3 on exceptionals

Leverkusen, Germany - Lanxess' Q3 results benefited from the implementation of previously announced restructuring measures, supported by strong growth in the chemical industry as a whole, but the company still reported increased losses compared with a year ago, due to restructuring charges.

The company's operating result before depreciation and amortisation (EBITDA) and pre exceptionals improved by 41 percent from the same period of the previous year to Euro 148 million (2004: Euro 105 million). Sales increased fractionally to Euro 1776 million (2004: Euro 1764 million). Net financial debt shrank to Euro 811 million, from Euro 1250 million on June 30, 2005, and by 28.5 percent compared to December 31, 2004.

Management Board Chairman Axel Heitmann commented, We now expect that EBITDA pre exceptionals will increase to between Euro 560 million and Euro 580 million for the full year 2005.” The EBITDA margin pre exceptionals rose by 2.3 points to 8.3 percent in the third quarter of 2005. The Euro 142 million in exceptional charges to the operating result (EBIT) included Euro 132 million in restructuring expenses.

As previously indicated, the majority of the planned expenses in 2005 were already booked by the third quarter,” Heitmann said. The company made a loss (EBIT) of Euro 54 million in the period (2004: losses of Euro 4 million).

Heitmann added, "Negotiations with the French unions have cleared the way for savings of EUR 11 million annually at the La Wantzenau site starting in 2006, where 83 positions will be eliminated in a socially responsible manner." Lanxess makes nitrile rubber at Le Wantzenau.

Heitmann continued, "Sales in the Performance Rubber segment in the third quarter of 2005 rose by a strong 17.6 percent to Euro 414 million. This expansion was mainly due to the price increases implemented to pass on the higher costs of energy and raw materials, which boosted sales by 22.5 percent. Volumes were down by 6 percent compared with third quarter of 2004, when business with rubber was unusually brisk for the time of year. The decrease thus was not due to a general decline in demand, but to the company's price before volume” strategy, the baseline effect of the high prior-year figure, and scheduled plant shutdowns. EBITDA pre exceptionals rose by Euro 6 million to Euro 39 million despite higher energy and raw material costs. The EBITDA margin pre exceptionals was virtually unchanged from the same period of 2004, at 9.4 percent."