Energy costs hit earnings at Arlanxeo

Cologne, Germany – Arlanxeo has posted a 3% fall in earnings (EBITDA pre exceptionals), to €92 million, on second quarter sales up 24.6% to €835 million, compared to the same period of last year.

The earnings decline at Lanxess' 50/50 synthetic rubber joint venture with Saudi Aramco was due in particular to higher energy costs, said a 10 Aug results statement from Lanxess.

This factor, said the German group, offset progress in passing on increased raw material costs. This left the earnings margin at Arlanxeo at 11.0%, compared to 14.2% a year earlier.

The performance contrasted with a 25% rise in earnings, to €367 million, across Lanxess, which also reported an almost 30% rise in sales to €2.5 billion in the second quarter.

The group-wide gains reflected the earnings contribution of newly acquired Chemtura businesses as well higher volumes and selling prices.

Overall, the Cologne-based group's EBITDA margin pre-exceptionals came in at 14.6%, slightly below the 15.1% reported in the prior-year period.

“The newly acquired Chemtura businesses are already making a significant earnings contribution, and the other areas of our speciality chemicals portfolio are also developing positively,” said Lanxess CEO Matthias Zachert.

“We are overall well on track and continue to expect record earnings for the full year,” he added. “However, compared with the very strong prior year, we are anticipating a slightly weakened momentum for the second half of 2017.”