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June 01, 2018 12:00 AM

Arlanxeo 'could see' second-half recovery

Patrick Raleigh
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    Cologne, Germany – First quarter sales at Arlanxeo – the synthetic rubber JV between Lanxess and Saudi Aramco – fell 20.1% year-on-year to €757 million, while earnings (EBITDA pre exceptionals) came in 22.9% lower at €111 million.

    The sales-decline, however, reflected a very strong first quarter in 2017 while the lower earnings were “largely as a result of adverse currency effects,” Lanxess reported 8 May.

    “Over successive quarters [since Q1/17] the volatility of commodity prices pulled results down,” said Lanxess chairman Matthias Zachert. “This year we expect the complete opposite effect.”

    Arlanxeo, explained Zachert, had started “modestly” this year but is expected to show a significant improvement over the second half of this year.

    “We had a decline in earnings as well, [but] we expect a reversal in this trend, as well, over the course of the year,” he said in a results conference call

    Lanxess’ boss went on to forecast earnings for this year would be similar to the last two years – between €360-380 million. But, he added, “we are not giving any firm guidance for Arlanxeo: rubber is too volatile.”

    Lanxess will report Arlanxeo separately from the rest of its polymers and chemicals business in the second quarter onwards. It will stop providing sales and earnings for rubber JV from the first quarter of 2019.

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