Lanxess raises forecast on strong Q3 earnings

ERJ staff report (DS)

Leverkusen, Germany -- Lanxess AG achieved a strong set of results in the third quarter of 2010 due to strong demand for its synthetic rubber and high-tech plastics. As a result, the company has once again lifted its earnings forecast for 2010. It now expects EBITDA pre exceptionals of roughly euro 900 million for the full year after previously forecasting roughly euro 800 million in August.

Sales of the Performance Polymers segment rose 50 percent year-on-year to euro 986 million in the third quarter, driven by price increases and strong demand notably in Latin America. The segment's EBITDA pre exceptionals jumped to euro 144 million from euro 76 million a year earlier, with all business units benefiting from buoyant demand in the tyre replacement and OEM automotive industries. This strong performance was achieved despite planned shutdowns for maintenance and expansion of plants.

Latin America recorded the strongest year-on-year growth in the third quarter, with sales rising 86 percent year-on-year to euro 271 million. This was driven primarily by the strong performance of the Performance Butadiene Rubber business unit in Brazil. The region represented 15 percent of group sales.

Sales in Asia-Pacific rose 21 percent year-on-year to euro 408 million and represented 22 percent of group sales. Lanxess said its synthetic rubber activities continued to perform at high levels in the region, driven by increased tyre production of Chinese manufacturers.

The EMEA (Europe, Middle East, Africa, excluding Germany) region increased top-line growth by 24 percent to euro 503 million driven by the Performance Polymers and Performance Chemicals segments. In particular, the synthetic rubber and high-tech plastics activities achieved significant double-digit sales increases.

As a result of the strong performance expected in 2010, the Board of Management has decided to make a one-off payment to employees totaling around euro 20 million. "Our employees worldwide have contributed part of their variable salary towards the cost savings in the crisis year 2009. It is only fair that we now thank them by making a one-time payment in return," said Heitmann.

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Press release from Lanxess