Bloomberg News

Lenzing Falls Most in 10 Months After Forecasts Below Estimates

March 22, 2013

Lenzing AG (LNZ), an Austrian maker of cellulose fibers, fell the most in 10 months after the company said growth will slow and its outlook was less than estimated.

Earnings before interest and tax this year will range between 140 million euros ($181 million) and 170 million euros, the Lenzing, Austria-based company said today. Analysts had expected Ebit of 205 million euros, according to data compiled by Bloomberg. Lenzing shares fell as much as 6 percent, the biggest intraday drop since May 14.

“It’s time to adjust our growth rate to the environment,” said Thomas Winkler, Lenzing’s chief financial officer, at a press conference in Vienna. Visibility into the fiber market remains low, he said.

Profit margins of Lenzing’s wood fibers, which are linked to the price of cotton, contracted in 2012. Cotton spot prices ended last year 12 percent below their peak price, according to data compiled by Bloomberg.

“The cotton price is very volatile,” Chief Executive Officer Peter Untersperger said, adding that China has collected a large stockpile of the material. “That confuses the market.”

Lenzing shares were down 4.9 percent at 68.01 euros as of 2:27 p.m. in Vienna. It was today’s worst performance on the 39- member Bloomberg EMEA Chemicals Index. (BEUCHEM)

Full-year net income attributable to shareholders fell 32 percent to 175.6 million euros. Revenue dipped to 2.09 billion euros from 2.14 billion euros.

The drop in margins forecast by Lenzing is considerable, said Bernhard Selinger, a Vienna-based analyst at Raiffeisen Centrobank, via telephone. The company may be exercising caution with its forecasts to avoid revisions later in the year, he said.

Earnings before interest, tax, depreciation and amortization will be as much as 290 million euros while sales may reach 2.25 billion euros, the company said. Analysts expected 337.8 million euros Ebitda on 2.16 billion euros sales, according to data compiled by Bloomberg.

Lenzing also announced that it is evaluating offers to buy its plastics unit, which last year generated 109.4 million euros of sales, in order focus on its core fiber business.

To contact the reporter on this story: Alexander Weber in Vienna at aweber45@bloomberg.net

To contact the editor responsible for this story: Mariajose Vera at mvera1@bloomberg.net


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