Specialty chemicals company LANXESS expects earnings for the current fiscal year to increase between 10 and 20 percent – even though the results for the first quarter were still impacted by the weak global economic environment in the chemical industry.
In the first quarter, sales fell by 15.4 percent and reached EUR 1.607 billion compared to the comparatively strong same quarter of the previous year with EUR 1.899 billion. EBITDA pre exceptionals was at EUR 101 million and therefore 46.6 percent below the previous year's figure of EUR 189 million. The main reasons for the decline in earnings were lower sales prices and continued weak demand in numerous customer industries.
However, compared to the fourth quarter of 2023, there are signs of a slight upward trend – mainly due to an increase in volumes sold. Compared to the previous quarter, sales rose by 11.9 percent from EUR 1.436 billion to EUR 1.607 billion, while EBITDA pre exceptionals increased by 4.1 percent to EUR 101 million compared to EUR 97 million in the fourth quarter of 2023. The Advanced Intermediates (+54%) and Specialty Additives (+17%) segments recorded particularly strong growth in EBITDA pre exceptionals.
“It seems that we have touched the economic bottom in the chemical industry. At the same time, our FORWARD! action plan is having a positive impact with initial structural savings,” said Matthias Zachert, CEO of LANXESS AG. “We expect the positive trend to continue in the second quarter and that we will achieve better results for the year as a whole than in 2023. However, it is clearly too early to sound the all-clear. Global demand has not yet returned to normal levels and therefore 2024 will certainly remain a tense year for the chemical industry.”
Despite an economic environment that continues to be characterized by many uncertainties, LANXESS anticipates a slight upturn in demand over the remainder of the year. The Group also expects higher capacity utilization and an improved cost base as a result of the structural measures in its FORWARD! action plan. For the full year 2024, the Group is therefore expecting an increase in EBITDA pre exceptionals of 10 to 20 percent compared to the previous year's figure of EUR 512 million. LANXESS expects a sequential increase in EBITDA pre exceptionals for the second and third quarter of 2024 and a more subdued development in the fourth quarter due to the normal seasonal pattern.