LANXESS continues to expect record earnings for 2017; reports Chemtura acquisition ‘delivers significant earnings’

PITTSBURGH, Pennsylvania — LANXESS, the company that recently acquired Great Lakes Chemtura in El Dorado, reported sales were up for the second quarter – almost 30 percent to 2.5 billion euros. They reported that the Chemtura acquisition “delivers significant earnings contribution.” (One euro equals 1.18 U.S. dollar).

The earnings before interest, taxes, depreciation and amortization (EBITDA) pre-exceptionals increased significantly by 25.3 percent to 367 million euros, according to a news release from LANXESS Corp. office in Philadelphia. They also reported the EBITDA margin pre-exceptionals at 14.6 percent. LANXESS is a specialty chemicals company based in Cologne, Germany.

Company officials said net income pre-exceptionals increased by 75 percent to 141 million euros and guidance for the full year 2017 confirmed: EBITDA pre-exceptionals between 1.225 billion euros and 1.3 billion euros.

“Following a good second quarter 2017, specialty chemicals company LANXESS continues to expect the highest earnings in the company’s history for the current financial year,” company officials reported.

Global sales of the company increased by almost 30 percent to 2.5 billion euros, up from 1.9 billion euros a year earlier. EBITDA pre-exceptionals improved by around 25 percent to 367 million euros, compared with 293 million euros in the prior-year quarter.

This increase was primarily due to the earnings contribution from the newly acquired Chemtura businesses as well as to higher volumes and selling prices. The EBITDA margin pre-exceptionals in the second quarter of 2017 stood at 14.6 percent, which was slightly below the high value of 15.1 percent reported in the prior-year period.

“Our growth strategy is paying off. Our strong operating performance and our profitable acquisitions are the basis for our strong results in the second quarter. The newly acquired Chemtura businesses are already making a significant earnings contribution, and the other areas of our specialty chemicals portfolio are also developing positively,” said Matthias Zachert, LANXESS chief executive officer.

Due to one-time exceptional charges, net income was 3 million euros, after 75 million euros in the prior-year quarter. The onetime effects resulted from the Chemtura acquisition and the planned closure of chrome chemicals production at the Zárate site in Argentina in the fourth quarter of 2017.

Adjusted for these effects, net income increased by around 75 percent to 141 million euros, compared with 80 million euros in the second quarter of 2016.

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

LANXESS continues to forecast EBITDA pre-exceptionals for the full year 2017 of between 1.225 billion euros and 1.3 billion euros. The company achieved its highest operating result to date in 2012, when it posted a figure of around 1.2 billion euros.

At the end of April, LANXESS completed the acquisition of U.S. chemical company Chemtura and subsequently adjusted its group structure. With immediate effect, LANXESS is reporting on five segments comprising a total of 12 business units.