Lanxess gets boost from disinfectants, but revenues still drop
Specialty chemicals-maker Lanxess got a bump in the first quarter from sales of disinfectant products used to combat COVID19, but its overall revenues slipped because of declines in its other markets.
The Germany-based firm, with North American headquarters in Findlay, said it expects the global pandemic to have more negative impacts on its business in the second and third quarters. It lowered its earnings guidance for the full year.
“We know that we have not yet reached the peak of the crisis,” said Matthias Zachert, Lanxess’ chairman.
Lanxess in February boosted production of Rely+On Virkon, used to clean hard surfaces and equipment, after it was found effective in reducing contamination by the coronavirus.
The company has since donated the product in several countries.
Sales in the disinfectant products division weren’t enough to outstrip losses elsewhere. Lanxess’ saw declines in sales of its materials used by automakers and chemicals used in other industries, particularly in Asia, where many factories were shut down for part of the first quarter.
Global sales totaled 1.7 billion euros ($1.8 billion), down 2% from the first quarter of 2019.
Net income fell nearly 28% to 63 million euros.
Earnings before interest, tax, depreciation and amortization (EBITDA) excluding exceptional items came in at 245 million euros, down 10% from a year ago.
The company said it lowered its full-year EBITDA forecast to 800 million-900 million euros, compared to a March forecast of 900 million-1 billion euros.
Also in response to a downturn brought on by the pandemic, bonuses for top executives will be reduced by 25% to 50% and compensation for board members will be cut by 20%.
The company has about 350 employees in the Pittsburgh region, including the Findlay headquarters operation and plants in Neville Island and Burgettstown, Washington County.