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Lenzing H1 revenues grow but earnings decline

By Prachi Singh

Aug 3, 2022

Management

Image: Lenzing AG

The Lenzing Group’s revenue grew by 25.2 percent year-on-year to 1.29 billion euros in the first half of 2022, primarily due to higher fibre prices.

EBITDA decreased by 13.3 percent to 188.9 million euros and the EBITDA margin reduced from 21.1 to 14.6 percent in the first half of the year.

Commenting on the outlook, Stephan Sielaff, Lenzing Group CEO said in a release: “The second half of the year will continue to be characterised by elevated levels of uncertainty and extreme challenges on the energy and raw materials sides. Lenzing is a company with an international footprint and for this reason is partly able to offset certain local challenges globally, albeit at significantly higher costs.”

Rising manufacturing costs hit Lenzing earning in H1

The company said that the earnings trend mainly reflects the cost trend in global energy and raw material markets, which affected the whole manufacturing industry.

Energy, raw materials and logistics costs rose sharply once again in the reporting period, after cost pressure had already risen steadily throughout the 2021 financial year.

Net profit for the period decreased by 24.8 percent to 72.3 million euros, while earnings per share amounted to 2.36 euros compared to 3.06 euros in the first half of 2021.

Despite uncertain conditions, Lenzing confirms EBITDA outlook

The company added that the International Monetary Fund forecasts global growth of 3.2 percent for 2022, however, the war in Ukraine and China’s zero-Covid policy hit the global economy hard in the first half of 2022.

The currency environment is expected to remain volatile in the regions relevant to Lenzing.

Lenzing further said that in the trend-setting market for cotton, signs are emerging of a slight increase in stocks in the current 2021/2022 harvest season, although dynamics on international commodity markets and problems in the global supply chain are likely to continue to have a significant bearing on price trends.

As a consequence, earnings visibility has diminished further. In structural terms, Lenzing continues to anticipate growth in demand for environmentally responsible fibres for the textile and clothing industry as well as the hygiene and medical sectors.

Taking into consideration the aforementioned factors and the first earnings contributions from the key projects in Thailand and Brazil, the Lenzing Group continues to anticipate that EBITDA for the full 2022 year will be significantly above the level of 2021.

Lenzing