Lenzing Group Q1 sales decline 6%

However, this also includes the shift of about EUR 25 mn from external to internal sales at the Paskov pulp plant. In a year-on-year comparison of total fiber sales, the selling price decline could almost be completely compensated by the higher fiber sales volumes in the first quarter of 2013.

Highlights:
- Weak fiber selling prices, Lenzing counteracts trend with cost savings
- EBITDA of EUR 64.5 mn above expectations
- Unchanged guidance for the entire yeaaar 2013

Although consolidated earnings before interest, tax, depreciation and amortization (EBITDA) in the first quarter of 2013 fell to EUR 64.5 mn (1-3 2012: EUR 93.1 mn), the EBITDA margin at 13.0% (1-3 2012: 17.6%) was higher than expected, and was slightly above the guidance for the first quarter of 2013. Earnings before interest and tax (EBIT) of the Lenzing Group declined by 46.1% to EUR 36.2 mn (1-3 2012: EUR 67.2 mn), comprising an EBIT margin of 7.3% in the first three months of the year (1-3 2012: 12.7%).

“Lenzing acquitted itself quite well in the first quarter of 2013. We counteracted the more difficult market conditions in a timely manner by implementing the cost optimization project excelLENZ, and already achieved the first cost improvements.

"Moreover, we are strengthening our specialty strategy by putting the focus on our specialty fibers Lenzing Modal and TENCEL. A further priority is the optimization of our cash management in the Lenzing Group by postponing maintenance investments for the time being which are not absolutely necessary“, says Peter Untersperger, Lenzing’s Chief Executive Officer, in explaining the current approach.

In the first quarter of 2013, total fiber sales volumes amounted to about 216,000 tons, at about the same level as the fourth quarter of 2012 but approximately 13% higher than the prior-year quarter. This increase can be attributed to the new production capacities coming on stream in Indonesia and the USA. A fire took place at the TENCEL fiber production site in Heiligenkreuz in March, which will likely result in a loss of production amounting to some 5,000 tons in 2013 as a whole.

The strategic expansion program of the Lenzing Group was implemented as planned in the first quarter of the year. Rapid progress is being made on construction of the large TENCEL factory at the Lenzing site.

The conversion of the Biocel Paskov pulp plant from a paper to a swing capacity paper and dissolving pulp plant is also proceeding on schedule. On balance, capital expenditure in the form of investments in property, plant and equipment and intangible assets totaled EUR 56.5 mn in the first quarter of 2013, above the prior-year level of EUR 52.9 mn.

Adjusted Group equity as at March 31, 2013 increased once again, rising slightly by 1.7% to EUR 1,172.9 mn from EUR 1,153.1 mn at the end of 2012. This corresponded to an excellent adjusted equity ratio of 45.1% of the balance sheet total (December 31, 2012: 43.8%).

Lenzing Group