Lenzing 2009 earnings crash

Upper Austrian fibre producer Lenzing AG reported today (Thurs) that its results had been significantly worse in 2009 than in 2008.Lenzing said its earnings before interest and taxes (Ebit) had declined by 23 per cent year on year to 100.7 million Euros and its earnings before interest, taxes, deprecation and amortisation (Ebitda) had fallen by 9.3 per cent year on year to 182 million in 2009.Turnover fell from 1.255 billion Euros in 2008 to 1.255 billion Euros in 2009, and debt declined from 365.4 million Euros in 2008 to 315.7 million Euros in 2009.The firm predicted that increasing demand and higher prices would mean better results in 2010.Board member Friedrich Weninger said prices had begun to increase in the second quarter of last year after plunging at the end of 2008.Board chairman Peter Untersperger said the firm’s strategy for preparing itself to take advantage of an upswing in the market had been successful. It had won new suppliers, brought new, innovative product applications to the market and paved the way for future growth.He also noted that, despite the introduction of a cost-cutting programme, Lenzing had invested 20 million Euros in research, development and innovation in 2009.Untersperger added he hoped the that the firm would increase its world market leadership in cellulose fibre products in 2010.Lenzing announced last month that it would invest 116 million Euros in a viscose fibre plant in India. It added that the plant would initially have an annual production capacity of 60,000 tonnes and would rise to 240,000 tonnes within 10 years.Dieter Eichinger, responsible for Lenzing’s textile business, said the plant, 70 kilometres south of Mumbai, would create 2,000 new jobs and inject 330 million US dollars into the Indian economy within five years.Eichinger said opportunities in India, the world’s second largest textile and fibre producer, were enormous. At present, cellulose fibres constituted only four per cent of India’s textile production but had the biggest potential growth, he claimed.The firm said earlier in February that it would invest in another viscose fibre production facility in Asia and increase production capacity at its Indonesian subsidiary PT South Pacific Viscose (SPV) by 50 per cent to 238,000 tonnes annually.Lenzing spokeswoman Angelika Guldt said the firm’s turnover would rise to more than 400 million dollars during the next few years – “25 to 30 per cent more than in 2009” – and the fibre market in Asia would grow by 10 to 15 per cent annually.