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LNZ - Lenzing AG News Story

€42.85 -0.4  -0.9%

Last Trade - 12:44pm

Sector
Basic Materials
Size
Mid Cap
Market Cap £1.04bn
Enterprise Value £1.82bn
Revenue £1.65bn
Position in Universe 345th / 1031

Lenzing 2019 profit down 23% on low prices, write-offs

Mon 27th January, 2020 9:41pm
VIENNA, Jan 27 (Reuters) - Austrian fibre producer Lenzing
 LENV.VI  said on Monday its full-year profit fell 23%, blaming
write-offs due to the halt of its U.S. expansion and low prices
for its textiles due to oversupply. 
     The group, which makes cellulose fibres that are derived
from sustainable wood and pulp, said according to preliminary
figures 2019 net profit fell to 114 million euros ($127 million)
from 148 million in 2018. 
    Analysts had estimated a net income of 144 million euros on
average, Refinitiv data show. Lenzing said revenue was down 3%
at 2.11 billion euros, largely in line with average Refinitiv
estimates of 2.12 billion.  
    The company halted a planned U.S. expansion in summer 2018
partly due to rising tariffs between the United States and
China, as much of the project's production was destined to the
People's Republic. It decided to build a 400 million euro
facility in Thailand instead.  urn:newsml:reuters.com:*:nL8N23X17H
    "Engineering costs related to the mothballed U.S. lyocell
fibre expansion will be fully written off," Lenzing said in a
statement.   
   The company warned in November that due to a challenging
market environment with historically low viscose prices, 2019
results would be slightly lower than in the previous year.
 urn:newsml:reuters.com:*:nL8N27M1JU  
   Lenzing produces part of its fibres in China's Nanjing, 500
kilometres (311 miles) from the city of Wuhan, where the
coronavirus outbreak began. The group is monitoring the
situation closely and will make decisions depending on
developments, a company spokesman said on Monday. 

($1 = 0.9014 euros)

 (Reporting by Kirsti Knolle; Editing by Lisa Shumaker)
 ((kirsti.knolle@thomsonreuters.com; +43 1 2530 1650 13;))
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