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LNZ - Lenzing AG News Story

€45.8 -0.1  -0.2%

Last Trade - 18/09/20

Basic Materials
Mid Cap
Market Cap £1.11bn
Enterprise Value £1.90bn
Revenue £1.67bn
Position in Universe 345th / 1039

UPDATE 1-Fibres producer Lenzing swings to H1 loss but sees ray of hope

Wed 5th August, 2020 8:27am
(Adds detail, background)
    VIENNA, Aug 5 (Reuters) - Fibres producer Lenzing  LENV.VI 
swung to a loss in the January-June period as low prices and
weak demand hit its business but it said textile fibre markets
have started to recover since June.
    The Austrian group, which produces cellulose fibres derived
from sustainable wood and pulp for customers including H&M
 HMb.ST , Victoria's Secret  LB.N , and Levi's, booked a loss of
14.4 million euros ($17.0 million) in the first half of 2020
after making a profit of 76.8 million euros last year. 
    Lenzing is facing a pricing decline in its core commodity,
viscose, and crumbling demand in its main end-market textiles
but is investing in new production capacities, which is pushing
up its debt.
     The group said it expects its revenue and operating
performance in the third and fourth quarters to exceed those it
reported in the second quarter.
    However, the recovery in its textile fibre markets since
June still saw varying regional prices and demand momentum,
Lenzing said. 
    Its nonwoven fibres unit, which produces cleansing tissues,
sterile wraps and plasters, accounted for more than half of
revenues in the second quarter as it benefitted from increased
hygiene awareness due to the pandemic. 
    Lenzing said it was fully committed to its expansion
projects in Brazil, where it is building a $1 billion pulp mill
in a joint venture with Duratex S.A  DTEX3.SA , and Thailand,
where it is building a 400 billion euro production site. 
    It said both would make a significant contribution to
earnings from 2022.
    Net debt increased to 809.3 million euros by the end of
June, up from 511.4 million euros at end-December.

($1 = 0.8467 euros)

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