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LNZ - Lenzing AG News Story

€45.8 0.6  1.2%

Last Trade - 25/09/20

Sector
Basic Materials
Size
Mid Cap
Market Cap £1.10bn
Enterprise Value £1.89bn
Revenue £1.67bn
Position in Universe 342nd / 1042

UPDATE 2-Lenzing quarterly profit rises as cost cuts expanded

Thu 13th November, 2014 9:56am
* Q3 EBIT 37.1 mln eur vs Reuters poll avg 22.2 mln eur 
    * Cost-cutting programme ramped up 
    * Fibre prices to fall - CEO 
    * Shares jump 4.4 percent 
 
 (Adds CEO comments on prices, outlook, share price) 
    By Shadia Nasralla and Angelika Gruber 
    VIENNA, Nov 13 (Reuters) - Austrian viscose fibre maker 
Lenzing  LENV.VI  said cost cuts helped it increase quarterly 
earnings, forecasting further savings and possible price 
reductions to counter the impact of a market swamped with cheap 
Chinese and Indian viscose. 
    Operating profit rose 11 percent to 37.1 million euros 
($46.2 million) in the third quarter, it said on Thursday, its 
first profit gain in more than two years and beating even the 
highest estimate in a Reuters poll of analysts.  ID:nL6N0SW4OD  
    Lenzing shares were up 4.4 percent at 0915 GMT to trade at 
51.05 euros, near a two-month high, outperforming a European 
chemicals index  .SX4P  which rose around 1.3 percent. 
    Lenzing said it expects cost savings to exceed its targeted 
90 million euros in 2014 and to reach its annual target of at 
least 160 million euros in 2016. 
    "Further cost reductions are planned in light of the fact 
that no significant impetus is expected from the market," the 
company said. 
    About a quarter of 2014's savings will be in personnel 
costs. Lenzing wants to cover the rest by reducing material 
costs, increasing efficiency and cutting administration. A 
strategic review of jobs and plants will be finished in the 
first quarter of next year. 
    Lenzing is planning to cut 600 full-time equivalent jobs 
globally in 2014 and 2015. 
     
    PRICES LOW 
    Sales in the third quarter were steady at 457.7 million 
euros, just missing estimates. The company said average fibre 
selling prices had dropped despite good demand.  
    "After the Chinese and Indian producers have already 
announced price reductions for viscose it will be difficult for 
us to resist these reductions," Chief Executive Peter 
Untersperger told Reuters by telephone.  ID:nV9N0RO00O  
    No price increases were in sight, he said, adding that it 
would hardly be possible to beat Lenzing's third-quarter 
earnings before interest, tax, depreciation and amortisation of 
68 million euros in the fourth quarter. 
    Untersperger said Lenzing was focusing on the high end of 
its specialised Modal and Tencel fibres and was on track to 
reach its 30,000-tonne 2014 output target for its Austrian 
Tencel plant, which started producing in the third quarter. 
    ($1 = 0.8036 euro) 
 
 (Editing by Clara Ferreira Marques and Vincent Baby) 
 ((Shadia.Nasralla@thomsonreuters.com; +43 664 390 6505; Reuters 
Messaging: shadia.nasralla.thomsonreuters@reuters.net)) 
 
Keywords: LENZING RESULTS/
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