Lenzing Group said sales and profits declined in the first quarter ended March 1, as a higher volume of rayon shipments failed to completely offset lower average fiber prices. The Austrian company continues to moving forward with its global capacity expansion plans.
Lenzing reported consolidated sales reached €528.2 million ($692mm), down 0.7 percent from the first quarter of 2011. EBITDA declined 19.0 percent to €93.1 million ($122mm). Record unit shipments failed to fully offset an 11 percent decline in average fiber selling prices compared to the first quarter of 2011. Average fiber selling prices were down 5.6 percent from the fourth quarter of 2011. Lenzing said the results were in line with expectations.
Lenzing continues with its strategic capacity expansion program, including construction of the fifth fiber production line at its Indonesian subsidiary South Pacific Viscose (SPV) and ongoing capacity expansion efforts and remodeling measures related to fiber and pulp production. The Lenzing Group will invest a total of approximately €1.6 billion ($2.1bb) by 2015 to achieve annual production of about 1.2 million tons of cellulose fibers. Fiber shipment volumes on the part of the Lenzing Group are likely to increase to about 810,000 tons for the entire 2012 fiscal year.
Lenzing maintained capacity utilization at its production plants at 95 percent and expects prices to firm in the back half of the year. However, it does not expect to match record results posted in 2011, when demand for its Modal and Tencel rayon fibers rose sharply as apparel makers shifted to synthetics to avoid paying sharply higher cotton prices.
