Lenzing Group, the Austrian maker of cellulosic fiber, raised its forecast for 2011 after reporting record first quarter results attributed to rising global demand and a shortage of cotton.
Consolidated sales of the Lenzing Group increased by 45.8% to EUR 532.1 million ($727.2mm) in the first quarter of 2011. Group EBITDA improved by 65.8%, from to EUR 114.9 million ($157.0mm). Operating profit (EBIT) rose by 83.6% to EUR 90.7 million ($124.0mm) in the first quarter of 2011. The dynamic upward trend was also reflected in the performance compared to the fourth quarter of 2010: Consolidated sales increased by 10.7% and quarterly EBITDA by 18.4%, while quarterly EBIT was up 43.7% (19.8% as adjusted for non-recurring effects) and net income for the period rose by 41.8%.
All available production sites were operating at full capacity in the first quarter of 2011, said Lenzing Chief Executive Officer Peter Untersperger. Nevertheless, we could have sold an even greater volume of fibers. The strong global fiber demand combined with the supply gap for cotton lead us to expect an upward trend for the man-made cellulose fibers we manufacture, says Lenzing Chief Executive Officer Peter Untersperger, commenting on the companys business development. The further expansion of the Lenzing Groups fiber production capacities in Asia and Europe is proceeding as planned, according to Untersperger. At the end of 2011, Lenzing should have a total annual fiber production capacity of approx. 770,000 tons p.a., up from 710,000 tons p.a. at the end of 2010.”
The Fibers segment, the biggest segment of the Lenzing Group, showed outstanding business development in the first quarter of 2011, benefiting from strong fiber demand. At the beginning of 2011, announced price increases of about 10% were implemented in the Textile Fibers and Nonwoven Fibers business units, and were well accepted by the market.
The core fibers business of the Lenzing Group continues to benefit from a continuing upward trend. Assuming a stable global economy that is not negatively influenced by geopolitical events, the 2011 business year of the Lenzing Group is expected to develop more favorably than originally forecast at the beginning of the year.
The main reason is the better than expected acceptance of price increases, especially for specialty fibers (Lenzing Modal and Tencel), which in turn is related to the current global fiber price structure with still high cotton prices.
Lenzings management board now expects consolidated sales to increase to between EUR 2.1 billion and EUR 2.2 billion. Furthermore, for the business year 2011, the board is targeting an EBITDA margin of 21%-23% and an EBIT margin of 16%-18%.
Among Lenzings fiber products are Tencel Sun, which is designed to provide enhance moisture absorption and sun protection during outdoor activities, including watersports. The fiber is made from wood, is 100 percent biodegradable and is increasingly being used by outdoor brands as a substitute for polyester fibers and conventionally finished fabrics with sun protection.
| Segment Fibers | ||
| Sales | 481.4 | 328.1 |
| EBITDA | 109.7 | 66.4 |
| Operating profit (EBIT) | 86.9 | 47.2 |
| Segment Plastics Products | ||
| Sales | 44.9 | 32.8 |
| EBITDA | 3.3 | 2.2 |
| Operating profit (EBIT) | 1.6 | 1.2 |
| Segment Engineering | ||
| Sales | 30.8 | 17.8 |
| EBITDA | 2.6 | 1.4 |
| Operating profit (EBIT) | 2.2 | 1.1 |
| Segment Fibers | ||
| Sales | 481.4 | 328.1 |
| EBITDA | 109.7 | 66.4 |
| Operating profit (EBIT) | 86.9 | 47.2 |
| Segment Plastics Products | ||
| Sales | 44.9 | 32.8 |
| EBITDA | 3.3 | 2.2 |
| Operating profit (EBIT) | 1.6 | 1.2 |
| Segment Engineering | ||
| Sales | 30.8 | 17.8 |
| EBITDA | 2.6 | 1.4 |
| Operating profit (EBIT) | 2.2 | 1.1 |
