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Specialty chemical manufacturer, Lanxess, has raised its guidance for 2016 following a strong third quarter.
Strong third quarter performance has led Lanxess, once again, to raise its earnings guidance for 2016. The Cologne-based company now expects to achieve EBITDA pre-exceptionals between €960 million and €1 billion, up from the initial €930-€970 million.
In the third quarter of 2016, EBITDA pre-exceptionals increased 9.4% to €257 million, against €235 million a year earlier. The EBITDA margin pre-exceptionals improved year-on-year from 12% to 13.4%. As in the preceding three-month period, the good overall earnings performance was due especially to the strong operational development of the “new Lanxess” segments; Advanced Intermediates, Performance Chemicals (which includes leather chemicals) and High Performance Materials, as well as to improved cost structures, according to the chemical manufacturer.
Net income in the third quarter increased 51.2% to €62 million from €41 million the previous year. Group sales declined by a slight 1.6% in the period to €1.92 billion, against €1.95 billion a year earlier.
The Performance Chemicals segment posted a year-on-year increase in sales of 3.2%, from €524 million to €541 million in the quarter. EBITDA pre-exceptionals increased 5.8% to €91 million, against €86 million a year earlier. In particular, higher sales volumes in almost all business units contributed to the improvement in earnings. The EBITDA margin pre-exceptionals increased slightly from 16.4% to 16.8%.
“We took the momentum from the first half of the year into the third quarter and delivered renewed proof of the operational strength of “new” Lanxess. We are therefore again raising our guidance for the full year,” said Matthias Zachert, Chairman of the Board of Management, Lanxess.
The company says it is anticipating a normal seasonal business pattern in the final quarter of 2016; performance is to be slightly subdued compared with the preceding quarters.