Lenzing - The Lenzing Group's performance during the first quarter of 2023 largely reflected market trends with the cellulosic fibre specialist posting a drop in earnings on the back of a slight increase in revenue growth as fibre sales recovered over the course of the quarter.
However, after the market environment deteriorated significantly in the third and fourth quarters of the previous year, signs of recovery emerged during the first quarter in terms of demand as well as raw material and energy costs. Textile fibers recorded moderate but steadily improving demand. Business with fibers for nonwovens and with dissolving wood pulp performed better than expected. Raw material and energy costs were still at an elevated albeit decreasing level.
For the first quarter, revenues increased by 1.3 per cent compared to the prior-year quarter to €623.1 million.
This growth was primarily due to higher pulp revenues, while fibre revenues were down. As a consequence, earnings before interest, tax, depreciation and amortization (EBITDA) decreased by 66.2 per cent year-on-year to €29.7 million in the first quarter of 2023. The net result for the reporting period amounted to a loss of €64.9 million compared with €34.1 million in the first quarter of 2022.
Lenzing also launched a reorganization and cost-cutting program in the third quarter of 2022 and says it is now fully on track with its implementation. More than €70 million in annual cost savings are targeted once the program has been fully implemented.
“After the crisis year of 2022, the negative after-effects were still clearly evident in the first quarter of 2023," said Stephan Sielaff, Lenzing Group CEO. "However, we noted signs of recovery in terms of demand as well as energy and raw material costs during the quarter. Lenzing has successfully made great efforts in relation to both costs and liquidity and is well prepared for an upturn in demand.
“In the medium and long term, we continue to anticipate a strong growth in demand for Lenzing’s sustainable products. We are convinced that our two investment projects in China and Indonesia will further strengthen our positioning in this respect.”
In accordance with the strategy and following the successful implementation of the two key projects in Thailand and Brazil, Lenzing said it will continue on its profitable growth trajectory, sharpen its focus on sustainable and high-quality premium textile fibres and nonwoven fibres, and in parallel further advance the transition from a linear to a circular economy model.
Since 2021, Lenzing has invested more than €200 million in production sites in China and in Indonesia in order to convert existing capacities for generic viscose into capacities for environmentally responsible specialty fibres.
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