German speciality chemicals company Lanxess expects to post a record year in terms of earnings, following “an excellent” third quarter in 2017.
The Cologne-based company said its global sales for the three months to end of September rose by 25.1% to reach €2.4bn, compared to €1.9bn in the third quarter of 2016.
Earnings (EBITDA pre exceptionals) improved 35% to €347m, driven by the acquisition of US-based Chemtura Corps in April and higher volumes.
“Our clear strategic focus on high-margin specialty chemicals is increasingly paying off, and in operational terms we are performing very well in our new setup,” said Matthias Zachert, chairman of the Lanxess.
According to Zachert, all regions and all specialty chemicals segments are currently seeing “considerable earnings growth.”
Following the strong Q3, Lanxess has revised its forecast for 2017 positively, lifting the lower end of the range by €25m.
Lanxess now expects earnings to be between €1.25bn and €1.3bn, higher than its record operating result of €1.2bn in 2012.
Sales of the Advanced Intermediates segment in the third quarter stood at €479m, 10% above the prior-year figure, with segment's EBITDA up by nearly 5% at €87m. Higher volumes in the Advanced Industrial Intermediates business unit had a particularly positive effect.
The integration of US additives business Chemtura also led to a 124% leap in earnings in Lanxess' new Specialty Additives, which posted a 120% rise in EBITDA pre exceptionals at €77m.
Sales in the Performance Chemicals segment rose by 11% in the third quarter to €364m, with EBITDA up 16.1% at €65m, thanks to higher volumes.
In the Engineering Materials segment, earnings rose by more than 52% to €64m on sales of €351m, up 36.6% compared to the same quarter last year. The positive earnings, said Lanxess, resulted from higher volumes and the trend toward higher-margin products.
Arlanxeo, Lanxess's rubber JV with Saudi Aramco, was the only segment posting a decline in earnings for the period despite a 6% rise in sales at €717m. Earnings for the segment fell 17% to €76m, due mainly to the significant volatility of raw material prices and a weak US dollar.