Cologne, Germany — Sales at chemicals additives and polyurethane specialist Lanxess fell by 1.6% in the third quarter of 2016 to EUR 1.92 bn compared with EUR 1.95 bn in the equivalent quarter of 2015.
The firm said that earnings before interest taxation depreciation and amortisation and exceptional charges in the third quarter of 2016 however rose by 9.4 % to EUR 257 m, compared with EUR 235 m a year earlier.
The EBITDA margin before exceptional items improved year-on-year from 12.0 % to 13.4 %, the firm added.
Lanxess said “the good overall earnings performance was due especially to the strong operational development of the ‘new’ Lanxess segments – Advanced Intermediates, Performance Chemicals [where polyurethane additives results are recorded] and High Performance Materials.”
The additives business unit was singled out, in an analysts’ presentation as generating higher volumes than the prior year period.
Overall Lanxess said that its Performance Chemicals segment posted a year-on-year sales increase of 3.2 %, from EUR 524 m to EUR 541 m. Alongside higher sales volumes, the Clean and Disinfect business acquired from Chemours at the end of August was one of the factors in this performance. EBITDA before exceptionals increased by 5.8 % to EUR 91 m, compared with EUR 86 m a year earlier. In particular, higher sales volumes in almost all business units contributed to the improvement in earnings. The EBITDA margin before exceptional items increased slightly from 16.4 % to 16.8 %.
“We took the momentum from the first half of the year into the third quarter and we are raising our guidance for the full year,” said Matthias Zachert, chairman of the board of management of Lanxess.
Referring to the purchase of Chemtura, due to close in mid-2017, Zachert told analysts: “Chemtura is a chemical business so it has its own cycliclity. It has a very different and complimentary end industry than our existing Lanxess portfolio.
“As far as the urethanes are concerned they suit different industries and customers that today we don’t have so the Chemtura businesses and will enhance our additives business. The volatility of the Lanxess group will be visibly reduced," he said.