By Chris Sweeney, Crain News Service
COLOGNE, Germany (May 9, 2014) — Synthetic rubber producer Lanxess A.G. reported a 17.8-percent jump in pre-tax operating income for the quarter ended March 31, despite a “persistently challenging market environment” for synthetic rubber.
Sales fell 2.5 percent to $2.78 billion, while net income held steady at $34.8 million. The EBITDA rose to $284.7 million, or 10 percent of sales. Sales in the performance polymers segment — which includes synthetic rubber — declined 6.3 percent to about $1.53 billion on reduced selling prices.
CEO Matthias Zachert said Lanxess is developing measures to realign itself, which will include streamlining its decision-making process and optimizing administrative structures.
“We must become significantly more competitive and profitable again,” Mr. Zachert said. “The focus will therefore be on the business portfolio, our business units, the efficiency of our administration and our production sites.”
Lanxess said the personnel adjustments initiated last year as part of its advance efficiency program have been completed in line with expectations.
The program included savings of $135.3 million by 2015 and beyond by eliminating 1,000 jobs worldwide. Lanxess said in an earlier press release that approximately 730 employees have accepted voluntary layoffs by the end of 2015, accepting either early retirement or severance packages. Approximately $151.5 million of the estimated $206.5 million in exceptional charges budgeted for the program were incurred in 2013.
The Cologne-based firm said the encouraging increase in volumes throughout all business segments did not offset the drop in selling prices and negative currency effects.
The company said it anticipates the economic environment will continue to recover slowly during the remainder of the year, but it said it believes the challenging competitive environment for its synthetic rubber businesses will continue because of persisting price pressure.
This report appeared on the website of Rubber & Plastics News, an Akron-based sister publication of Tire Business.
How have tire prices been in the last few months?
|They've gone up 1-5%||
|They've increased 6-10%||
|They've stayed flat||
|They've gone down between 1 and 5%||
|They've gone down 6-10%||
|They've dropped more than 10%||