Lanses Q1 Operating Profit 245 Million Euros... 9.9% Decrease YoY

LANSYS Executives Decide to Return Bonuses

[Asia Economy Reporter Hwang Yoon-joo] German petrochemical company LANXESS announced on the 12th that its EBITDA (earnings before interest, taxes, depreciation, and amortization), excluding special items, for the first quarter of this year was 245 million euros, down 9.9% compared to the same period last year. During the same period, sales slightly decreased to 1.704 billion euros, and net profit fell 27.6% to 630 million euros.

The main reason for the decline in performance was a decrease in demand in the automotive industry due to the adverse effects of the novel coronavirus disease (COVID-19). This led to a drop in the performance of the engineering materials business segment.

LANXESS expects the impact of COVID-19 to intensify in the second and third quarters. Accordingly, it forecasts EBITDA excluding special items for the second quarter to be in the range of 200 to 250 million euros, and the annual EBITDA excluding special items for this year to be between 800 million and 900 million euros. This is slightly lower than the previously projected annual performance forecast of 900 million to 1 billion euros.

Matthias Zachert, Chairman of LANXESS, said, "Thanks to a balanced business portfolio, we have been able to limit the economic impact of COVID-19 so far. Although we have not yet reached the peak of the crisis, LANXESS has taken extensive crisis management measures and maintains a stable position, so we believe we are well prepared for the crisis."

In fact, LANXESS has implemented company-wide preventive measures since the early stages of the COVID-19 outbreak. These measures include strict compliance with hygiene rules, implementation of remote work, and changes to shift work systems. Although some factories in China, Italy, and India were temporarily closed, most production facilities worldwide have continued operations.

It has also secured liquidity of around 3 billion euros. Cost-saving measures such as suspending planned share buybacks and postponing new projects, along with the completion of the sale of its stake in Currenta, enabled the company to secure funds. Currenta is an essential service management operator for infrastructure and energy supply within the German chemical park, a joint venture between Bayer Germany (60% stake) and LANXESS (40%). LANXESS completed the sale of its 40% stake as of April 30.

Meanwhile, LANXESS's Supervisory Board, Management Board, and top executives have decided to return 25% to 50% of their bonuses in relation to the spread of COVID-19.

This content was produced with the assistance of AI translation services.