Lenzing achieves record Q3 result

Figures posted by the Lenzing Group for the third quarter of 2010 are said to be the best quarterly results achieved in the company’s history.

Earnings before interest and tax (EBIT) for the period reached €60.8m, up from €37.3m for the same period in 2009. EBIT reached a record nine month high of €168.8m, tripling the €54.3m achieved in 2009, said the company.

Lenzing’s third quarter sales grew by 45.2 % from €885m last year to €1.285m. Excluding the effect of acquisitions, sales grew by 37.7 %.

The company attributes its strong sales growth to the business development of its cellulose fibres, which exceeded half-year expectations. The record result is also said to be the effect of increased production capacity, enabling the manufacture of larger shipments, combined with an improved fibre price level. In addition, Lenzing believes the full consolidation of its Paskov pulp factory in May 2010 has had a positive impact on the figures.

During the third quarter of 2010, all Lenzing fibre production sites were fully utilised, some reaching new records in production and shipment. According to the company, the increase in raw material prices was largely, but not fully passed on to the market.

Peter Untersperger, chairman of the Lenzing management board, said: “We are facing a growing and sustainable excess in demand in all important fibre markets. In addition, the floods in Pakistan and India recently caused the global textile fibre market to expect a significant physical shortage of cotton and triggered a distinct increase in cotton prices.

“The calamitous weather situation in Pakistan and India has led to rethinking. Cotton will, in the future, be viewed with ever increasing doubt concerning the crop’s pricing and availability. Market analysts therefore expect a structural change of the global fibre market which should strongly benefit cellulose man-made fibres, such as viscose, modal and Tencel in the medium and long term.”

Going forward, Lenzing expects the fourth quarter to show continued market development and further positive results in its core fibre business. The majority of the company’s fibre capacity for the coming quarter has already been sold.

Lenzing’s ongoing capacity expansion programmes will continue at the majority of its fibre production sites, intended to relieve pressure on production for the 2011/12 period. The company also plans to favour the manufacture of special fibres in its product mix. Lenzing expects 2010 will prove a record year for business.

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