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Lanxess Confident Of 2012, Hikes Dividend After 'record' Annual Results

3/22/2012 3:27 AM ET

Lanxess AG (LXS.DE,LNXSF.PK) on Thursday said it got off to a promising start in 2012 and also hiked dividend after reporting higher earnings and sales in its fiscal 2011. For its 'traditionally weakest' fourth quarter, the German specialty chemicals company's profit declined due to realignment charges as well as margin pressure due mainly to maintenance shut-downs.

For its first quarter of fiscal 2012, Lanxess anticipates adjusted EBITDA, a key earnings metric, to increase from last year to 300 million euros to 350 million euros.

Lanxess CEO Axel Heitmann at the Annual Press Conference, stated, "Our plans for continued growth are founded on innovations and technologies that serve the global megatrends, especially mobility - with the primary focus on solutions for sustainable mobility."

For fiscal 2011, the company generated 34 percent increase in net income and 23 percent growth in sales as all regions posted double-digit sales gains, with the strongest growth in Latin America.

In the final quarter of the year, net income fell 80.8 percent to 5 million euros or 0.06 euros per share from last year's 26 million euros or 0.32 euros per share. The latest quarter results included exceptional charges of about 20 million euros for a realignment of the Pharma business of the Saltigo business unit.

Sales for the quarter climbed 16 percent to 2.12 billion euros from 1.83 billion euros in the 'very strong' prior year, thanks to the company's price-before-volume strategy, successful acquisitions and focus on the emerging markets, it said.

Adjusted EBITDA edged up 1.2 percent with improved performance mainly in Performance Polymers segment. Meanwhile, adjusted EBITDA margin dropped to 8.2 percent from 9.4 percent last year as a result of "maintenance shut-downs at synthetic rubber production facilities, inventory write-downs linked to raw material prices, and destocking by customers".

Further, the company said its Board proposed raising annual dividend by 21 percent to 0.85 euros per share, citing good development in 2011.

Looking ahead, the company said it is confident about its business development in 2012, with solid growth expected in the emerging markets, and also forecasts continuing solid development in agricultural end markets and a gradual recovery in the construction industry.

The positive view is projected amid ongoing uncertainties of high levels of public debt, volatile exchange rates, fluctuating raw material prices and cautious ordering patterns by some European customers.

Lanxess said it will present a more detailed outlook for the current year, when it publishes its first-quarter report on May 9.

Heitmann added, "We are on course for further growth and well on the way to achieving our medium-term earnings target of EUR 1.4 billion in 2015."

The company also said it plans to boost sales of products and technologies for "Green Mobility" by 80 percent to about 2.7 billion euros by 2015 from 2011's around 1.5 billion euros.

Lanxess shares closed Wednesday's regular trading session at 56.28 euros, up 0.59 euros or 1.05 percent on Frankfurt's Xetra.

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by RTT Staff Writer

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