Specialty chemicals company Lanxess Ag (LNXSF.PK) Thursday said it expects first-quarter earnings before interest, tax, depreciation and amortization, or EBITDA pre-exceptionals, to be significantly lower than the previous year, citing weak demand in tire and automotive industries in Europe.
Lanxess also said that as a result of the weak business development in the first quarter, it believes EBITDA pre-exceptionals in full-year 2013 will not reach the record level of the prior year.
The company said the low level of demand in the second half of 2012 has continued into the start of the year 2013 in most businesses. However, the firm said it will continue to focus on cost discipline and flexible asset management and expects demand to improve in the second half of the year.
For the first quarter, the company sees EBITDA pre-exceptionals of between 160 million euros and 180 million euros. In the prior-year quarter, it had achieved an EBITDA pre-exceptionals of 369 million euros.
The current estimate also reflects start-up costs of 20 million euros for its new Butyl Rubber Plant in Singapore.
The company said it is sticking to its mid-term targets of 1.4 billion euros and 1.8 billion euros EBITDA pre-exceptionals in 2014 and 2018, respectively.
Lanxess will give a more precise outlook for the full year at the time of publishing its first-quarter report on May 8.
Earlier this month, the company had reported that its preliminary fourth-quarter net income increased to 51 million euros from 5 million euros a year earlier. Earnings per share grew to 0.62 euros from 0.06 euros a year earlier. Fourth quarter sales were flat year-on-year at 2.123 billion euros.
On Frankfurt's Xetra, the shares closed Wednesday's regular trading at 62 euros, down 0.61 percent.
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