Lenzing: Improved results in Q3/2020
Lenzing

Improved results in Q3/2020

Lenzing

In the first 3 quarters (Jan.-Sept.) of 2020, the producer of cellulosic fibers, Lenzing AG, Lenzing/Austria, successfully responded to the extremely difficult market environment due to the corona crisis. The immediate effects of the Covid-19 crisis increased the pressure on prices and volumes in the textile fiber segment, in particular in the 2nd quarter of 2020.

The increase in demand towards the end of the 3rd quarter, primarily for wood-based specialty fibers such as Tencel Modal and Lenzing Ecovero, had a positive impact on the revenue and earnings development, but was still below the level of the previous year. As a result, sales declined by 26.1% to € 1.19 billion in the first 3 quarters of 2020 (2019: 1.62 billion). EBITDA (earnings before interest, tax, depreciation and amortization) fell by 47.4% to €140.4 million in the first 3 quarters of 2020 (2019: €266.9 million). Lenzing’s investment activities continued to focus on expanding the internal production of pulp, increasing the share of specialty fibers and implementing the climate targets in line with the sCore Ten corporate strategy during the reporting period. The construction of the dissolving wood pulp plant in Brazil continues to progress according to plan. Expenditure is expected to be US$1.38 billion, and commissioning is scheduled for the 1st half (H1) of 2022. The strategic target to generate roughly 50% of revenue with specialty fibers in 2020 has been met. The focus of the coming years will clearly be on the construction of the new, state-of-the-art lyocell plant in Thailand, with the objective to increase the share of specialty fibers in the revenue generated by the Segment Fibers to more than 75% by 2024. Production is expected to be launched at the end of 2021. The investment for the new plant with a capacity of 100,000 tons amounts to roughly € 400 million.

 

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