Cellulosic fibre producer Lenzing has extended its strong first half performance into the third quarter of 2010, generating the best quarterly result in the company's history with earnings (EBIT) of Euros 60.8 million (Q3 2009, Euros 37.3 million).Nine-months sales in 2010 grew by 45.2 % from Euros 885 million in 2009 to Euros 1,285.5 million. EBIT reached a new nine-month record high of Euros 168.8 million and more than tripled EBIT for the same period in 2009 (Euros 54.3 million).

According to Lenzing, the reason for the strong sales and results lies in the significantly improved cellulosic fibres business, which turned out to be far better than expected, even at mid-year. Higher shipments as a result of increased production capacity, a fibre price level improved over last year's and the full consolidation of the Paskov pulp factory from May 2010 onwards, yielded correspondingly positive results. Sales excluding acquisition effects grew by 37.7 %.

Peter Untersperger, Chairman of Lenzing said in a statement this morning: "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," Mr Untersperger said.

All fibre production sites of the Lenzing Group were fully utilized and partly achieved new records in production and shipment. The increase in raw material prices was largely, but not fully passed on to the market. The ongoing capacity expansion programs at almost all fibre production sites will relieve the demand-driven pressure on production in the course of 2011/12 to a certain extent.

The fourth quarter is also expected to show a continuation of the dynamic market improvement and excellent results in Lenzing’s core fibres business. Lenzing says its fourth-quarter fibre capacity has already been largely sold. The company also says it will continue its long-term and fair pricing policy of recent months and years, even under the given positive framework conditions.

“A product mix further improved by favouring special fibres with attractive margins, increased fibre and pulp production capacity and a very good internal cost structure lead to the expectation that the 2010 business year, despite the currently tight raw material price situation, will provide a new record result for the Lenzing Group,” the statement said.