Currency effects, slightly higher sales volumes and an improved product mix were responsible for the revenue increase, the company reports. EBITDA improved by 37.7% to EUR 126.5 million, up from EUR 91.9 million in the previous year. The EBITDA margin was 13.2%, compared to 10.2% in the first half of 2014. Half-year EBIT amounted to EUR 60.5 million, or 86.7% above the comparable EBIT of EUR 32.4 million in the prior-year period.

Solid performance

“Lenzing delivered a solid performance in the first half of 2015. The underlying reasons were the currency effects which turned out to be very positive for us due to the weakness of the euro, good fibre demand in the second quarter and our improved cost position,” explained Stefan Doboczky, CEO and Chairman of the Management Board of Lenzing AG.

“Viscose fibre prices in China, the world’s largest sales market for fibres, increased towards the end of the second quarter due to a more favorable supply-demand ratio related to several local viscose fibre production plants being shut down for environmental reasons. We remain cautious concerning prospects for the rest of 2015, in light of the fact that these capacities could be put into operation again.”

Investment activity and saving strategy

Investment activity was cut back following the completion of the large Tencel fibre production facility in Lenzing in the previous year. Investments focused on necessary maintenance work as well as quality and optimization measures in fibre and pulp production. Lenzing is currently focusing on investments designed to optimize costs and quality.

The excelLENZ cost optimization initiative continued to be implemented in the first half-year according to plan and proved to be very successful. From today’s perspective the targeted effects of about EUR 160 million p.a. will be completely achieved.

Their full impact will be felt starting in 2016. The restructuring programme to adjust capacities of the technical units of Lenzing AG and the subsidiary Lenzing Technik, which was launched in the first quarter of 2015, is on schedule.

Ongoing market success with Tencel

Demand for Tencel used in jeans (denim) remained consistently strong, and the number of processors integrating Tencel into their denim fabrics has doubled over the last twelve months, the manufacturer reports.

Furthermore, the new Lenzing fibre Tencel A100 Micro was successfully launched on the market in the first half of 2015. Lenzing also further expanded its strong market position for nonwovens.

Outlook

The specific market environment for the man-made cellulose fibre industry improved somewhat in the middle of 2015 compared to the end of the first quarter. Solid volume demand up until now was followed by initial fibre selling price increases. The troubled geopolitical situation, the economic situation in China and unforeseeable exchange rate fluctuations are factors of uncertainty in the second half of 2015.

Despite a volatile environment, the Lenzing Group expects a further improvement in its operating results compared to 2014 as well as a further reduction in its net financial debt. Medium and long term growth rates in the man-made cellulose fibre industry are expected to be higher than that of the global fibre market, according to the company.

www.lenzing.com