Lenzing falls into red in 2014

Lenzing is having a difficult time returning to form. According to its interim results, the Austrian cellulose fibers specialist saw its sales fall by 2.62% to 1.86 billion euros. The company even issued a profit warning, pending the publication of its report in three weeks. It is expected to post losses of at least 14 million euros. Meanwhile, it reported an EBITDA of about 240 million euros, up 25%.

Lenzing has also depreciated the value of certain subsidiaries to the amount of about minus 94 million euros.

Lenzing is being forced to cope with the falling prices of fibers, caused by the global production surplus. This coming after the company had already invested in its production capacity in Indonesia through PT South Pacific Viscose, and in China via Lenzing Nanjing Fibers. It has suddenly been forced to adjust its development projects - so much so that the company once more announced a streamlining of its assets in response to the slowdown in Asian demand.

This profit warning comes following the announcement at the end of 2014 of the elimination of 250 positions out of the 6675 hitherto at the company. The measure concerned a third of temporary contracts, targeting the production sites the most affected by falling sales. The company already experienced a difficult year in 2013, with a 8.7% fall in sales.

Lenzing falls into red in 2014

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