Lanxess Quarterly Profit Beats Estimates on Brazil, China Demand

Lanxess AG (LXS), the German chemical maker spun off from Bayer AG (BAYN) in 2005, reported fourth-quarter earnings that beat analysts’ estimates on higher demand for synthetic rubber from markets such as Brazil and China.

Earnings before interest, taxes, depreciation, amortization and one-time items gained 1.2 percent to 174 million euros ($230 million) in the quarter from a year earlier, the Leverkusen- based company said today in a statement. Analysts surveyed by Bloomberg had predicted 164.8 million euros.

Chief Executive Officer Axel Heitmann is expanding capacity in Latin America and Asia to maximize growth and is interested in acquiring small- to medium-sized companies valued at as much as 1 billion euros, he said in January. The company forecast first-quarter operating profit to rise to as much as 350 million euros, it said today.

Fourth-quarter sales gained 16 percent to 2.12 billion euros and net income dropped 81 percent to 5 million euros, Lanxess said. Analysts had estimated revenue of 2.08 billion euros and net income of 24.3 million euros, a Bloomberg survey showed.

The maker of specialized plastics and tire rubber will increase its annual dividend payment to 85 cents a share, it said today. Profit fell in the fourth quarter as the company wrote down 35 million euros on the value of its inventories after raw-material prices decreased, especially for butadiene.

The supplier of materials to tiremakers including Pirelli & C. SpA typically targets markets where it can hold a leading position. The company spent about 420 million euros on acquisitions last year. It’s biggest purchases to date are Petroflex, a Brazilian maker of synthetic rubber for tires, tubing and plastics bought for $413 million, and DSM Elastomers BV, acquired for 310 million euros.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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