Lanxess Brings Forward Profit Goal on New Asia, U.S. Plants
Lanxess AG (LXS), the German chemical maker poised to join Germany’s benchmark DAX index, said it will reach its mid-term profit goal one year earlier than planned as new plants in Singapore, the U.S. and China boost revenue.
Earnings before interest, tax, depreciation, amortization and one-time items may reach 1.4 billion euros ($1.8 billion) by 2014, the Leverkusen-based company said today in an e-mailed statement. Lanxess, which had set that profit goal for 2015, also said it expects to lift earnings to 1.8 billion euros by 2018.
Lanxess is accelerating growth by expanding in faster growing markets, building synthetic rubber factories in Singapore and China as well as buying Brazilian rubber maker Petroflex. The company, spun off from Bayer AG (BAYN) in 2005 as a hodge podge of unprofitable units, has transformed itself by selling lower-margin commodity operations such as materials for paper, fibers and styrene plastics.
“We have transformed Lanxess into a growth company,” Chief Executive Officer Axel Heitmann said in today’s statement. “We will stick to our proven dual-track strategy of organic and external growth.”
The chemical today reiterated this year’s goal for operating profit to grow 5 percent to 10 percent from 1.15 billion euros in 2011.
Lanxess said earlier this month it will build a 235 million-euro plant for ethylene propylene diene monomer, or EPDM, used in car wiper blades and door sealants in Changzhou Yangtze Riverside Industrial Park. The investment comes on top of butyl and butadiene factories in Singapore scheduled to start production in 2013 and 2015 respectively.
The shares rose as much as 2.17 euros, or 3.3 percent, to 68.90 euros in Frankfurt. They have gained 70 percent this year for a market value of 5.6 billion euros.
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