Lenzing AG (LNZ), an Austrian cellulose-fiber maker, fell to a three-year low in Vienna after cutting its profit forecast and announcing job cuts on weak prices.
The company dropped as much as 10 percent to 46.60 euros in the city, the lowest level since September 2010. Trading volume was more than seven times the three-month daily average.
Earnings before interest and taxes for the year will be 75 million euros ($100 million) to 85 million euros, Lenzing said in a statement late yesterday, down from an earlier forecast of 160 million euros. It will cut costs by 120 million euros a year from 2015, partly by reducing its staff of 6,772 by about 600.
“This is a big shock,” Stephan Trubrich, an analyst in Vienna at Kepler Cheuvreux who put his hold-rating on the stock under review today, said by phone. “It’s not clear yet what depreciations and one-offs there will be” from cost cutting.
Nine-month Ebit was 136.4 million euros, suggesting a fourth-quarter loss of 51.4 million to 61.4 million euros.
Lenzing faces competition from producers of cotton, which fell 16 percent to 78.1 cents a pound on ICE Futures U.S. in New York since reaching a 16-month closing high of 93.32 cents on Aug. 16. Cotton prices will drop further to 69.5 cents in a year, according to the median of 12 analyst estimates compiled by Bloomberg. Lenzing blamed high levels of cotton inventories as having “unfavorable effects on the entire fiber industry” as world output exceeds demand for a fourth straight year.
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