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Lenzing Drops on Forecast 2012 Profit to Fall From Record

March 22 (Bloomberg) -- Lenzing AG, an Austrian maker of cellulose fibers, dropped in Vienna trading after saying 2012 profit won’t top last year’s record because of the global economic slowdown.

“The year 2012 won’t be another record year” due to lower prices, Chief Financial Officer Thomas Winkler told journalists in Vienna today.

The company forecast earnings before interest, tax, depreciation and amortization in a range of 400 million euros ($527 million) to 480 million euros, compared with 480 million euros in 2011. The average of five analysts’ estimates compiled by Bloomberg is 436.6 million euros. First-quarter Ebitda may decline as much as 22 percent, Winkler said, adding that the period will probably be the “weakest” of the year.

Lenzing, whose fibers compete with cotton, said additional capacity introduced last year will boost revenue in 2012. The company forecast sales of 2.2 billion euros to 2.3 billion euros, topping an average analyst estimate of 2.1 billion euros.

The cellulose fiber maker can sell its products, made mostly from wood, at higher prices when cotton rises. Lenzing, based in the town of the same name, expects to benefit from high cotton prices for the long term as farmers switch to other more profitable crops, reducing cotton supply.

Lenzing fell 3 percent to 81.50 euros at the 5:30 p.m. close in Vienna, the biggest drop since Feb. 16, making it the worst performer in the 42-member Bloomberg EMEA Chemicals Index, which was 0.9 percent weaker. That curbed the share’s increase this year to 27 percent.

Income Soared

Net income soared 63 percent to 258.7 million euros last year as production and prices rose, the company said in a statement today. That’s in line with the average estimate of 259.3 million euros of four analysts surveyed by Bloomberg. Revenue gained 21 percent to 2.14 billion euros. Lenzing proposed increasing its dividend to 2.50 euros a share from 1.55 euros last year.

Lenzing reduced its debt by almost half to 159 million euros at the end of the year. It will invest about 350 million euros this year, mainly in a new plant at its Lenzing headquarters, and in new capacity in India, it said.

Majority owner B&C Industrieholding GmbH sold shares in a secondary public offering, reducing its stake, last year.

To contact the reporters on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net; Zoe Schneeweiss in Vienna at zschneeweiss@bloomberg.net

To contact the editors responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net; Frank Connelly at fconnelly@bloomberg.net

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