Lanxess sees 2021 profits at lower end of range, warns on costs

This post was originally published on this site

The group said that due to cost increases, strained supply chains and power rationing in China, its underlying core earnings (EBITDA) would be at low end of the earlier forecast range of 1 billion to 1.05 billion euros.

Lanxess, which makes a fifth of its sales from the auto industry, said it had so far managed to largely pass on the sharp rise in raw material prices by adjusting selling prices amid global materials shortages.

“However, the unprecedented increase in energy, raw material and freight costs is not leaving us unscathed. We expect the cost pressure to even increase in the fourth quarter,” Chief Executive Officer Matthias Zachert said in a statement.

The Cologne-based group reported underlying EBITDA of 278 million euros for the July-September period, slightly above analysts’ average estimate of 276 million euros ($319.72 million) in a company-provided poll.

Germany’s BASF, the world’s largest chemicals maker by sales, last month raised its 2021 earnings guidance as large industrial customers readily accepted marked-up prices for basic chemicals.

Lanxess’ shares have dipped 5% this year, lagging rivals and the German mid-cap index which has risen 14%.

($1 = 0.8633 euros)