In the first half of 2020, the Lenzing Group said that it faced a historically difficult market environment with increased pressure on prices and volumes resulting from the Covid-19 crisis. The company said in a statement that immediate effects of the Covid-19 crisis further increased price pressure on textile fibers across the entire product range resulting in revenue decline of 25.6 percent to 810.2 million euros in the first half of 2020.
In addition to price effects, Lenzing said, slightly higher demand for fibers in the medical and hygiene segments reduced the losses, but could not offset them. EBITDA fell by 46.6 percent to 96.7 million euros, while the EBITDA margin decreased from 16.6 percent to 11.9 percent. Net profit for the period amounted to 1.5 million euros compared to 78.8 million euros and earnings per share to 0.06 euro compared to 2.97 euros in the first half-year of 2019.
“The Covid-19 crisis has an impact on the entire textile and apparel industry and further increased the price and volume pressure on the global fiber market. Likewise, Lenzing was also confronted with this historically difficult market environment,” said Stefan Doboczky, Chief Executive Officer of the Lenzing Group, adding, “Strategically, we are still fully on track and the implementation of our key projects in Thailand and Brazil is progressing according to plan. The successful conclusion of the financing agreements for the construction of the pulp plant in Brazil was a highlight of the first half of the year.”
For 2020, Lenzing added, the International Monetary Fund currently projects the greatest recession of the global economy in the course of a century. Global economic output is expected to contract by 4.9 percent in 2020. The company assumes that the revenue generation and operating performance of the remaining two quarters will exceed those of the second quarter.
Picture:Lucie Maceczková for Lenzing Biocel Paskov a.s.