The Lenzing Group significantly improved earnings in the first half of 2016 compared with the same period a year ago, with the fiber company crediting its new SCore Ten group strategy and a focus on its eco-friendly specialty fibers.
Lenzing said consolidated earnings before interest, tax, depreciation and amortization improved 54.3 percent to 195.1 million euros, or $220.25 million at current exchange, boosting the EBITDA margin to 18.9 percent compared to the prior-year level of 13.2 percent.
Consolidated revenue in the first half rose 8.3 percent to 1.03 billion euros, or $1.16 billion, attributable to higher fiber selling prices and an “attractive product mix” compared to the first half of 2015. Lenzing said it also profited from an increase in spot market prices for viscose fibers.
Earnings before interest and tax more than doubled to 129.7 million euro, or $146.42 million. The EBIT margin increased to 12.5 percent, up from 6.3 percent in the previous year. Net profit for the period increased 83.9 percent to 94.6 million euro, or $106.74 from 51.4 million euro, or $58 million.
“The Lenzing Group looks back at a very successful first half-year 2016,” said Stefan Doboczky, chief executive officer of Lenzing AG. “On the one hand, we benefited from a positive market environment. On the other hand, we continued our implementation of SCore Ten, our new group strategy, in a very disciplined and intense fashion. We further optimized the product mix and profited from higher selling prices thanks to ongoing strong demand for all Lenzing fibers. All this was clearly reflected in our half-year 2016 business results and therefore we also expect a substantial improvement of our business performance for the full year compared to 2015.”
Earlier this month, Lenzing said it was expanding production capacities for specialty fibers by 35,000 tons by 2018 with an investment program amounting to 100 million euros, or about $113 million. The capacity increase will be mainly carried out at the Austrian sites in Heiligenkreuz and Lenzing, Austria.
Lenzing has also developed a new generation of Tencel fibers using cotton fabric waste as a key raw material. This product combines the benefits of the environmental friendly production process of Tencel fibers with an innovative raw material concept based on recycling. Inditex is the first retailer testing this innovative fiber.
All Lenzing fibers — Tencel, modal and viscose — are derived from wood pulp and are manufactured in a closed-loop production system.
Lenzing said it expects a good market environment for the global fiber industry in the second half of 2016. The market for wood-based cellulose fibers is currently developing, especially favorably due to strong demand at stable supply.
Lenzing said it expects “excellent business results in the financial year 2016” and “a substantial earnings improvement” compared to 2015.