Business

Lenzing Group Net Profit Touches €150.3 Million; Posts Best H1 Result In Its History

The Lenzing Group headquartered in Lenzing, Austria (Europe), has generated record highs in the first half of the 2017 financial year in terms of both revenue and earnings. The profit for this period has improved by 58.9% to €150.3 million, the textile and nonwovens cellulose fibres major has announced.

Consolidated revenue increased by 11% from the first half of the previous financial year to €1,149.1 million. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) were up 38.8% to €270.7 million, corresponding to an EBITDA margin of 23.6% in comparison to 18.9% in the prior-year period. Earnings before interest and tax (EBIT) increased by 57.4% to €204.2 million, resulting in a higher EBIT margin of 17.8% (H1 2016: 12.5%).

New developments

“The first half-year developed very well for the Lenzing Group, and we are pleased with the best half-year period in the company’s history. We will continue our disciplined implementation of the sCore TEN strategy. The expansion of new state-of-the-art production capacities for our specialty fibres is proceeding well and will support our customers in their own expansion efforts for products made of our botanic fibres,” said Stefan Doboczky, CEO of the Lenzing Group.

“The decision to set up a subsidiary and acquire a respective land plot in Thailand is the next step in the implementation of this strategy. On the innovation side, we are proud that after the introduction of Refibra branded lyocell fibres, we launched EcoVero. This is a particularly high-performance fibre featuring a very favourable ecological footprint and sets the new benchmark for the entire industry – from fibre to garment.”

Lenzing invests in Thailand

The Lenzing Group aims to increase the share of specialty fibres as a percentage of revenue to 50% by 2020. Following the expansions in Lenzing, Heiligenkreuz (both in Austria) and Mobile, Alabama (USA), the Supervisory Board approved the proposal of the Management Board at the end of June to choose Thailand as the next location for a state-of-the-art facility to produce Tencel branded lyocell fibres.

For this purpose, Lenzing is establishing a subsidiary in Thailand and purchasing a commercial property in an industrial park near Bangkok. In the coming months, the required permits and licenses, as well as technical planning, will be finalised.

Expansion of production capacities

The beginning of the construction phase to expand capacities for lyocell fibres was inaugurated at the end of March with the ground-breaking ceremony at the production site in Heiligenkreuz. As of the middle of next year, customers will have an additional 25,000 tonnes of specialty fibres at their disposal.

The first buildings are also already being built in Mobile in order to complete the new production facility for Tencel fibres by 2019. These construction projects were bundled at a Management Board level and assigned to the newly appointed Management Board member Heiko Arnold, who serves as Chief Technology Officer (CTO) of Lenzing AG.

Launch of EcoVero

In order to further underline its role as a pioneer in sustainability, Lenzing launched EcoVero, a high-performance fibre with a favourable ecological footprint that can be identified in finished products on the basis of its corresponding technology. In this way, Lenzing’s customers, partners as well as consumers are assured that their product consists of this fibre.

The introduction to the market of Refibra fibres, which combine pulp from scraps of cotton clothing and pulp from wood, proceeded well in the first half-year. In addition to Inditex, another 25 fashion brands are currently working on the development of collections made with this fibre, according to the company release.