Lanxess shares slide as German chemicals company forecasts moderate improvement from 'crisis' year

By Steve Goldstein

Shares of Lanxess slumped in early action Thursday, after the German chemical company said this year won't be that much better than one marked by multiple crises.

"2023 was a year of multiple crises for the German chemical industry: Weak demand in numerous customer industries and market regions combined with inventory reduction by customers, high energy prices in Germany, and geopolitical tensions," said Lanxess, which reported a 45% drop in earnings before interest, tax, depreciation and amortization before exceptional items to EUR97 million, on a 27% fall in revenue to EUR1.44 billion.

Analysts polled by Visible Alpha expected adjusted EBITDA of EUR94 million on revenue of EUR1.61 billion.

Germany's chemical industries has been rocked as Russia cut off cheap gas to Europe's largest economy.

From the archive: Inside Germany's industrial-sized effort to wean itself off Putin and Russian natural gas

For the year, Lanxess's EBITDA pre-exceptionals declined 45% on a 17% decline in sales.

The Bayer spinoff expects EBITDA pre-exceptionals for 2024 to be "moderately higher" than 2023's EUR512 million but below the average level of previous years. Analysts had forecast adjusted earnings of EUR635 million.

Lanxess shares (XE:LXS) slumped 10% and have declined 34% over the last 52 weeks.

"German chemistry and we at Lanxess have never seen a year of crises like this before. But we are doing all we can to make it through this phase as stably as possible and to be in the best possible position when times improve again," said CEO Matthias Zachert in a statement.

The company cut its dividend to 0.10 euros per share from 1.05 euros and said it would shed 870 jobs.

-Steve Goldstein

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03-14-24 0451ET

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