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May 12 (Reuters) – German speciality chemicals maker Lanxess raised the floor of its 2021 profit guidance range on Wednesday, driven by a further increase in demand, especially from the auto industry.
The Cologne-based group now expects 2021 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 950 million to 1 billion euros ($1.15-1.21 billion), hiking the lower end from its previous forecast by 50 million.
Strong demand for disinfectant ingredients in the pandemic has helped Lanxess, whose rivals include Dutch-based Akzo Nobel and Germany’s BASF, offset a slump in the auto sector, which makes up about 20% of its sales.
But the economic rebound in China – the world’s biggest automobile market – has now helped the car industry to recover faster than expected.
“Now we are focusing on our growth course and are doing everything we can to ensure that our new businesses quickly develop their full potential,” Chief Executive Officer Matthias Zachert said in a statement.
The group, which kicked off the year with three acquisitions including a $1.1 billion deal to buy U.S.-based rival Emerald Kalama Chemical, said in March it would keep looking for new deals in high-margin consumer markets such as food ingredients and animal hygiene.
Its quarterly EBITDA excluding one-offs fell 1.2% to 242 million euros, but beat analysts’ average estimate of 235 million in a company-provided poll.
The company said the decline was due to a strong comparison period that saw only a limited impact from the pandemic.
German peer Evonik said last week it expected a “brilliant” first half thanks to increasing demand in the coatings and auto sectors.
Lanxess’ shares have risen 1% this year, trailing rivals and the German mid-cap index, though still trading above pre-pandemic levels.
$1 = 0.8249 euros Reporting by Milla Nissi and Linda Pasquini in Gdansk. Editing by Mark Potter
