Lanxess flags persistent weakness, shares fall
Q3 sales of 1.60 bln euros miss market expectations
Q3 cash flow turns negative
Shares down as much as 5%
Expects subdued performance in Q4
Adds share move in paragraph 1,7, cash flow paragraph 2,
By Linda Pasquini and Jagoda Darlak
Nov 7 (Reuters) -Speciality chemicals maker Lanxess LXSG.DE on Thursday warned it expected a weak environment in the months ahead, sending its shares down as much as 5% after reporting third-quarter sales below analysts' expectations.
It also said its free cash flow turned negative in the July-September period at -14 million euros, a decline from the 83 million euros it reported in the second quarter.
The chemicals sector, Germany's third-largest industry that employs roughly half a million workers, continues to struggle as customers are reluctant to place new orders amid prolonged economic uncertainty that has kept raw materials and energy prices high.
"A broad-based recovery is not yet in sight,” CEO Matthias Zachert said in a statement.
Sales in the quarter remained stable at 1.60 billion euros, missing analysts' forecast of 1.66 billion.
The company confirmed its annual guidance for EBITDA pre-exceptionals to grow 10%-20% in 2024. It, however, anticipates a subdued performance in the fourth quarter due to the seasonal nature of the business.
The shares were down 4.9% to 24.42 euros at 0852 GMT.
Quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) pre-exceptionals rose 45.4% to 173 million euros ($185.85 million), surpassing analysts' consensus forecast of 169 million euros in a poll by Vara Research.
The beat was driven by higher volumes, cost savings and a more efficient management of its production plants, Lanxess said.
($1 = 0.9308 euros)
Reporting by Linda Pasquini and Jagoda Darlak in Gdansk, Editing by Rachel More, Mrigank Dhaniwala, Elaine Hardcastle
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