Lanxess slips as investors stay cautious on chemicals recovery
Q1 core profit 101 mln euros vs forecast 97.7 mln
Expects positive trend to continue
Shares fell as much as 5.5% as investors stay cautious
Rewrites with share decline, CEO and analyst comments
By Ozan Ergenay
May 8 (Reuters) -Shares in Lanxess LXSG.DE fell as much as 5.5% on Wednesday, with some analysts pointing to caution about prospects for the speciality chemicals industry even as the German group reported a smaller than expected drop in first-quarter core profit.
The Cologne-based company posted earnings before interest, taxes, depreciation and amortisation (EBITDA) pre-exceptionals of 101 million euros ($108 million) for the first quarter.
That was down from 189 million euros a year earlier, but ahead of the 97.7 million euros forecast by analysts in a company-provided poll.
"We already see some further orders coming in, so we don't expect Q2 to be as tough as Q1," CEO Matthias Zachert told reporters during a news conference.
He added Lanxess also expected more demand from construction industry customers.
Chemical companies have been plagued by destocking for the past few quarters, but this trend is slowly coming to an end as companies are seeing demand pick up across the U.S., Europe and China.
Lanxess said it would achieve better results for the year as a whole than in 2023, but its shares were down 4.2% at 1300 GMT.
"We believe the overall guidance reflects the cautious view of the market and guidance revisions of last year are making investors additionally careful, and therefore we see this guidance as in-line with expectations," Baader Helvea analyst Konstantin Wiechert said in a note.
Lanxess forecast a 10%-20% increase in EBITDA pre-exceptionals for 2024, from 512 million euros in 2023.
($1 = 0.9311 euros)
Reporting by Ozan Ergenay; Editing by Sherry Jacob-Phillips and Mark Potter
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