Austrian firm Lenzing Group forecasts EBITDA of €300 mn for FY23

24 Jan '24

2 min read

Pic: Lenzing

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Specialty fibres supplier Lenzing Group forecasts an EBITDA of around €300 million for FY23.
However, the company faces a projected asset impairment up to €480 million due to economic uncertainties, higher raw material and energy costs, and increased interest rates.
These non-cash impairments will not affect the full-year EBITDA but will impact EBIT.

Austria’s Lenzing Group, a leading global provider of specialty fibres for the textile and nonwovens industries, expects EBITDA of around €300 million for financial year 2023 (FY23), which is within the previously estimated range of €270 million to €330 million. However, the annual valuation of assets in accordance with IFRS for the entire Lenzing Group has resulted in a projected asset impairment of up to €480 million for FY23.

The reasons for the impairment requirements are, on the one hand, continued uncertainties in the economic environment and, on the other hand, still increased raw material and energy costs as well as a higher interest rate environment, the company said in a press release.

The impairment losses are non-cash effective and have no impact on the full-year EBITDA for FY23, but do affect EBIT for FY23.

“In the third quarter of FY23, we responded to the persistently difficult market environment and launched a comprehensive performance programme, which we have been consistently implementing since then with a focus on positive free cash flow and stronger sales and margin growth. We can therefore confirm our earnings forecast with an EBITDA of around €300 million. The valuation adjustment in accordance with IFRS does not change the strategic orientation of the Lenzing Group,” said Stephan Sielaff, chief executive officer of the Lenzing Group.

“The implementation of the performance programme is going according to plan. In the future, cost measures alone are expected to contribute more than €100 million to earnings annually, of which more than €50 million will already be effective for the financial year 2024. We are on target, particularly in terms of strengthening free cash flow, and we also achieved positive free cash flow in the fourth quarter. The revaluation of assets is now consistent and the right step for the future direction,” said Nico Reiner, chief financial officer.

The 2023 annual results will be presented on March 15, 2024.

ALCHEMPro News Desk (DP)

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