Cost of material and purchased services rose by 16% to €607.3 million, mainly due to higher prices for energy, chemicals and other raw materials. Cost could not be fully passed on to the market. Moreover, and as expected, fiber prices started to decline in the third quarter. For this reason EBIT declined by 6% from €114.0 million to € 107.1 million. Higher cost of finance and volatility of the currency markets led to a financial result of €-18.4 million compared to €-7.9 million in the year-earlier period and EBT of €88.7 million versus €106.1 million in 2007. Period net income declined by 23% to €62.8 million from 2007’s €80.6 million.
Lenzing reported that fiber production operated at full capacity at all sites and stock levels currently are average. The textile fibers business unit reportedly had excellent sales results with Tencel and Lenzing Modal specialty fibers with international brand producers in sportswear and women’s wear. According to the company, it was well positioned in the new collections of leading Asian lingerie manufactures and its home textile business was gratifying. Overheated European demand in 2007 and the first quarter of 2008 was followed by more balanced supply and demand.
The continuing trend toward high-quality fiber products and specialty products is expected to enable Lenzing to maintain its global market leadership even through challenging times. Upcoming months are expected to bring an inevitable decline of fiber margins along with weaker growth. The company’s plastics segment will improve results by restructuring measures. Lenzing expects to achieve its second-best EBIT result in history despite the current difficult economic situation.