The annual evaluation of the valuation of assets in accordance with international accounting rules (IFRS) revealed a need for impairment of up to 480 million euros for the 2023 financial year, the company announced on Tuesday evening following the stock market closed.
The reasons for the special depreciation are, on the one hand, ongoing uncertainties in the economic environment and, on the other hand, continued increased raw material and energy costs as well as increased discount rates due to the changed interest rate environment.
The special depreciation is non-cash and, according to the release, has no impact on the full-year EBITDA for 2023, but does affect the EBIT for the 2023 financial year, as Lenzing explained.
The Lenzing board also specified the previous earnings forecast in the announcement. The company will therefore report an EBITDA of around 300 million euros in 2023. So far it was said that EBITDA would be between 270 and 330 million euros.
In the red since 2022
Lenzing slipped into the red in 2022 and has been in the red ever since. Last year, the group raised fresh money totaling 400 million euros through a capital increase and decided to cut 500 jobs worldwide.
Lenzing CFO Nico Reiner explained that the “performance program” – meaning the austerity program – was going according to plan. “In the future, an annual contribution to earnings of more than 100 million euros is expected from cost measures alone, of which more than 50 million euros will already be effective for the 2024 financial year,” said Reiner. The revaluation of the assets is “the right step for the future direction. Lenzing CEO Stephan Sielaff said that the depreciation did not change the strategic direction of the Lenzing Group.
