The listed fiber manufacturer Lenzing has improved significantly operationally in the first three quarters with slightly increased sales, but ultimately made a loss of 111.1 million euros – after minus 96.7 million euros in the first three quarters of 2023. This is due to a one-off tax expense in the third quarter after the entry of the Brazilian pulp company Suzano, which caused the B&C holding’s shareholding to fall to less than 50 percent Lenzing with.
This year, sales revenue increased by five percent to two billion euros in the first three quarters compared to the same period last year. This increase is primarily due to higher sales of fibers (plus 10.9 percent).
The operating result before depreciation (Ebitda) increased by 20.3 percent to 263.7 million euros in the first three quarters. The Ebitda margin improved from 11.7 to 13.5 percent. The operating result (EBIT) was 38.3 million euros (after minus 10.5 million euros), the EBIT margin was two percent (after minus 0.6 percent). The loss before taxes (EBT) amounted to 33.4 million euros, after minus 86.9 million euros in the same period of the previous year.
“Die Lenzing-Group continues its recovery course,” said new CEO Rohit Aggarwal on Thursday: “We continue to ensure strict cost management and focus on strengthening our global sales.”
The net loss reportedly increased due to a tax effect. This is due in particular to the departure from the Austrian tax group following the entry of the Brazilian pulp company Suzano and the fall in the shareholding of the B&C holding below 50 percent. In the course of this I have Lenzing-In accordance with the group levy agreement, the group was required to pay a tax levy to the group parent in the amount of 25.8 million euros, which was recorded as a one-off expense in the third quarter. In addition, the result was burdened by one-off currency effects.
Cash flow from operating activities was 287 million euros in the reporting period, after 61.1 million euros in the first three quarters of 2023. Free cash flow improved from minus 138.2 million to plus 191.8 million euros.
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**Interview with Rohit Aggarwal, CEO of Lenzing**
**Editor:** Welcome, Rohit. Thank you for joining us today. Lenzing has shown remarkable operational improvements in the first three quarters of 2023 despite facing a net loss. Can you elaborate on the key factors behind this loss?
**Rohit Aggarwal:** Thank you for having me. Yes, while we did report a net loss of 111.1 million euros, it’s important to contextualize that figure. The loss largely stems from a significant one-time tax expense triggered by the entry of the Brazilian pulp company, Suzano, which affected our shareholding structure. This led to a mandatory tax levy of 25.8 million euros.
**Editor:** Despite this setback, you’ve reported a five percent increase in sales revenue. What drove this growth?
**Rohit Aggarwal:** Absolutely. Our sales revenue reached two billion euros, largely propelled by a 10.9 percent boost in fiber sales. This reflects a strengthening demand for our products and shows our resilience in navigating challenging market conditions.
**Editor:** The EBITDA margin also saw an improvement. What strategies have you implemented to achieve this result?
**Rohit Aggarwal:** We are focused on strict cost management and enhancing our operational efficiency. Our EBITDA increased by 20.3 percent to 263.7 million euros, which is a testament to our commitment to cost control while pursuing growth strategies globally.
**Editor:** Lenzing’s cash flow from operating activities has significantly improved as well. Can you share more about this?
**Rohit Aggarwal:** Certainly! We’ve seen cash flow from operating activities rise to 287 million euros from just 61.1 million euros in the previous year. This improvement indicates that our operations are increasingly generating cash, allowing us to fund our growth initiatives and strengthen our financial position.
**Editor:** Looking ahead, what are your key priorities for Lenzing as you move into the next quarters?
**Rohit Aggarwal:** Our primary focus will be on continuing our recovery and reinforcing our global sales strategy. We are committed to improving our operational performance further while managing costs effectively. The health of our operational cash flow and strengthening our market position are pivotal as we navigate through the remainder of the year.
**Editor:** Thank you, Rohit, for sharing these insights. We look forward to seeing how Lenzing progresses in the coming months.
**Rohit Aggarwal:** Thank you for having me!
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