Global market leader in wood-based cellulosic fibers, the Lenzing Group posted a 25.7 per cent Y-o-Y revenue growth Q1, FY’22. Group revenue grew to €615 million, during due to a rise in demand for wood-based biodegradable specialty fibers and higher fiber prices. The group’s earnings before interest, tax, depreciation and amortization (EBITDA) decreased 7 per cent year-on-year to €88 million. Its EBITDA margin reduced from 19.3 to 14.3 per cent. Lenzing reported a 14.3 per cent growth in net profit for the quarter. Profit surged to €34.1 million, while earnings per share increased to €0.87.
Like the entire manufacturing industry, the Lenzing Group too was significantly affected by the extreme developments in global energy and commodity markets during the quarter. However, the group continued to focus on specialty fibers like Tencel, Lenzing Ecovero and Veocel that along with a positive market environment helped ensure a solid revenue and earnings trend. Gross cash flow increased 2 per cent to €86 million during the quarter. Cash flow from operating activities decreased 28.5 per cent to €79.7 million. The group continues to launch climate-neutrality initiatives across operations.
In 2019, Lenzing set a target to reduce its carbon emissions by 50 percent by 2030 and to become climate neutral by 2050. It also plans to generate electricity from renewable energies in future. Currently the group is involved in the construction of several photovoltaic systems at its site in Upper Austria.
Global economy is forecast to grow 3.6 per cent in 2022, predicts IMF. Currently, the manufacturing industry is being challenged by the deep recession caused by COVID-19, the Russia-Ukraine, global supply chain constraints, etc. Liquidity crisis are expected to persist in all regions relevant to Lenzing.
Lenzing also expects demand for environmentally responsible fibers for the textile and clothing industry as well as the hygiene and medical sectors to grow. However, the market remains challenged due to the rising energy and raw materials costs as well as disturbances in the supply chain.
