In the first quarter of 2020, the revenue of the Lenzing Group declined by 16.7 percent in comparison with the prior-year quarter and amounted to EUR 466.3 million. The main reason was the development of prices for standard viscose and other standard fibers. The impact of the COVID-19 crisis further increased pressure on prices and volumes. The prices for standard viscose dropped to a new all-time low of 9,150 RMB/tonne by March 31 – up to 33 percent lower than in the prior-year quarter.
The comparatively positive development of the specialty fiber business and slightly higher demand for fibers in the medical and hygiene segments partially offset the decline in revenue. The share of specialty fibers increased from 47.3 percent in the first quarter of the previous year to 60.9 percent. The earnings development reflects the decline in revenue: EBITDA (earnings before interest, tax, depreciation and amortisation) decreased by 24.3 percent to EUR 69.6 mn. The EBITDA margin declined from 16.4 percent to 14.9 percent. Net profit for the period was down 58.6 percent to EUR 17.7 mn. Earnings per share amounted to EUR 0.84 compared with EUR 1.65 in the first quarter of the previous year.
Lenzing also implemented two most important long-term investment projects to strengthen internal pulp supply and to increase the share of specialty fibers in line with the sCore TEN corporate strategy is progressing according to plan. After the decision to build the dissolving wood pulp plant in Brazil with a capacity of 500,000 tonne, the Duratex Group acquired a 49 percent share in the joint venture LD Celulose as agreed in the first quarter of 2020. Lenzing holds 51 percent of the shares.
In the first quarter of 2020, Lenzing completed the second pilot production plant for its TENCEL™ Luxe branded filament yarn. The new facility at the Lenzing site with a total investment of EUR 30 mn provides sufficient capacity for the development of commercial programs and further fiber applications.