LNXSF - Lanxess plunges in Europe after cutting guidance on expected weak demand

2023-06-20 09:42:57 ET

Lanxess ( OTCPK:LNXSF ) ( OTCPK:LNXSY ) -13.7% in Frankfurt trading Tuesday after cutting its FY 2023 outlook and saying it expects Q2 earnings will came in below market expectations due to weak demand from its industrial customers and the effects of continued customer destocking.

The German chemical company said it now sees Q2 pre-exceptional EBITDA at ~€100M ($109.2M), after saying previously it expected Q2 EBITDA roughly on par with €189M it made in Q1.

Lanxess ( OTCPK:LNXSF ) ( OTCPK:LNXSY ) expects weak demand trends will continue in this year's H2, so it cut full-year estimates for pre-exceptional EBITDA of €600M-€650M after previously forecasting FY 2023 pre-exceptional EBITDA of €850M-€950M.

"The demand recovery we originally expected in the second half is not yet visible... in China nor in other meaningful end markets," CEO Matthias Zachert said, adding that Germany is not competitive in times of weak demand.

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