Lenzing back in the black (1998)

Lenzing has swung back into profit thanks to a good performance from its fibre and non-fibre related businesses.

Pre-tax profits were Sch222.9m ($18.7m) for the first three quarters, comparing favourably with a Sch242.2m loss for this period last year.

Turnover increased to Sch6.4bn in the first nine months of 1998 compared with Sch5.73bn in quarters one-to-three of last year.

Lenzing has warned that international financial turbulence has hit the world's textile fibre market, especially in Europe, where import pressure from Asian textiles is increasing.

Viscose consumption also declined, making market conditions difficult for the company in the US throughout the third quarter.

Cotton and polyester fibre prices are down, especially in Asia, and the company blames changes in fashion trends and a fall-off in Japanese demand for the underperformance of its Lenzing Lyocell fibre.

However, the company's Indonesian associate, South Pacific Viscose, is benefiting from favourable raw material prices, and achieving record production levels.

Despite the Lyocell setbacks, Lenzing forecasts satisfactory performance for the remaining quarter of 1998.

23 November 1998  [Source: ICB]