COLOGNE (dpa-AFX) - After a slump in profits in 2023, Lanxess intends to slightly increase its operating result in the new year, also thanks to cost reductions. The reduction of inventories at customers, with the exception of agrochemicals, should be completed, said CEO Matthias Zachert in a statement on Thursday. Nevertheless, the environment remains difficult for Kolner, at least in the first half of the year, and a moderate increase in sales is expected from the second quarter onwards. According to the statement, the ongoing cost-cutting program should also provide a tailwind. The share came under pressure in the morning.

The share price fell by around 8 percent to 24.09 euros. The latest attempt at recovery thus appears to be over for the time being; the share price is set to fall again by around 15 percent in 2024. The shares have already fallen significantly in each of the past three years.

Although the Group achieved the average analyst estimate with its operating profit in 2023, experts had previously expected a significant recovery of almost a quarter for 2024.

However, the MDax-listed company itself is aiming for earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for special effects to be moderately higher in 2024 than the EUR 512 million achieved in 2023. In 2023, operating profit had fallen by 45%. Turnover fell by 17% to 6.7 billion euros.

Weaker demand and higher idle capacity costs had a significant negative impact on the Specialty Additives and Advanced Intermediates divisions in particular. Specialty Additives, for example, with its focus on plastic additives and flame retardants, felt the effects of the construction, electronics and automotive industries' reluctance to invest. In the Advanced Intermediates segment, Lanxess bundles its businesses relating to chemical intermediates for industry and for the production of chemical precursors. Demand from the construction industry was particularly weak here.

Meanwhile, earnings in the Consumer Protection segment, which focuses on material protection and preservatives as well as materials for water treatment, declined comparatively moderately. The contribution of the Microbial Control business unit acquired from IFF in mid-2022 also had a positive effect here.

Overall, the net profit increased significantly to 443 million euros. However, the increase was due to proceeds from the establishment of the plastics joint venture Envalior.

In continuing operations, on the other hand, the bottom line was a minus of 843 million euros. This was also due to special write-downs. At the end of February, Lanxess had already reported high impairments on goodwill from earlier acquisitions in the Flavors & Fragrances and Polymer Additives divisions due to the bleak chemical industry environment. In addition, there was an impairment on Envalior. As announced in November, the dividend will fall from EUR 1.05 to EUR 0.10 per share.

In 2024, Lanxess CEO Zachert is now hoping for support from a savings program launched in 2023. This includes one-off, short-term savings. EUR 100 million were achieved in 2023 through cost reductions and reduced investments. The company also wants to become leaner, including through job cuts. This should permanently reduce annual costs by around 150 million euros from 2025.

90 million of this is to be achieved in 2024, with the remaining 60 million to be achieved in 2025. The costs for the savings program amount to around 80 million euros. This is also likely to include severance payments for the planned reduction of 870 jobs, 460 of which are in Germany. The corresponding contracts have already been signed for the majority of the job cuts, as Lanxess announced on Thursday./mis/niw/men