Lanxess Q4 core profit to beat estimates by over 20% on US buying

By Ozan Ergenay

(Reuters) -German specialty chemicals maker Lanxess (ETR:LXSG) said on Monday it expected its fourth-quarter core profit to exceed market expectations by more than 20%, largely due to pre-buying by U.S. customers.

The Cologne-based company expects its quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA) pre-exceptionals to be around 159 million euros ($164 million), exceeding market analysts’ forecast of 130 million, according to a Vara consensus.

The chemicals group also expects EBITDA, adjusted for special items, of around 614 million euros for 2024, about 20% above the previous year’s level and at the upper end of its guidance range of 10-20% growth.

“The fourth quarter was positively influenced by a stronger than expected December, in particular due to customers’ pre-buying,” the company said in a statement, flagging that the underlying macroeconomic environment had not improved.

“This is a good indicator that volumes at German chemicals producers may have been surprisingly robust in Q4,” Sebastian Bray, an analyst from Berenberg, told Reuters.

He said the market would be focused on indicators of whether volume improvement was sustainable in 2025, as Lanxess has highlighted pre-buying in the U.S. as a potential driver for its specialty additive and consumer protection product segments.

“We expect a positive share reaction,” analysts at Jefferies said in a note.

Shares in the company were up 5.6% in afternoon trading.

Lanxess will release its full-year 2024 results on March 20.

($1 = 0.9689 euros)