DUSSELDORF, Germany (April 4) — Lanxess A.G.´s performance rubber business improved its operating profit last year 74 percent over 2004 while reporting 17.3-percent higher sales.
The improvements, to $265.8 million and $2.08 billion, respectively, translate into an earnings/sales ratio of 12.8 percent, a full four-percentage-point jump over 2004. The company is aiming to achieve an average pre-tax earnings/sales ratio of 9 to 10 percent across its whole operations, putting the rubber sector as one of the company´s most profitable.
The unit´s revenue increase was attributable entirely to higher selling prices; the volume of rubber sold fell 1.5 percent from 2004.
The company said this improvement came as a result of its "price before volume" strategy in which the company chose to decline contracts at less than profitable prices.
Overall, Lanxess reported a net loss of $78.3 million for the year. Lanxess points out, however, that it reduced net indebtedness by $565 million during the year and intends to pay a dividend to shareholders for the first time.