COLOGNE, Germany—Lanxess A.G.'s net income doubled despite a 5.8 percent decrease in sales for the first quarter of 2016.
The firm's net income increased to $60.5 million, up from about $25.1 million in 2015. Sales decreased to about $2.19 billion, down from $2.33 billion.
Lanxess linked the earnings gains to higher volumes, increased capacity utilization, positive currency effects and the absence of ramp-up costs for new rubber plants in Asia last year. The decrease in sales resulted from its adjustment in selling prices to reflect lower raw material prices.
“We started fiscal 2016 with a good first quarter and the second quarter has begun well. For this reason, we are raising our guidance for the full year,” Lanxess CEO Matthias Zachert said in a statement.
The Colonge-based chemicals company raised its earnings forecast for the full year to between about $1.03 billion and $1.08 billion, up from about $1 billion to $1.06 billion.
The firm also launched Arlanxeo, it's 50/50 joint venture with Saudi Aramco to produce synthetic rubber. Lanxess carved out its Tire & Specialty Rubbers and High Performance Elastomers business units to form the $3.1 billion segment. Lanxess received about $1.3 billion from Saudi Aramco in the deal.
Arlanxeo's sales fell by about 11 percent to $689.4 million, which Lanxess attributed to lower raw material prices causing lower selling prices.
Sales did not increase across Lanxess' other three segments, though its Performance Chemicals segment's $608.3 million were flat compared to 2015. High Performance Materials dropped 7 percent to $311.6 million and the Advanced Intermediates declined 3 percent to $528.5 million.