COLOGNE, Germany—Lanxess A.G. reported significant gains in sales for the second quarter of 2017.
The firm's sales increased about 30 percent to $2.93 billion. While net income came in at $3.53 million, a 96 percent drop. The reason for the steep decline was a one-time exceptional charge relating to its acquisition of Chemtura Corp. Adjusted for this charge, net income increased 75 percent to about $165.5 million, Lanxess said in its latest financial report released Aug. 10.
"Our growth strategy is paying off," CEO Matthias Zachert said in a statement. "Our strong operating performance and our profitable acquisitions are the basis for our strong results in the second quarter. The newly acquired Chemtura businesses are already making a significant earnings contribution, and the other areas of our specialty chemicals portfolio are also developing positively."
Zachert said Lanxess expects record earnings in 2017, but is anticipating slightly weakened momentum for the second half of the year.
Lanxess also rearranged its business structure, now reporting from five segments and 12 business units, thanks to the addition of Chemtura—a supplier of flame retardant and lubricant additives. The $2.57 billion deal closed April 21.
Segment-wise, the Arlanxeo joint venture with Saudi Aramco—which still houses its two rubber-related business units, Tire & Specialty Rubbers and High Performance Elastomers—reported a 24.6 percent gain in sales to $980.1 million. The unit cited its ability to pass on increased raw material costs as a primary factor, but this was partially offset by higher energy costs.
The firm restated certain segment figures to reflect its new structure. Its new Specialty Additives segment, which consists of its Rhein Chemie and its Additives units, reported $516.5 million in sales, a gain of 106.6 percent. Most of the growth was attributed to the newly acquired Chemtura businesses, but higher volumes also were a cause.
Its new Engineering Materials segment increased by 31.3 percent to $423.7 million. The segment consists of its High Performance Materials/plastics unit and its newly acquired Urethane Systems unit from Chemtura. The new business, higher volumes, higher selling prices and strong capacity utilization contributed to the positive developments for the quarter.
Its remaining segments—Advanced Intermediates and Performance Chemicals—reported gains of 14 percent to $592.7 million and 11.2 percent to $430.8 million, respectively.
Headquartered in Cologne, Lanxess employs 19,200 at its 75 production sites in 25 countries. The firm reported sales of $9.04 billion in 2016.