COLOGNE, Germany—Lanxess A.G. reported a 25.5 percent growth in sales, despite a 54.7 percent drop in net income.
The Cologne-based specialty chemicals company's sales came in at $11.9 billion, which Lanxess said was a record. And while net income dropped to $107.3 million, the firm attributed the decrease to significant one-time exceptional expenses largely stemming from the integration of Chemtura's businesses and consolidation of production networks.
"We achieved a lot strategically and operationally in the last fiscal year, laying firm foundations for the future," Lanxess CEO Matthias Zachert said in a statement. "With Chemtura, we successfully completed our biggest acquisition to date, and significantly improved the quality of our portfolio even more. In this set-up, we achieved the best earnings in Lanxess' history so far while further enhancing the group's profitability."
Lanxess said it invested about $678.3 million in its global plant network while continuing to achieve a greater regional balance of its business. North America increased its share of global sales to 19 percent, up from 17 percent, while Asia-Pacific increased to 28 percent from 26 percent.
The firm's Specialty Additives segment—which consists of its Rhein Chemie and Additives units—almost doubled its sales, increasing by 90.7 percent to $1.97 billion as a result of integrating Chemtura's additives business.
Engineering Materials increased its sales by 29.4 percent to $1.69 billion driven largely by the new urethanes business integrated from Chemtura. That business operates under the newly created Urethane Systems unit.
Arlanxeo, Lanxess' synthetic rubber joint venture with Saudi Aramco, increased its sales by 19.2 percent to $3.98 billion. Lanxess will begin reporting Arlanxeo as a "discontinued operation" beginning in the second quarter. Its four other segments—Specialty Additives, Engineering Materials, Advanced Intermediates and Performance Chemicals—will be grouped together as "New Lanxess."
Its remaining two segments, Advanced Intermediates and Performance Chemicals, experienced increases in sales to $2.43 billion and $1.6 billion, respectively.