Lanxess tops Q3 estimates, but narrows annual earnings view

By Ozan Ergenay

Nov 5 (Reuters) - Speciality chemicals maker Lanxess LXSG.DE reported quarterly sales and earnings slightly above expectations on Thursday, helped by price hikes, but narrowed its annual earnings forecast as its core markets showed no broader recovery.

Its shares were up about 4% in early Frankfurt trade.

The Cologne-based company's third-quarter revenue rose 9.6% to €1.46 billion ($1.64 billion), compared to the €1.44 billion estimated in a company-provided poll.

It said the increase was driven mainly by price hikes to pass on higher raw material and energy costs.

Lanxess said it now expects its full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) pre-exceptionals at the upper end of €450 million to €500 million range, compared with its previous forecast of €450 million to €550 million.

The company's quarterly EBITDA pre-exceptionals rose by 11.2% to €139 million, compared with an estimate of €138.2 million.

It said its free cash flow reached €48 million from a negative €14 million a year earlier, adding that it also expected a positive figure in the fourth quarter.

However, CEO Matthias Zachert said demand remained subdued across several of the company's core markets, particularly agrochemicals, automotive and construction, adding that ongoing cost-cutting measures were helping to support earnings.

The German chemicals sector, the country's third-largest, has been struggling with weak demand, high energy costs, supply chain disruptions and a broader economic slowdown.

Lanxess also warned that economic uncertainty remained elevated, citing the Middle East and Ukraine wars.

The Middle East conflict has disrupted fuel and feedstock markets, driving up prices for the energy‑intensive chemical industry and prompting companies to raise their prices.

($1 = 0.8880 euros)