The shares of German chemical company Lanxess (LXS.DE) are trading down 16% today in the face of the earnings warning issued. Moreover, the scale of the sell-off in the company's shares spoils the mood among the larger players listed on the DAX index and the entire chemical company sector on the Old Continent.
Lanxess shares themselves have today slid to their lowest levels in three years. The company decided to lower its operating profit forecasts for the second quarter and full year, reporting that it does not see a recovery in demand in June. Lanxess is not seeing an increase in order volumes for (the third quarter; excluding China), the company revealed. Such a situation puts enormous pressure on the company, as the projected positive impact of improving business dynamics in China may not help the company at all. Moreover, this is a relatively bad prognosis for other companies in the sector, such as BASF (BAS.DE), Evonik (EVK.DE) and Wacker-Chemie (WCH.DE).
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The entire European chemical sector is under downward pressure today. Source: xStation5
The company expects EBITDA in the second quarter to be around €100 million ($109 million). Previously, profits were expected to be "about the same" as in the first quarter, which was €189 million.
For the full 2023, EBITDA is expected to be in the range of €600 million to €650 million, compared to the previous forecast of €850 million to €950 million.
Investment bank analysts commenting on the news regarding Lanxess' forecasts mentioned that the dimension of these revisions could significantly affect the entire chemical sector. The company will report its second quarter results on 4 August.
The shares of Lanxess (LXS.DE) open today's session with a sizable bearish price gap and descend to levels not seen in three years. Source: xStation5
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