FRANKFURT (dpa-AFX) – The chemical company LANXESS disappointed the recently high market hopes for a stronger business recovery on Thursday. Lanxess boss Matthias Zachert expects operating profit to pick up in the second quarter, but industry experts had hoped for more. The share price plummeted.
The short fell by a double-digit percentage at the start of trading. Most recently, Lanxess was the biggest loser in the index of medium-sized stocks, the MDAX, with a loss of 8.75 percent to 16.48 euros.
The price also slipped out of the recently narrow trading range in which it had been stuck since the recovery towards the end of March. It had previously fallen to almost 11 euros in March – a low since the global financial crisis in 2009. The sluggish global economy and, more recently, increased competition from Asia are making life difficult for chemical companies like LANXESS.
Then there was the Iran war and with it the de facto closure of the Strait of Hormuz, through which around a fifth of world oil trade otherwise passes. However, since Asia in particular is dependent on deliveries from the Middle East, purchasing prices for chemical companies there are rising sharply, and there are sometimes supply problems. This in turn benefits manufacturers from Europe, who can continue to supply customers reliably and have even raised prices significantly.
In this environment, Lanxess expects further tailwind from the business recovery since March and is expecting an operating profit of 130 to 150 million euros for the second quarter. For analyst Chetan Udeshi from JPMorgan bank, however, there is a fly in the ointment. While the first quarter went better than feared, the outlook for the second quarter is in the middle of the range, 12 percent below the average market expectation and even 25 percent below its forecast.
Georgina Fraser from Goldman Sachs also criticizes the outlook for the second quarter. In view of this, business development needs to accelerate in the second half of the year so that Lanxess can meet market expectations for 2026 and reach the middle of its own forecast range for operating profit./mis/ag/stk
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