Severe crisis

Fiber giant makes a loss of almost € 600 million

Lenzing AG presented its figures for 2023 on Friday, which show a loss in the three-digit million euro range.(Bild: FOTOKERSCHI / KERSCHBAUMMAYR)

Cost reduction, optimization programs, staff cuts - these terms have been inextricably linked with Lenzing AG for months. On Friday, the fiber giant, which operates from Upper Austria, presented its figures for 2023. And they show a loss in the three-digit million range.

In January, Lenzing AG announced that it would be writing off around EUR 480 million due to existing uncertainties in the market environment and increased raw material and energy costs. CFO Nico Reiner called this a "correct step".

Turnover fell to 2.521 billion euros
When the figures for 2023 were announced on Friday morning, it became clear just how badly the fiber producer, which operates out of Upper Austria, had been hit. Turnover fell only minimally compared to 2022, dropping to 2.521 billion euros. The situation is different when it comes to earnings: while the company posted a loss of 37.2 million euros in 2022, these figures are now dark red. Lenzing AG puts the annual result at minus 593 million euros.

How does Lenzing AG explain this development? The annual report states that the expected recovery of the markets relevant to Lenzing has not yet materialized. Continued increases in raw material and energy costs on the one hand and very subdued demand on the other have had just as negative an impact on the Group's business development in the last financial year as on the industry as a whole.

500 jobs lost due to current cost-cutting program
By the end of 2022, a reorganization and cost-cutting programme had already saved more than 70 million euros, while a capital increase of around 400 million euros was carried out at the same time and loan terms were also extended. A so-called performance program is currently underway, which also entails the elimination of around 500 jobs. This will reduce costs by more than 100 million euros.