As trading conditions remained “difficult,” Lanxess (Leverkusen / Germany; www.lanxess.com) saw EBITDA pre-exceptionals drop 50% to EUR 112m in the second quarter of 2009 against the 2008 period. Sales revenue declined by 30% to EUR 1.2 bn. Although the figures were in line with previous guidance as well as analysts’ expectations, the share plunged by more than 5% on the news.

Speaking at a telephone conference, CEO Axel Heitmann said that, since Lanxess has been “heavily impacted” by the economic crisis, a comparison with the same period of the last year “doesn’t really say much about our current business performance.” This was substantially better than in Q1 2009, he said. EBITDA pre-exceptionals in Q2 rose 70% against the previous quarter, thanks mainly to higher Asian demand, and sales increased 17%. Net income was positive at EUR 17m after a net loss of EUR 14m.

In a year-on-year comparison, EBITDA pre-exceptionals in the Performance Polymers segment, including engineering plastics and synthetic rubber, fell nearly 60% to EUR 59m. This is attributed in part to the high cost of idling capacity as well as continued inventory reductions. Sales revenue dropped 38% to EUR 559m. All parts of the business were hit by the 24% decline in volumes against Q2 2008, but Heitmann sad the “marked downtrend” seen early this year eased in the second quarter.

While business with intermediates for semi-crystalline polymers was “relatively steady,” demand from the automotive industry for PA compounds remained weak. The company had to reduce prices – by 19% on average – for many polymer products to adjust for lower raw materials costs. Figures for Performance Polymers in the first half year show a 74% drop in EBITDA and a 37% decline in sales.

As an extension of the “Challenge09” scheme, which will save EUR 250m in costs in 2009 and 2010, Lanxess is launching “Challenge12”, with an expected global savings volume of EUR 100m. Heitmann said both plans emphasise the flexible asset management concept, in which employees from idled plants are delegated to other company facilities. Reduced working hours at reduced pay remain in effect for all non-managerial employees. Managers will receive no annual pay increases this year and will also forego bonuses. A retraining centre is being set up for German workers whose skills are no longer needed.

Lanxess declines to give a forecast for full year 2009, due to “considerable uncertainties.” However, Heitmann commented that there are “signs of a slight recovery” in Asia and that North American business is no longer deteriorating. The company does not anticipate any further effects from destocking by customers this year nor does it expect to benefit from inventory replacement as previously hoped.