Lanxess will get revenue increase as US clients top off forward of Trump presidency

By Ozan Ergenay

(Reuters) – German specialty chemical substances maker Lanxess (ETR:LXSG) mentioned on Monday it anticipated its fourth-quarter core revenue to exceed market expectations by greater than 20%, largely as a consequence of pre-buying by U.S. clients forward of Donald Trump’s inauguration given the specter of potential tariffs.

The corporate expects its earnings earlier than curiosity, taxes, depreciation and amortisation (EBITDA) pre-exceptionals for October-December 2024 to be round 159 million euros ($164 million), exceeding analysts’ forecast of 130 million, in line with a Vara consensus.

For all of 2024, the chemical substances group expects EBITDA, adjusted for particular gadgets, of round 614 million euros, additionally about 20% above the earlier yr’s stage and on the higher finish of its steering vary of 10-20% progress.

Shares in Lanxess, which makes high-end speciality chemical substances comparable to components, lubricants, flame retardants and plastics, had been up 6.4% in afternoon buying and selling.

“The fourth quarter was positively influenced by a stronger than anticipated December, particularly as a consequence of clients’ pre-buying,” the corporate mentioned in an announcement, flagging that the underlying macroeconomic surroundings had not improved.

“The beat was pushed by constructive pull-forward results forward of the inauguration of the U.S. president and never by a elementary enchancment in underlying demand. I due to this fact anticipate restricted adjustments to the 2025 consensus for the chemical firms,” mentioned Thomas Schulte-Vorwick, an analyst at Metzler Capital Markets.

He mentioned fourth quarter earnings of different chemical firms is also higher than anticipated due to the pull-forward results forward of Donald Trump’s inauguration, which takes place on Monday.

“It is a good indicator that volumes at German chemical substances producers might have been surprisingly sturdy in This autumn,” Sebastian Bray, an analyst at Berenberg, mentioned.

He mentioned the market could be targeted on indicators of whether or not quantity enchancment was sustainable in 2025, as Lanxess has highlighted pre-buying within the U.S. as a possible driver for its specialty additive and shopper safety product segments.

Lanxess will launch its full-year 2024 outcomes on March 20.

($1 = 0.9689 euros)