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Lanxess cuts top end of its annual profit outlook

FILE PHOTO: A logo of Lanxess is seen next to dark clouds at Cologne Bonn airport

By Linda Pasquini

(Reuters) - German speciality chemicals maker Lanxess on Wednesday cut the top end of its forecast range for annual profit, saying it expects sales volumes to drop on weaker demand.

The company, which reported third-quarter results in line with expectations, added that passing higher energy and raw material costs on had become more challenging as customers were also dealing with high inflation.

Lanxess' shares were down 3.2% in early trade.

The Frankfurt-listed group now expects full-year core profit(EBITDA) pre-exceptionals to be come in between 900 million euros and 950 million euros ($905 million to $955 million).

It had previously forecast core earnings of between 900 million euros and 1 billion euros.

Lanxess, which makes additives, lubricants, flame retardants and plastics, said it had managed to successfully pass on rises in raw materials and energy costs during the third quarter.

"In the fourth quarter, headwinds will blow even stronger due to further rises in energy prices and the threat of recession," Chief Executive Officer Matthias Zachert said in a statement.

Quarterly core profit (EBITDA) pre-exceptionals rose 4.8% to 240 million euros, slightly above the 237.6 million euros forecast on average by analysts.

The new full-year outlook compares to a restated prior-year figure of 815 million euros. Its 2021 results were restated to reflect the transfer of its polyamide business to a joint venture with financial investor Advent.

($1=0.9933 euros)

(Reporting by Linda Pasquini and Karol Badohal; Editing by Sherry Jacob-Phillips and Edwina Gibbs)