Pressure on prices and volumes in the textile fiber segment due to Covid-19, especially in the second quarter of 2020, caused the Lenzing Group to post a loss for the full year of 2020. However, the recovery of demand in the second half of the year helped offset some of the impact. Wood-based specialty fibers such as Tencel Modal and Lenzing Ecovero proved popular.
Revenues for the full year declined by 22.4 percent to €1,632.6 million. The Ebitda fell by 39.9 percent to €196.6 million and the company ended the year with a loss of €10.6 million, versus a profit of €114.9 million in 2019.
Capital expenditure nearly tripled to €668.8 million, partly due to the implementation of major projects in Brazil and Thailand, focusing on expanding the internal production of pulp, increasing the share of specialty fibers, and implementing climate targets, which include being climate-neutral by 2050. The management said the construction of the dissolving wood pulp plant in Brazil continues to progress according to plan.
The strategic target to generate roughly 50 percent of revenue with specialty fibers in 2020 has already been met, and Lenzing aims for further organic growth in this area. The focus of the coming years will be on the construction of the new, state-of-the-art lyocell plant in Thailand, with the objective to increase the share of specialty fibers to more than 75 percent of the revenues generated by the Fiber segment by 2024. Production is expected to be launched at the end of 2021.
The company forecasts a continued increase in demand for sustainably produced fibers for the textile and apparel industry this year, as well as for the hygiene and medical industry. However, due to the high level of uncertainty caused by the pandemic, Lenzing remained cautious in its guidance, expecting the operating result to develop at a similar level in 2021 as in the pre-crisis year 2019.