German speciality chemicals company Lanxess says that impairment charges in the fourth quarter of 2013 will result in a net loss of EUR159 million in the FY2013. Due to this, its dividend will be half what was paid in 2012.

The firm’s dependence on the automotive and tyre industries, which account for 40% of its business, and the overcapacities, as well as raw material and energy costs, will result in what it says will be a competitive environment “in which future cash flow contributions no longer reflect the book values of the business units Keltan Elastomers and High Performance Elastomers (Performance Polymers segment), as well as Rubber Chemicals (Performance Chemicals segment).”

The above-mentioned impairment charges, together with exceptional expenses of about EUR30 million, brought forward within the “Advance” efficiency programme, result in a negative net income and earnings per share (EPS) in the fourth quarter of 2013, as well as full year 2013.

Though EBITDA is not subject to the impairment charges, it is expected to decline by 40% to EUR735 million, but will be within the guided range of EUR710-760 million. Sales are expected to decline by about 9% to EUR8.3 billion.

The firm says the final numbers will be provided in the 2013 consolidated financial statements that have not yet been completed. Subject to Supervisory Board approval, the Board of Management plans to propose a dividend of EUR0.50 per share for the business year 2013 at the AGM in May. Lanxess paid a dividend of EUR1 per share for the business year 2012.

Nevertheless for 2014, Lanxess expects a slightly improved EBITDA “due to the absence of one-off items, even if selling prices remain at low levels.”

Early this year, the firm announced a change in leadership, with Chairman Axel Heitmann to step down at the end of this month. He will be replaced by Matthias Zachert, who was previously the company's Chief Financial Officer.