German blue-chip Lanxess has said it expects to see its profits hurt in the first quarter and beyond by low demand for its products in Europe. The firm depends in no small way on orders from the auto industry.
Leverkusen-based Lanxess of Germany said Thursday it expected lower underlying earnings in the first three months of the year.
"Contrary to the usual seasonal trend, the low level of demand that was already apparent in the second half of 2012 has continued into the start of the current year in most businesses," the DAX-listed firm said in a statement.
Lanxess is the world's largest producer of synthetic rubber which is used for instance in tires and seals, and a continuously weak automobile industry has been taking its toll on the company.
Against the backdrop of weak demand in the tire and automotive industries in Europe, Lanxess expects significantly lower underlying profit of 160 to 180 million euros ($207-233 million) in the first quarter of 2013.
CEO Axel Heitmann said while the road might be bumpy at present, the company would readjust its operations to requirements in emerging markets. He said Lanxess was aiming to invest between 650 and 700 million euros this year, with 192 million euros to go into development and research projects.
Despite market uncertainties, Heitmann proposed a dividend of one euro per share for 2012, up 18 percent from a year earlier. Investors on Thursday looked disappointed by the weak outlook as Lanxess' shares dipped by about 7 percent in early trading.
hg/dr (Reuters, dpa, AFP)