* Q1 EBITDA drops 30 pct to 46 mln eur
* 2014 cost savings to "significantly exceed" 60 mln eur
* Shares up 5 percent
(Releads on cost cut details from presentation, adds analyst
By Georgina Prodhan
VIENNA, May 15 Austrian viscose-fibres maker
Lenzing's profits fell by less than expected in the
first quarter as it accelerated a cost-cutting plan, lifting its
shares more than 5 percent.
Lenzing said on Thursday core profit fell by 30 percent as a
rise in output was outweighed by weak prices for viscose that it
saw lasting for months ahead - although there had been a slight
increase since a year-to-date low in April.
Prices for viscose fibres, which are closely linked to
cotton prices, are falling as Chinese producers who account for
most of the world's production add capacity to meet demand for
China's large textile production sector.
Lenzing said its 2014 savings would "significantly exceed"
the 60 million euros ($82 million) it had set as a floor, as it
implements a tough savings programme that includes cutting 15
percent of jobs at its largest site.
Shares in Lenzing pared gains to trade 5 percent higher at
46.04 euros by 0933 GMT, off a high of 46.08 euros and
outperforming a flat European chemicals index.
Kepler Cheuvreux analyst Stephan Trubrich said sales and
earnings were above the bank's and consensus forecasts. "The
company's launched cost-optimisation programme contributed
strongly to the Q1 earnings beat," he wrote in a note.
Lenzing said its total fibre sales volumes rose 9 percent to
a record 235,000 tonnes in the quarter but could not compensate
for a 12 percent fall in prices, leading to a sales decline of 9
percent to 452 million euros ($620 million).
Earnings before interest, tax, depreciation and amortisation
(EBITDA) were 46 million euros.
"Further weakening of global viscose fibre selling prices is
anticipated. It is likely to take several quarters until the
existing surplus production capacities for viscose fibers are
reduced," Lenzing said.
Lenzing, the global leader in cellulose fibres, is focusing
more on its specialty fibres Tencel and Modal to boost margins.
It said Modal generated good sales volumes in the first quarter
and it achieved a stable price premium for Tencel.
($1 = 0.7294 Euros)
(Reporting by Georgina Prodhan; Editing by Michael Shields and