* Says market will remain tough this year
* Average fibre selling prices were down 13 pct in 2013
* Says positive effects from cost-cutting to be felt in H1
* 2013 EBITDA dropped, dividend cut to 1.75 eur/shr (Adds company comment, prices detail, dividend)
FRANKFURT, March 21 (Reuters) - Austrian synthetic fibres group Lenzing forecast on Friday that its markets would remain tough this year after price competition led to a drop in 2013 earnings and prompted it to cut its dividend for a second year running.
Lenzing, a global leader in man-made cellulose fibres used as a substitute for cotton, said that fibre selling prices averaged 1.70 euros ($2.34) per kilogram last year, down about 13 percent from 2012, with no improvement in sight.
“The generally difficult economic environment for the Lenzing Group hardly changed in the first weeks of 2014 in comparison to the conditions prevailing during the fourth quarter of 2013,” the company said in its 2013 financial report.
The group, whose finance chief quit last year over strategic differences, announced in November that it would launch a cost-cutting programme including a 15 percent reduction in staff at its largest production site.
Lenzing aims to save 120 million euros a year from 2015 and said that initial positive effects on earnings are likely be felt in the first half of this year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 225.4 million euros last year from an adjusted 352.4 million in 2012, broadly in line with the consensus in a Reuters poll of analysts.
Lenzing announced that it is cutting its dividend again, proposing to pay shareholders 1.75 euros per share for 2013, compared with 2 euros for 2012. ($1 = 0.7255 Euros)
Reporting by Maria Sheahan; Editing by Christoph Steitz and David Goodman