FY net profit at Austrian cellulosic fibre producer Lenzing was down by 47.4%.
Group revenue decreased 3.7% to EUR2.18bn.
CEO Stefan Doboczky said 2018 was, nevertheless, the fourth best year in the company's history.
Volatile standard viscose prices continued to plague Lenzing in the first half of 2018
Lower selling prices for standard viscose, as well as higher raw material and energy costs, have contributed to a decline in full-year revenue and earnings at Austrian cellulosic fibre producer Lenzing compared with record results in the previous year.
Net profit for the year after one-off effects dropped by 47.4% from EUR 281.7m (US$24.6m) to EUR148.2m, while EBITDA margin dropped from 22.2%in the 2017 financial year to 17.6%.
Group revenue declined 3.7% to EUR2.18bn, compared with EUR2.26bn last year. The predicted challenging market environment for standard viscose, plus less favorable exchange rates and a slight decline in sales volume were the key contributing factors, the company said.
Meanwhile, Lenzing continued the implementation of its sCore Ten strategy in 2018, highlighting the start-up of new capacities for lyocell fibres in Heiligenkreuz, the production start of Lenzing Ecovero fibres at its Nanjing site, the acquisition of the remaining 30% of its Chinese subsidiary Lenzing (Nanjing) Fibers, and an investment in another pilot plant for Tencel Luxe filaments.
In addition, in 2018, the company decided to continue along its "ambitious path" and to invest roughly EUR100m in sustainable manufacturing technologies and production facilities by 2022 in order to further strengthen its closed-loop model and support its customers in replacing what it called "resource-intensive and environmentally harmful solutions."
"Although 2018 proved to be more challenging than the preceding years, it was, nevertheless, the fourth best year in the company's history," said CEO Stefan Doboczky. "We consistently worked on the strategic imperatives of our sCore Ten corporate strategy in order to raise our pulp integration, enhance customer intimacy, increase the share of specialty fibres in revenue and to invest in new technologies and business areas."
"The very positive development of our specialty business in an expected challenging market environment for standard viscose confirms our strategic direction and our ambitious plans. Thanks to its specialty strategy and its strong brands based on innovation and sustainability, the Lenzing Group is significantly more resilient today than only a few years ago. However, we are not immune to global developments, and further efforts and investments in specialty fibres are required to become even more resistant to market fluctuations."
Looking ahead, based on the current exchange rates, the Lenzing Group expects its results for 2019 to reach a similar level as in 2018 despite a much tighter market environment for standard viscose.