Impairment Charges Weigh on Lanxess Stock

A heavy burden for the Leverkusen-based chemical company Lanxess: Impairments amounting to a nine-figure sum led to a noticeable decline in the share price on Wednesday. In pre-market trading on Tradegate, the value of the share fell by 3.5 percent, marking the lowest point at 23.27 euros since early December of the previous year. This indicates a decline of nearly 20 percent since the turn of the year. Responsible for these price movements are write-offs that Lanxess took in two of its business divisions and in the minority stake in the joint venture Envalior. The group is signaling a subdued forecast regarding the demand for products from the Flavors & Fragrances and Polymer Additives divisions for the current fiscal year. These developments might suggest a bumpy start for the company into the year 2024 in the aforementioned segments, surmises analyst Chetan Udeshi from JPMorgan in his commentary. The write-downs on the stake in Envalior, according to his assessment, further heighten concern among market observers, especially in light of high indebtedness and the resulting strain on Lanxess's balance sheet.