(new: share price, experts and details)

FRANKFURT (dpa-AFX) - Write-downs of more than half a billion euros by Lanxess left a clear mark on the share price on Wednesday. In Xetra trading, the share price slipped by 4.5 percent to 23.02 euros. This is the lowest level since the beginning of December. The drop since the beginning of the year amounts to around 19 percent.

The chemicals group is taking write-downs in two business areas and on its minority stake in the Envalior joint venture. Lanxess also expects demand in the Flavors & Fragrances and Polymer Additives segments to be weaker than originally anticipated this year.

The latter suggests that the start to 2024 has been difficult in these business areas, wrote analyst Chetan Udeshi of JPMorgan bank. Write-downs on the Envalior investment also suggest that market concerns about high debt ratios and Lanxess' balance sheet are likely to persist.

Chris Counihan from investment firm Jefferies suspects that the write-down at Flavors & Fragrances is largely due to the acquisition of Emerald Kalama in 2021, a manufacturer of preservatives and aroma chemicals. Although both write-downs are non-cash, the impairment at Envalior could reduce the potential earnings if Lanxess exits the joint venture. This is relevant because, in view of Lanxess' debt ratio, it would be important to monetize the investment and thus reduce debt in the medium term.

In October, Lanxess shares fell to their lowest level since 2009 at just over 20 euros. They then recovered to just under EUR 30, but failed several times in December to return above the 200-day line. The market pays a lot of attention to this as a long-term trend indicator. Subsequently, the share price continued to fall with fluctuations./bek/mis/jha/