31st Oct 2013 09:10
LONDON (Alliance News) - Specialty chemicals group Croda International PLC said Thursday that its profit and turnover increased in the third quarter but warned that the weakness of currencies such as the Indian rupee and subdued markets will restrain fourth quarter profits.
Croda said turnover increased 4.4% to GBP267.9 million in the quarter ended September 30 from GBP256.5 million a year before. Underlying turnover, excluding acquisitions and currency movements, rose 0.8%.
Croda said continuing pretax profit increased 5.4% in the quarter to GBP58.6 million from GBP55.4 million a year earlier. Operating margin slipped slightly to 23.1% from 23.2%.
Results were led by a 32% increase in turnover from Croda's Industrial Chemicals business to GBP27.5 million from 20.9 million, bolstered by the acquisition of Sichuan Sipo Chemical Company in July.
Consumer Care turnover rose 3.2% to GBP145.4 million, with strong sales in Western Europe and North America offset by a sales decline in Eastern Europe, the Middle East and Africa. Performance Technologies turnover was flat at GBP95.0 million versus GBP94.7 million, Croda said, with Home Care and Coatings & Polymers products seeing weak sales in North America.
Croda said that innovation-led sales were very strong in all its segments, with double-digit growth seen in new and patented products. However, it said it suffered near double-digit declines in its lower-margin, high-volume commodity and toll manufacturing sales.
"Croda has continued to generate a steadily improving underlying sales performance through every quarter of this year despite challenging market conditions," Chairman Martin Flower said in a statement.
"We continue to benefit from the strong demand for innovation and remain particularly encouraged by the progress that Croda is making in Asia and South America. However, with currencies continuing to weaken and market conditions expected to remain subdued, fourth quarter profits are likely to be similar to quarter three. Looking ahead, the Board remains confident that Croda's strategy will continue to deliver progress into 2014 and beyond."
Croda shares were down 6.9% at 2,453.00 pence Thursday morning, making it the biggest faller in the FTSE 100.
By Tom Waite; [email protected]; @thomaslwaite
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