24th Jun 2015 06:37
LONDON (Alliance News) - Specialty chemicals company Elementis PLC said its earnings per share will miss market expectations for the full year on Wednesday as the group said it was taking a hit from conditions in the oil and gas market, from additives sales in China, and from local currency weakness in Latin America for its personal care arm.
FTSE 250-listed Elementis said that a slew of short-term issues it has faced in the second quarter of the year will mean its earnings per share for the full year fall below market expectations.
Additives sales in North America in the second quarter are expected to be at least 30% lower year on year, the company said, owing to volume softness, due to the curtailing of drilling activity in the oil and gas market as companies in the sector delay and cancel projects in response to the lower world oil price.
Coating additives sales, though solid in North America and Latin America, have fallen in China in the second quarter due to lower demand, though the group still expects overall sales in the first half to be broadly flat year-on-year, albeit on a constant currency basis.
In its personal care arm, Elementis said its sales in Latin America have been hit by significant weakness in local currencies. This has resulted in the company deciding to stop supplying a number of applications where returns have shifted to an uneconomic threshold. Sales for the business will, therefore, be broadly flat year-on-year, against strong comparatives, but will be higher on a constant currency basis.
In its Chromium arm, trading has been in line with its expectations and Elementis does expect its operating profit for the year to meet its forecasts.
By Sam Unsted; [email protected]; @SamUAtAlliance
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