28th Jul 2015 07:34
LONDON (Alliance News) - Specialty chemicals company Elementis PLC on Tuesday posted a lower pretax profit for the first half of 2015, hit by a decline in sales from its oil and gas-exposed businesses.
The FTSE 250-listed company said its pretax profit in the half to the end of June was down to USD65.3 million from USD72.4 million a year earlier, as sales for the company fell to USD360.4 million from USD400 million.
Elementis said its specialty products franchise took a heavy hit in the half from the decline in oil and gas industry activity, caused by spending cuts by companies in the sector in the wake of the collapse in the oil price over the past year.
The company said coating sales were up by 1% in constant currencies in the half, but oilfield revenue dropped by 30%.
Elementis said it will pay a flat interim dividend of 2.70 US cents per share.
"In the first half of the year, Elementis continued to leverage its strong market positions, geographic diversity and innovative products to deliver growth in most markets. However, as previously indicated, our performance was negatively impacted by the ongoing weakness in oil prices and the subsequent reduction in drilling and exploration in North America, as well as some destocking in China in advance of an anticipated market slowdown," said Chief Executive David Dutro.
"We have also continued to invest in the future growth of our Specialty Products business, while balancing near term profitability and future value creation. Though these investments require additional costs to be absorbed in the near term, they are the fundamental building blocks that will drive long term profitable growth," he added.
Elementis shares were down 0.6% to 248.7 pence on Tuesday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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