2nd Jul 2015 06:40
LONDON (Alliance News) - Specialty chemicals company Synthomer PLC on Thursday affirmed its expectations for 2015 as it said that robust trading in its Asian business will offset challenges in its European arm.
The FTSE 250-listed company said it has seen similar trends in its Europe and North America business in the second quarter, with volumes lower year-on-year owing to weaker demand in its paper and carpets businesses. In addition, and as expected by the company, the small margin benefit seen in the first quarter from declining raw materials prices did not continue into the second quarter, with modest raw material price inflation re-emerging.
Synthomer said its overall operating profit in its Europe and North America business was marginally lower in constant currencies and further behind on a reported basis due to the weak euro, leaving it trading slightly behind current market expectations.
In its Asia and Rest of World business, Synthomer said it has seen improved unit margins and robust demand in line with the first quarter, particularly in its Asian nitrile business. Volume growth and margin growth have been strong, meaning operating profit in the division will be materially higher year-on-year in the first half and will beat market expectations.
Going into the second half, Synthomer said the economic challenges in Europe, plus the weak euro, will hit its performance, but said this will be offset by its strong Asia and Rest of World arm. As a result, it still anticipates meeting its expectations for the full year.
By Sam Unsted; [email protected]; @SamUAtAlliance
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