24th Jul 2019 09:42
(Alliance News) - Specialty chemicals firm Croda International PLC on Wednesday reported a drop in profit, though a weaker sterling has helped sales.
Pretax profit for the six months to June fell 2.7% to GBP166.2 million, with sales rising 1.7% to GBP714.7 million, amid a "favourable benefit" from the pound's weakness.
On an adjusted basis, core business sales rose 2.4% at reported rates, but fell 0.4% at constant currency, to GBP657.9 million, while adjusted pretax profit was down 2.5% at reported currency and 3.5% constant to GBP170.6 million.
Croda, a FTSE 100 member, has increased its interim dividend by 3.9% to 39.5 pence per share.
"We have delivered a resilient performance in challenging market conditions and against strong prior year comparatives, a testament to Croda's focused strategy. Although Personal Care was significantly impacted by the US-China trade dispute and new sales legislation in China, we saw growth across the rest of the sector," said Chief Executive Steve Foots.
"An excellent performance in Life Sciences ensured overall progress in consumer markets, whilst Performance Technologies slowed in line with the wider industry, due to softer end markets in automotive and polymers."
Looking segmentally, Life Sciences grew revenue by 16% at reported rates and adjusted operating profit by 19%, reaching GBP184.3 million and GBP56.4 million respectively.
Performance Technologies' revenue fell 3.9%, however, to GBP226.8 million, with adjusted operating profit down 11% to GBP40.8 million. Personal Care revenue declined by 0.4% to GBP246.8 million, and adjusted operating profit by 2.7% to GBP82.1 million.
Looking ahead, Croda has a "strong" pipeline, with Life Sciences expected to continue to progress. Personal Care will remain subdued in the US, but Asia should pick up, while Performance Technologies is likely to tread water "until end markets improve".
"Based on the current challenging economic conditions remaining unchanged, overall we expect a slight improvement in performance in the second half of the year versus the prior year comparator," said Croda.
Shares were 3.4% lower on Wednesday morning at a price of 4,654.00 pence each.
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