25th Oct 2019 08:24
(Alliance News) - Synthomer PLC on Friday issued a profit warning due to a challenging backdrop for the chemicals industry, depressed European industrial activity and increased political and economic uncertainties.
Synthomer shares were down 13% at 269.20 pence each on Friday morning, the worst performer in the FTSE 250 index.
The Essex, England-based chemicals company said if current weakness continues through fourth quarter then 2019 underlying pretax profit will be 10% below the GBP135.1 million recorded in 2018 and 10% off the current GBP135.3 million consensus estimate.
Synthomer also expects slower trading environment to continue through the remainder of 2019 and into 2020, particularly in Europe.
In the Performance Elastomers unit, there has been continued weakness in the third quarter of 2019 in Europe. Synthomer has now started a review, saying it will update on "asset re-purposing and cost base" in March next year.
Synthomer now expects Styrene Butadiene Rubber volumes in 2019 to be 10% behind 2018 and unit margins to also be similarly lower than last year. Styrene Butadiene Rubber is used for making car tyres.
The company's Functional Solutions and Industrial Specialities business continued to trade in line with expectations during the third quarter.
By Tapan Panchal; [email protected]
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