14th Feb 2022 08:44
(Alliance News) - Synthomer PLC on Monday cautioned that demand in a key rubber unit has been weak, though the chemicals company still expects to post a profit surge for 2021.
Shares in Synthomer were down 5.2% at 320.39 pence each on Monday morning in London.
The Essex-based chemicals company said it expects adjusted earnings before interest, tax, depreciation, and amortization to roughly double to GBP518.4 million in 2021 from GBP259.4 million the year before. This figure would be in line with current market expectations, it added.
The company noted "strong trading across all divisions" during 2021.
Synthomer put this down to "peak margins" within its Performance Elastomers' Nitrile Butadiene Rubber business, a positive contribution from its subsidiary Omnova Solutions Inc and strong organic growth.
The chemicals company also said that in its NBR business, margins have normalised to pre-virus levels.
Nonetheless, demand at the unit remains "subdued" due to high inventory levels of medical gloves. NBR is frequently used in latex and surgical gloves.
"Trading conditions in NBR are expected to normalise by the end of H1 with market growth returning to 2019 levels in the second half," Synthomer said.
"All other divisions have had an encouraging start to the year," it noted.
Synthomer said it remains confident about the benefits of recent acquisitions. Looking ahead, the company believes that this combined with continued investment in new capacity and its "proven" growth strategy will underpin growing profits in the coming years.
By Abby Amoakuh; [email protected]
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