15th Oct 2019 09:49
(Alliance News) - Engineering company Vesuvius PLC on Tuesday said annual trading profit will be between 3.7% to 8.7% lower year-on-year due to continuation of weakening in key end markets.
Vesuvius shares were down 13% at 363.20 pence each in London in morning trade.
The company, which supplies products to the steel and foundry industries, said that trading profit, or earnings before interest and taxes, for 2019 will be between GBP180 million and GBP190 million, down from GBP197.2 million recorded in the year ago period.
"The challenging market environment highlighted at our half year results has continued into second half, with end markets continuing to weaken further, particularly in the Europe, Middle East & Africa region," Vesuvius said.
In July, the company said trading profit for 2019 is expected to be broadly in-line with market expectations, assuming a stabilisation of end markets and supported by acceleration of cost optimisation activities.
Vesuvius on Tuesday said its core steel and foundry divisions have been impacted by production cuts by steelmakers and further lowering of vehicle production estimates.
"Despite the short-term end market weakness we are experiencing, we see no structural change to the positive, long-term fundamentals of our end markets and remain confident in our ability to achieve a 12.5% return-on-sales, although this is unlikely to be delivered until we revert to long-term growth trends," Vesuvius added.
Vesuvius expects to release its 2019 results on February 27.
By Tapan Panchal; [email protected]
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