11th May 2020 09:14
(Alliance News) - Speciality chemicals maker Victrex PLC on Monday warned that the Covid-19 pandemic is beginning to hit its forward order book, as it posted a dip in first half profit.
"Q3 to date has been broadly in line with our expectations, although we are now seeing emerging headwinds from Covid-19 in our forward order book, particularly in Aerospace and Automotive, with Energy already seeing very tough conditions. Geographically, some more normalised demand returning in Asia could prove supportive, although the demand outlook in Europe and the US is becoming more challenging," Chief Executive Officer Jakob Sigurdsson said.
"We have implemented a range of cash conservation measures, including deferring our debottlenecking programme and a decision on our interim dividend, and alongside our net cash position and available facilities, our balance sheet remains strong," Sigurdsson added.
For the six months to March 31, revenue rose 4% to GBP151.5 million from GBP145.7 million a year before; however, pretax profit edged lower to GBP49.9 million from GBP50.2 million reflecting exceptional items of GBP2.1 million related to the group's China subsidiary investment.
The rise in revenue was attributed to an improved volume performance and a slightly weaker product mix.
Group sales volume for the first half totalled 1,992 tonnes, 5% up on the prior year, principally reflecting some improvement in the Automotive unit and continued growth in the Medical business. Volumes in Aerospace and Electronics were stable, but Energy & Other Industrial was down 3% reflecting lower rig count and reduced oil and gas activity.
Victrex deferred its interim dividend payment, due to the coronavirus crisis, and said the timing of any shareholder payment will be dependent on "prevailing macro-economic and end-market conditions over the coming months".
The company said it is unable to provide a detailed guidance for financial 2020 due to the "significant macro and end market uncertainty", but it remains well placed to deliver on medium- to long-term opportunities due to the ongoing "proactive actions" to minimise the virus disruption.
Shares in Victrex were down 0.6% at 1,960.30 pence each in London on Monday morning.
By Tapan Panchal; [email protected]
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