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Croda International (CRDA)

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Wednesday 29 April, 2009

Croda International

Q1 Trading Statement

RNS Number : 3245R
Croda International PLC
29 April 2009
 



29 April 2009


Croda International Plc


First quarter trading statement


Martin Flower, Chairman of Croda International Plc, is due to provide the following update on first quarter trading at today's Annual General Meeting:


'I am pleased to report first quarter profits in line with expectations. Despite the difficult economic climate, the core Consumer Care business produced record revenues and profits. In this division, sales increased 26.6to £133.7m (Q1 2008: £105.6m*and operating profit grew 37.0to £28.9m (Q1 2008: £21.1m*with Personal Care, Health Care and Crop Care trading strongly but Home Care seeing underlying sales and profits declineAs expected, weaker demand in Industrial Specialities has continued since the year end with sales down 19.7to £97.1m (Q1 2008: £120.9m*). Basic commodity sales and true industrial speciality volumes are down by similar amounts and this, together with the absence of last year's glycerine benefit, is the reason for the profit decline in this segment, resulting in an operating loss of £2.6m (Q1 2008: £7.1m profit*)


Overall, Group pre-tax profit for continuing operations at £21.7m has improved versus the fourth quarter of 2008 but, as anticipated, is behind the strong first quarter comparatives of 2008 despite the excellent performance iConsumer Care. Favourable currency translation boosted group sales by 20.1%. The average price per tonne increased by 8.0versus the previous year due to the full year effects of the increases put through in 2008, improved mix and the use of our own global sales team to handle products previously sold via third party distributors. Continuing operations volumes declined by 26.2%, driven by the significant reduction in sales of industrial speciality products and commodities, although the underlying demand has improved each month since December. 


Net debt stood at £395.8m at the end of March, in line with expectations, with positive currency translation outweighing unfavourable tax and interest payment phasing which should benefit future quarters. 


As part of our continuing strategy to reduce our exposure to basic commodity sectors, we have today announced the closure of our operations at Bromborough in MerseysideUnited KingdomThe site currently employs 115 people and was part of the Uniqema acquisition in 2006. Bromborough predominantly manufactures commodity and industrial speciality chemicals and we will move production of key specialities to other sites. In 2008, the discontinued business had a turnover of £45.3m and made a £2.1m operating profit. This was flattered by favourable glycerine pricing and the site made a loss in the final quarter of 2008 which has worsened into 2009. There will be an exceptional asset write off of around £30.0m and exceptional cash closure costs of approximately £10.0m, although the latter will be significantly offset by the release of working capital.


We include quarterly segmental profitability and sales analysis at the end of this statement.


We expect the weakness in commodity and industrial markets to continue over the coming months but also anticipate continued sales growth in Consumer Care and this, allied to ongoing cost savings and favourable raw material pricing in some sectors, gives us continued confidence that we will make further progress in 2009.'


*2008 figures restated to exclude discontinued activities resulting from the closure of Bromborough.



For further information, please contact:


Mike Humphrey, Group Chief Executive

Tel: 01405 860551

Sean Christie, Group Finance Director




Charlie Armitstead, Financial Dynamics 

Tel: 020 7269 7275 


The company will host a conference call for analysts at 8.00am today

Dial-In: +44 (0) 1452 542 303 

Please quote 'Croda International' to gain access to the call



Croda International Plc

Unaudited income statement before tax and exceptional items*

31 March 2009

£m







3 months to

3 months to




31 March

31 March*




2009

2008

Change







Consumer Care

133.7

105.6

+26.6%


Industrial Specialities

97.1

120.9

-19.7%


Revenues from continuing operations

230.8

226.5

+1.9%







Consumer Care

28.9

21.1

+37.0%


Industrial Specialities

(2.6)

7.1

n/a


Operating profit from continuing operations

26.3

28.2

-6.7%







Net bank and loan interest payable

(4.5)

(5.2)



Net retirement benefit scheme financing

(0.1)

1.0








Profit before tax from continuing operations

21.7

24.0

-9.6%







Continuing operations operating margin

11.4%

12.5%












Analysis of turnover uplift for continuing operations*







Continuing operations sales volumes



-26.2%


Currency impact



+20.1%


Price/mix



+8.0%





+1.9%


2008 trading by Quarter restated to exclude discontinued activities*




Q1

Q2

Q3

Q4

Year


Consumer Care

105.6

107.8

111.5

113.0

437.9


Industrial Specialities

120.9

129.8

123.9

98.6

473.2


Revenues from continuing operations

226.5

237.6

235.4

211.6

911.1









Consumer Care

21.1

23.0

21.6

24.1

89.8


Industrial Specialities

7.1

8.0

6.5

1.2

22.8


Operating profit from continuing operations

28.2

31.0

28.1

25.3

112.6


Interest

(4.2)

(4.4)

(3.8)

(3.9)

(16.3)









Profit before tax from continuing operations

24.0

26.6

24.3

21.4

96.3









*2008 figures restated to exclude discontinued activities resulting from the closure of Bromborough.



This information is provided by RNS
The company news service from the London Stock Exchange
 
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