UpdateUK Croda Q4 operating profit up 20.4%, outlook positive

21 February 2012 14:01  [Source: ICIS news]

(adds outlook, chairman comments paragraphs 7–13)

Rising profitsLONDON (ICIS)--Croda International’s fourth-quarter operating profit rose by 20.4% year on year to £59.5m ($94.4m, €70.8m) as the group’s sales increased by 2.4% to £243.2m, the UK specialty chemicals company said on Tuesday.

“We delivered good results in the final quarter of 2011 against a strong quarter in 2010, achieving operating profit growth in both our reporting sectors despite relatively sluggish sales in December,” Croda said in a statement.

Sales in the firm’s consumer care segment grew by 9.1% to £135.1m, with operating profit rising by 30.4% to £42.9m, the company said.

Its industrial specialities unit sales for the fourth quarter fell by 4.8% year on year to £108.1m as a result of a marked slowdown in its European business in December. However, the segment’s operating profit rose by 0.6% to £16.6m, Croda said.

For the full year of 2011, Croda’s operating profit increased by 22.1% year on year to £242.4m, while its net profit grew by 27.9% to £167.5m, it said.

The company’s sales last year rose by 6.6% to £1.07bn, supported by strong performance in both its consumer care and industrial specialities unit, it added.

Looking to 2012, chairman Martin Flower said trading in January was encouraging and the positive trend has continued, despite the obvious economic uncertainties in Europe.

“While it is still early in the year and our visibility is limited, we expect 2012 to be another year of progress for Croda,” said Flower.

“In the longer term, our focus on innovation and technology, as well as our increasing exposure to the growing economies of Asia and Latin America, give me great confidence in the future prospects of the Group,” he added.

Croda said it moved forward in all of its four major operating regions, with the strongest progress being achieved in Latin America where sales grew by 11% in 2011, and in Europe with sales growth of 9%.

It added that sales in North America grew by a more modest 4% as it exited from a major distributor, which reduced sales in the second and third quarters.

In Asia, sales growth was held back to 3% after the company’s deliberate de-marketing of its industrial specialities business in the region, it said.

Investment bank J P Morgan Cazenove said that strong results in 2011 and a positive outlook for 2012 boosted the company’s margins to its highest levels ever in the fourth quarter.

($1 = £0.63, €1 = £0.84))

Additional reporting by Samuel Wong

By: Leigh Stringer
+44 208 652 3214

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