UK Croda’s shares rally after positive first-half earnings

24 July 2012 11:31  [Source: ICIS news]

CrodaLONDON (ICIS)--Croda's shares rallied on Tuesday after the UK-based specialty chemicals firm reported strong half-year earnings.

At 10:26 GMT, Croda's share were trading on the London stock exchange up 5.02% from Monday's close at 2,341 pence.

Croda’s net profit for the first half of 2012 grew by 4.7% year on year to £90m ($141m, €115m), as strong demand from North America offset softer trading conditions in Europe.

The company's sales in the first six months of 2012 rose by 2.4% year on year to £572.9m, as it saw improved performance across its Consumer Care and Performance technologies segments.

Sales in its Consumer Care business during the period were up 5.8% year on year to £310.5m, while sales were up 1.9% to £212.5m in its Performance technologies segment.

“In contrast to the difficult trading conditions in Europe, we experienced strong demand in most business areas in North America, while in Asia and Latin America we made further progress in focusing on higher margin differentiated products,” Croda said.

The company’s operating profit grew by 6.7% year on year to £133.7m in the first half of this year, it said.

"Against strong 2011 comparatives and adverse currency translation, both core business segments have made further progress. It is particularly pleasing to see Performance Technologies delivering improved margins and continuing to demonstrate the benefits of increased innovation," said Martin Flower, chairman of Croda.

“Croda’s resilient track record of growth rests on our consistent ability to bring innovative, high margin products to market and expand our presence in emerging economies,” he added.

“Assuming no significant change in market conditions in the near term, we remain confident that this strategy will enable us to make further progress in the second half of 2012,” Flower said.

Investor bank JP Morgan Cazenove said: “Again Croda delivers strong results - and provides reassurance to investors in a frustratingly macro dominated climate."

“Through the earnings’ season, and as other chemical companies most likely reflect increasingly difficult trading conditions, Croda’s H1 PTP [half-year pre-tax profit] 2012 was encouragingly 2% above consensus - with PBT [profit before tax] of £133m versus consensus expectations of £131m,” it added.

($1 = £0.64, €1 = £0.78)

Additional reporting by Joey Lau

By: Franco Capaldo
+44 (0)20 8652 3214

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