01 November 2012 10:01 [Source: ICIS news]
LONDON (ICIS)--Croda International on Thursday announced it will sell its Italian business based in Cremona as it reported a 4.7% year on year rise in third-quarter operating profit from continuing operations to £59.7m on higher sales, despite depressed market conditions.
In a trading statement, the UK specialty chemicals company added that, including an adverse currency impact, its continuing sales during the quarter were up 0.5% year on year at £256.5m ($413.7, €320.6m), as turnover decline in Europe weas offset by growth in all other major regions.
“Volumes were up 8.9% overall but the strongest growth came in lower value products in Performance Technologies and Industrial Chemicals (which were weak in the third quarter of 2011). This meant that average selling prices fell by 5.7%. We fully recovered raw material inflation,” it said.
Sales in Croda’s Consumer Care segment during the quarter were down 2.7% to £140.9m against a very strong third quarter in 2011 because of slow Personal Care sales, particularly in Europe. However, a number of successful product launches and a lower allocation of central costs helped return on sales grow 2.5 percentage points to 31.4% and segment operating profit increase 5.7% to £44.2m.
The Performance Technologies segment saw sales rise 2.5% at £94.7m following growth in all business sectors apart from Lubricant Additives, although operating profit fell 2.2% to £13.4m.
Croda’s Industrial Chemicals segment saw third-quarter sales rise 16.1% to £20.9m, while operating profits increased 40% year on year to £2.1m.
Croda’s sale of its Italian business to a private company located in Italy is expected to take place before the year end. Financial details were not disclosed, but Croda said the sale was for a consideration equivalent to the Italian unit’s working capital value.
The business, which was acquired with Uniqema in 2006, is focused on the manufacture of basic products for the performance technologies and industrial chemicals sectors. In the third quarter it had sales of £7.8m, compared with £10.4m in the same period of 2011, while operating profit remained flat year on year at £600,000.
Chairman of Croda, Martin Flower, commenting on the outlook, said: “Quarter four has started well. However, with the market remaining weak, particularly in Europe, and currency headwinds, we expect a similar performance in quarter four to that seen in the third quarter.”
($1 = £0.62, €1 = £0.80)
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