Croda International hurt by FX headwinds

24th Apr 2014 08:15

- Adverse currency translation weighs on profit- Expects modest improvement in underlying sales to continue- Currency translation is expected to remain an issue Specialist chemicals company Croda International eked out a slight profit improvement as it battled against adverse currency movements, severe weather conditions in North America and difficult economic conditions in South America.The group, which provides ingredients for the cosmetics, coatings, agriculture and energy industries, said pre-tax profits increased slightly to £65.2m for the period since December 31st from £65.1m a year earlier. The group was hit by a £3.5m impact from adverse currency translation. On a constant currency basis, group turnover rose 2.9% with acquisitions contributing 1.6% to the total. Following an adverse currency translation of 6.1%, reported sales in sterling fell 3.2% to £274m during the period.Among its divisions Consumer Care sales fell 0.6% while Crop Care was hit by heavy snow in North America during January and February as well as weak sales in Eastern Europe. Personal Care sales fell amid weak sales in North America and challenging economic conditions in South America. Health Care growth was strong in almost all geographies.Performance Technologies underlying sales rose 3.7%, with particularly strong business in Asia. Underlying Industrial Chemicals sales were up 2.7% and again, Sipo added a further 7.2% to the growth.Looking ahead Croda said it expects the modest improvement in underlying sales growth seen in the first quarter to continue. "However, adverse currency translation is expected to remain an issue and consequently, second quarter performance is likely to be similar to that seen in the first quarter. The board is confident that the group has the right strategy in place to continue to drive profitable underlying growth," it said.Its shares fell 1.24% to 2,549p at 09:15 in London.CJ