Croda International posts rise in pre-tax profit for first half

23rd Jul 2013 07:06

Croda International reported a 6.3 per cent year-on-year rise in pre-tax profit to 133.1m pounds for the first half, driven by sales of industrial chemicals. The chemicals company posted an 8.3% rise in earnings per share to 68.1p for the first six months of the year, despite a challenging trading environment in Europe.Sales growth was achieved across all divisions apart from performance technologies which fell 0.7% to £100.8m. Industrial chemical sales rose 11.9% to £24.4m while consumer care sales jumped 2.3% to £279.6m.Group profit was also supported by reduced interest rates, lower borrowings and reduced pension funding interest, given the lower pension deficit. Operating profit in consumer care increased 2.6% to £99.0m as higher margins and sales growth in personal care and health care partially offset a decline in crop care.Performance technologies sales were suppressed by a weak European automotive market, affecting its biggest areas of business within the sector including lubricants, polymer additives and coatings and polymers. Yet operating profit within the division was up 8.2% to £18.4m, boosted by higher margins, product launches and tight control of costs.In industrial chemicals, the division benefit from the disposal of Cremona in November 2012 and a focus on niches that command higher margins. Operating profit jumped 33.3% to £5.6m."These results demonstrate the resilience of Croda's strategy. Although the challenging trading environment has inevitably held back certain parts of the business, our leading positions in niche markets and steadfast commitment to innovation are reflected in improved profits and margins in all three business divisions," said Chairman, Martin Flower."Whilst we do not expect market conditions in Europe to improve in the near term, nor do we expect a repeat of the reduction in market demand seen in the second half of 2012." The group increased its dividend by 8.4% to 29p.RD