Elementis confident of recovery in full-year earnings

30th Oct 2015 08:26

(ShareCast News) - Chemical specialist Elementis said full-year earnings should be in line with expectations despite a sales slowdown.In a trading statement, Elementis said positive first half trends were expected to continue, "despite challenging conditions" in the Chinese and US oilfield sectors.However, it added that third quarter sales at the speciality chemical division were down 7% on a constant currency basis and 20% on a reported basis. Chromium sales were down 21% year-on-year but in line with expectations.The company said it would still be in a position to reward shareholders with "attractive returns" through its progressive dividend policy.Chief executive David Dutro said market share and margin contributions at the company's speciality products unit had gone up. He added that chromium margins had remained remained "relatively stable" since the end of June."This resilient margin performance is a clear indication that our customer value proposition remains in place and that the impact on demand is arising from the current macro-economic factors. Consequently, we expect positive performance to resume as end market demand returns," he said."In the meantime, we are taking measured action to reduce our cost base to a level that is more consistent with current activity levels and most of the benefit from this will be seen in 2016."Dutro said innovation remained a "key factor" in the firm's performance and it would continue to make investments in the future growth of the business."These will include in decorative coatings, a further expansion of the New Martinsville facility, and in Asia Pacific, new investments in the water based dispersants arena, as well as in support of our IP protected, high value, castor wax based products," he said.Shares in Elementis were up 4.7% to 236p at 0855 GMT on Friday.