Elementis delivers 'resilient' Q3; US facility resumes output

25th Oct 2018 07:38

(Sharecast News) - Anglo-American chemicals company Elementis said it had delivered a "resilient" third, quarter and was on track and confident of making further financial and strategic progress in 2018.Chromium production had restarted at the company's Castle Hayne US facility, which was temporarily suspended in September due to Hurricane Florence and subsequent flooding, the company said."Whilst we expect some mitigation from insurance, this outage will adversely impact chromium full year operating performance. Otherwise, demand remains strong with supportive pricing momentum expected in 2019."Its personal care division reported a "solid performance" supported by growth in sales to direct customers of high margin hectorite-based products and the successful delivery of synergies from its buy of US-based SummitReheis in February.Coatings division performance in Europe and the Americas was similar to the first half but Asia was impacted by weaker volumes and currency headwinds, primarily in China, as a result of an economic slowdown, Elementis."Activity levels in energy have improved driven by new business and early signs of recovery in deep water drilling. We continue to expect a sequential improvement in performance in the second half of the year," it added.Mondo Minerals, bought by Elementis in October continue to trade in line with expectations, and was experiencing "good momentum" going into 2019.Free cash generation continued during the quarter, helped by the disposal of Elementis's Jersey City site for $17m in August. Including the sale of the surfactants business in February, this brought cumulative proceeds from asset disposals to more than $60m in 2018."Having completed the acquisition of Mondo Minerals, a material deleveraging profile is envisaged for the group and this will be accelerated by the outcome of the triennial review of the UK pension scheme that concluded no cash top up payments are required from Elementis until at least 2021.""This contrasts to the previous three years where total contributions were $32m."