Croda announces increase in profits

The Snaith-based company reported a pre-tax profit of £65.1m in the first quarter to March 31, up from £61.1m a year earlier.

Revenue at the company, which supplies chemicals to firms such as P&G, Unilever, L’Oreal and Estee Lauder, grew marginally to £283.1m from £281.9m last year.

Croda said the results were achieved against a particularly strong performance in the same period in 2012 and despite the adverse impact of an earlier Easter this year.

Consumer Care sales were broadly stable at £158.4m, down from £159.1m last year, with a weaker performance from the Crop Care business due to the poor weather in a number of regions.

Personal Care and Health Care sales were flat.

Performance Technologies sales were also stable, down 0.3 per cent to £102.4m with continuing weakness in Lubricants being the major factor.

Industrial Chemicals sales rose 10.4 per cent to £22.3m.

Profits and margins improved in all three divisions.

Consumer Care profits increased by 2.3 per cent to £49.2m.

Performance Technologies profits rose by 1.9 per cent to £16.1m.

Industrial Chemicals profits increased by 80 per cent to £2.7m as a result of the strong sales uplift and favourable commodity prices.

Interest costs decreased due to the reduced pension fund deficit, helping to achieve the 6.5 per cent increase in pre-tax profits.

Croda said its underlying cash generation in the first four months of 2013 was good and at the end of March net debt was £211.1m, an increase of £3.4m on the year end despite a £38m payment into the UK pension fund in January.

Croda said its first quarter results represents a solid start to the year and it expects to report further progress in 2013.

Analyst Adam Collins at Liberum Capital said: “We would expect little change to estimates following today – upside is possible on the cost side given recent softness in many oil based and natural commodities. The main ones for Croda are sheep grease, ethylene oxide, rapeseed oil, fish oil, tallow and this should help offset possible macro related headwinds.”