Synthomer first-quarter trading in line
Chemicals company said on Thursday that first-quarter trading was in line with its expectations at the start of the year and that it continues to expect to make some earnings progress in 2024.
In an update ahead of its annual general meeting, the company said continuing group volumes were at their highest levels since the second quarter of 2022.
It said that while this partly reflects some short-term customer restocking - and there is still no evidence of a sustained improvement in underlying end-market demand - it is seeing improving activity levels in some of the segments that were previously more challenged.
First-quarter continuing group earnings before interest, tax, depreciation and amortisation were higher than the same period a year earlier, underpinned by continued robust pricing, particularly in the speciality businesses, ongoing cost reduction activities and lower energy costs.
However, group revenue was lower due to lower raw materials prices.
The company said it continues to expect to make some earnings progress and be free cash flow positive this year, even if macroeconomic demand conditions do not improve.
Chief executive Michael Willome said: "We are cautiously encouraged by trading since the start of the year: while there are signs of improvement in some of our end markets, visibility of a sustained recovery remains elusive at this stage.
"We therefore continue to strengthen Synthomer's position for the future, by delivering our specialisation strategy, optimising our portfolio and cost position, and demonstrating the cash generative nature of our business."
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