Croda International's third quarter performance was 'weaker than anticipated'

Speciality chemical manufacturer Croda International has revealed that its performance over the third quarter of the financial year was weaker than originally anticipated.
Greg Wright
By Greg Wright
Published 9th Oct 2023, 09:08 BST

In a statement for investors, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a “weaker demand environment”.

The statement added: “ This has continued to depress sales volumes and our overall performance for the period was therefore weaker than originally anticipated. In consumer care, sales volumes in the beauty care business were lower than expected in July and August with North America not recovering from quarter two.”

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Beauty care sales volumes have improved in September and Croda expects the recovery to continue through the remainder of the year, albeit now from a lower base. Second half operating profit margin is expected to be lower than the first half year.

Croda International has provided an update on trading from July 1 to September 30 2023 (Photo by PA)Croda International has provided an update on trading from July 1 to September 30 2023 (Photo by PA)
Croda International has provided an update on trading from July 1 to September 30 2023 (Photo by PA)

The statement added: “Customer appetite for innovation remains high, with continued demand for ingredients differentiated by sustainability.”

With no indications of a significant rebound to come in the fourth quarter, Croda now expects full year 2023 group adjusted profit before tax to be between £300m and £320m, compared with the previous figure of £370m to £400m. Several cost measures have been implemented since June this year to protect profitability, Croda said. Actions include tighter budgetary control of fixed costs and optimising production through plant shutdowns and reduced shift patterns.