Croda H1 revenue, profit fall as Covid-19 hits demand

Speciality chemical company Croda reported a fall in first-half profit and revenue on Thursday as demand took a hit from the coronavirus pandemic.

In the six months to the end of June, pre-tax profit declined 12.8% to £144.9m on revenue of £672.9m, down 5.8% on the same period a year ago. The dividend per share was maintained at 39.5p.

Sales were down in every division, but the industrial chemicals segment was the worst performer, with sales 17.3% lower. Sales in personal care and the core business declined 8.1% and 4.9%, respectively, while performance technologies and life sciences saw sales drop 4.6% and 0.8%, respectively.

"The first quarter saw a continuation of the improving outlook noted at the 2019 full year results. With the spread of Covid-19 lockdowns through February and March, demand remained solid, with customers primarily focused on securing their own supply chains through Croda," the company said.

"During the second quarter, demand became more variable, exacerbated by the delay and retiming of customer orders. Consumer product markets responded more rapidly to lockdown than our industrial end markets. As a result, personal care sales were hardest hit."

Croda said that following a challenging second quarter, trading has stabilised but visibility is limited and the timing of recovery remains unclear.

"We anticipate consumer markets significantly impacted by lockdowns to recover more quickly than industrial end markets," it said.

At 1250 BST, the shares were down 0.5% at 5,588p.