Elementis FY operating profits grow, revenues slip

Chemicals company Elementis revealed on Thursday that adjusted operating profits had ticked up in 2023 despite seeing a modest dip in revenues for the year.

Elementis said adjusted operating profits were up 3% at $104.0m, with the company benefitting from pricing and cost reduction, as well as a material improvement in Talc profits. Adjusted operating margins improved from 13.6% to 14.6%.

However, revenue was down 3% to $713.0m A pricing and mix benefits were offset by lower volumes due to underlying demand weakness and destocking.

Net debt of $202.0m was 45% lower than the prior year, with the group boosted by proceeds from its sale of Chromium. Net debt to EBITDA reduced to 1.4x from 2.2x.

Elementis also said it had opted to reinstate its dividend, with a final dividend of 2.1 cents per share.

Looking forward, Elementis highlighted that it had made a "good start to the year", but noted the demand environment "remains uncertain". It also said it had a record new business pipeline of $363.0m, with 12 new products launched in the year.

Chief executive Paul Waterman said: "In 2023 Elementis delivered a resilient profit performance and an improved operating margin in the face of challenging market conditions.

"While market conditions remain uncertain, we believe that the combination of the growth and efficiency programmes will help us make material progress in 2024 against our 2026 financial targets."

As of 0900 GMT, Elementis shares were up 2.59% at 142.60p.

Reporting by Iain Gilbert at Sharecast.com