Elementis warns on first-half Chromium earnings

Specialty chemicals company Elementis issued a profit warning ahead of its interim results on Wednesday, with sales in the Chromium division failing to fire.

The FTSE 250 firm said that, as previously indicated, sales and contribution margins from the division in North America for the first six months of the year are expected to be similar to the prior year.

However, market conditions outside of North America were still challenging, its board said, with currency weakness against the US dollar - particularly in Eastern Europe.

“As a result, sales and margins outside of North America for the year as a whole are expected to be materially lower than the previous year,” Elementis said in a statement.

“Consequently, earnings per share for the year as a whole is expected to be below the range of market expectations.”

Elementis said its Specialty Products division has continued to make progress, in line with its previously issued forecasts.

“In coatings, sales of decorative products from the New Martinsville plant continue to make good progress and sales in Asia Pacific have resumed a growth trend, following the destocking and adjustment that took place in the Chinese economy in the second quarter of 2015.

“Sales in personal care continue to show impressive growth based on new products and geographic expansion,” the board said.

It added that sales in oilfield operations have remained relatively stable, following the sharp downturn experienced in the first half of 2015.

“Strong cash flow generation continues to be a feature of the group's performance in 2016 and the net cash balance at the end of the year is expected to be ahead of the previous year.”