Synthomer sees 'solid' Q1 performance as it leaves outlook unchanged

Synthomer updated the market on its trading in the first quarter on Thursday, reporting that its Europe and North America segment delivered another solid performance.

The FTSE 250 chemicals company said volumes in the segment were higher in the three months to 31 March than at the same time last year, primarily reflecting the positive impact of the Speciality Additives and Pischelsdorf SBR latex acquisitions.

Unit margins were marginally lower, which the board said was due to the transactional impact of European sales denominated in US dollars.

The Asia and Rest of World segment remained stable, Synthomer said, with performance in line with its own expectations.

Nitrile latex volumes were marginally higher than a weaker comparative period, when customer spending was impacted by the volatile raw material environment.

Unit margins were broadly in line with the first quarter 2017.

“We remain cautiously optimistic on the continued Nitrile latex demand growth and margin development recognising that our 90kt capacity is on track to come on line late in the third quarter,” the Synthomer board explained in its statement.

Net debt increased from £180m at the year end to £246m at 31 March.

That reportedly reflected completion of the acquisition of the BASF Austrian SBR business and assets in Pischelsdorf for €29m (£25m) in January, as well as seasonal working capital movements which was impacted by a rising raw material price environment, as the company saw in 2017.

“Overall, the group continues to trade in line with the Board's expectations, and accordingly the view for full year 2018 remains unchanged.”