Elementis trading in line amid subdued market

(Sharecast News) - Specialty chemicals company Elementis described a resilient performance during the first half of the year on Thursday, with results aligning with market expectations despite facing some challenges in the demand environment. The FTSE 250 firm said revenue for the first half of 2023 was down 6% year-on-year at $364m.

However, on an underlying basis, the revenue decrease was more limited art 4%.

The board put the drop in revenue down to lower volumes; however, it was partially offset by improved pricing and a favourable product mix.

Despite the revenue decline, Elementis said its adjusted operating profit reached $53m, up from $42m in the second half of 2022.

However, when compared to the prior year period, the adjusted operating profit was down by 10%, or 7% on an underlying basis, from $58m.

The company's adjusted operating margin for the first half came in at 14.4%, a marginal decrease from the 15.0% recorded in the prior year period.

Profit from continuing operations amounted to $26m, up from $18million.

One significant highlight of the interim results was the notable reduction in net debt.

As at 30 June, Elementis said its net debt stood at $255m, down from $367m at the end of 2022.

The improvement was mainly driven by the successful disposal of Chromium, which brought in proceeds of $139m.

"The group has performed well in a weak demand environment, reflecting the strength of its business model and the benefits of proactive self-help actions," said chief executive officer Paul Waterman.

"Personal care had a strong first half, gaining from innovative new product launches and new business success.

"Performance specialties demonstrated its resilience as our new streamlined operating structure enabled a material talc performance recovery and improved focus on higher value-added products in attractive growth markets.

"Whilst we are mindful of continued macro-economic risks, the group is well positioned to manage these impacts and deliver against full year expectations."

At 1003 BST, shares in Elementis were up 7,18% at 116.4p.

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