FTSE 100 giant Croda endured a tricky start to 2019, hindered by the ongoing trade dispute between the US and China.
The chemicals specialist, headquartered in East Yorkshire, saw its pre-tax profits slide by 2.5 per cent in the first six months of the year.
Croda’s Personal Care sector was “significantly impacted” by US President Donald Trump’s ongoing dispute with China, and blamed challenging market conditions for its weaker performance.
Despite the tough start to 2019 though, Croda’s CEO Steve Foots said he expected an improved performance in the second half of the year.
He said: “We have delivered a resilient performance in challenging market conditions and against strong prior year comparatives, testament to Croda’s focused strategy.
“Although Personal Care was significantly impacted by the US/China trade dispute and new sales legislation in China, we saw growth across the rest of the sector.
“An excellent performance in Life Sciences ensured overall progress in consumer markets, whilst Performance Technologies slowed in line with the wider industry, due to softer end markets in automotive and polymers.”
Sales at Croda actually rose 2.4 per cent compared to the same period last year – from £642.2m to £657.9m.
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However, pre-tax profits dropped from £175m in the first half of 2018, to £170.6m so far this year.
Croda said its core business results remained in line with expectations, and said completion of its new biosurfactant plant in North America this autumn would create new opportunities for growth.
Mr Foots said: “We have a strong pipeline, a robust business model and a strategy to leverage innovation, customer intimacy and sustainability.
“Life Sciences is expected to show continued progress and in Personal Care we anticipate the US remaining subdued while Asia recovers progressively.
“Performance Technologies is likely to remain softer until end markets improve. Based on the current challenging economic conditions remaining unchanged, overall we expect a slight improvement in performance in the second half of the year versus the prior year comparator.”
Croda is split up into three major departments – Personal Care, Life Sciences and Performance Technologies.
While its Life Sciences sector performed well in the first half of 2019 – with profits and sales both up – Personal Care and Performance Technologies both took a hit.
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Croda is headquartered near Goole in East Yorkshire, with a base also in Hull.
The company recently completed the acquisition of energy specialist Rewitec for an undisclosed fee.