LONDON (Alliance News) - Synthomer PLC said Friday it now expects full-year 2014 pretax profit to be broadly in line with 2013, as strong competition in Asia and the strengthening of sterling continues to hamper its performance.
The speciality chemical company said strong competition between glove manufacturers had continued in its Asia and Rest of the World segment, which has caused margin pressure in its Nitrile business, further exacerbated by weak pricing of Butadiene and customer de-stocking.
As a result, Synthomer said its operating profit in Asia for the first half of the year will be around GBP4 million behind its previous-year result of GBP11.5 million. However, it said it expects demand for nitrile latex to grow and unit margins to firm up in the second half.
Sterling continued to strengthen during the period, which Synthomer expects to lead to a GBP5 million hit to operating profit in the full year, GBP1 million more than it originally expected.
The FTSE 250 company is faring better in Europe and North America, where trading continued in line with expectations as volumes were ahead of the previous year in construction and coatings, functional polymers, and performance polymers. In these regions, average cash margins in the second quarter of 2014 were similar to the first quarter, Synthomer said.