Elementis sees FY performance at top end of market views

(Sharecast News) - Specialty chemicals company Elementis said on Thursday that its full-year performance is set to be towards the top end of consensus expectations amid an improvement in demand.

Current market forecasts are for 2021 adjusted operating profit of between $92m and $103m.

The company said its performance in the first quarter of 2021 has been strong and ahead of expectations. Revenue rose around 6% on the same period a year ago, which was largely before the impact of the Covid-19 pandemic. Elementis put this down to the successful execution of self-help actions and improved underlying demand, customer restocking and currency tailwinds.

Revenues in the coatings business increased "significantly", it said, with strong volumes across all geographies driven by new business wins, improved industrial coatings demand and customer restocking.

In personal care, the performance was slightly below the year before, as expected, with customer restocking offset by continued weak category demand for cosmetics and anti-perspirant deodorants due to Covid-related social and travel restrictions.

The performance of the talc division was broadly in line with the prior year, with strong industrial talc growth, driven by the continued rebound in automotive demand and robust coatings sales, offset by weaker sales to paper end markets.

Elementis said it had made a "strong" start to the year, with improved year-on-year profitability, thanks to increased demand across industrial end markets.

"This positive momentum has continued into the second quarter and demand remains healthy. For the full year, we are confident that further steady demand improvement from H2 2020 levels coupled with our self-help actions will drive improved financial performance, towards the top end of consensus expectations, and a reduction in leverage."