Croda Sells Italian Unit as Sales Growth Slows on Europe
Croda International Plc (CRDA), the world’s second-largest maker of cosmetic ingredients, said third-quarter continuing sales rose 0.5 percent as the company continued to reorganize with the disposal of its unit in Cremona, Italy.
Sales from continuing operations were 256.5 million pounds ($414 million), helping pretax profit before one-time items rise 4.4 percent to 59.3 million pounds, Snaith, England-based Croda said today in a statement.
The sale of the Cremona plant to a private Italian company, at a price “equivalent to the working capital value,” is to be completed by the end of the year, Croda said. The unit broke even in the third quarter on 7.8 million pounds of sales after losing money last year, it said.
Croda has seen weakening demand, particularly in Europe, and said third-quarter sales in July and August met expectations, although usually strong September slumped. Continuing-sales growth was led by a 16 percent increase in industrial chemicals to 20.9 million pounds. Revenue at the company’s largest operation, consumer care, dropped 2.7 percent to 140.9 million pounds, Croda said.
The fourth quarter “has started well,” Chairman Martin Flower said in the statement. “However, with the market remaining weak, particularly in Europe, we expect a similar performance” to the third quarter.
Croda fell 2.8 percent to 2,201 pence at the close in London yesterday. The stock has risen 22 percent this year, valuing the company at 3.08 billion pounds.
Net debt was reduced by 5.8 million pounds to 202.2 million pounds, Croda said.
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