April 25 (Bloomberg) -- Elementis Plc climbed the most in two months in London after the British specialty-chemical maker said it made a “solid start” to the year amid rising demand for its additives for coatings and oil drilling.
Sales of specialty products advanced 7 percent in the first quarter, driven by acquisitions that lifted sales of coatings additives in the Americas, the London-based company said in a statement. The shares climbed as much as 7.3 percent, and were up 6.9 percent to 264.5 pence at 11:09 a.m. local time, making Elementis today’s second-biggest gainer in the Stoxx Europe 600 index.
Elementis is building on its purchase of Hi-Mar in North America and Brazil-based Watercryl by introducing industrial additives to its range of paint ingredients and increasing factory production rates. After hiring a Croda International Plc executive, Elementis is targeting expansion in personal-care products to make more use of its rare, white clay hectorite mineral deposit in California.
“We continue to benefit from the diverse nature of our business, both in terms of geography and end market,” Chief Executive Officer David Dutro said in the release.
Elementis is expanding the use of hectorite in oil-drilling additives as the mineral’s greater stability in high temperatures means it can be employed for extreme drilling projects, including deep-sea wells. It’s also used in cosmetics. Sales volumes to the oil and gas drilling industry jumped 61 percent in the first quarter, compared with average levels in the second half of 2012.
Earnings before interest and taxes are set to meet analysts’ estimates, the company said. The average prediction from eight analysts surveyed by Bloomberg is for an 10 percent gain in Ebit to $158 million.
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