London – Challenging trading conditions, particularly in styrene-butadiene rubber (SBR) markets, have prompted aqueous polymers supplier Synthomer plc to cut its sales forecast for full-year 2019.
In a third quarter trading update, the London-headquartered group reported that a weakening global economy had created more challenging business environment for the chemicals industry.
While its Functional Solutions and Industrial Specialities units are performing in-line with last year, Synthomer’s results will be hit by increased weakness in the European SBR business.
In SBR, the group noted that challenging first-half conditions in Europe had not improved, while its Paper segment also “continued to remain particularly weak”.
Synthomer’s management, therefore, now expects SBR volumes to be approximately 10% behind 2018 levels and unit margins to be similarly lower than last year.
“A review of network utilisation is currently underway and an update on asset re-purposing and cost-base will be provided in conjunction with the full-year results next March,” it stated.
In contrast, Synthomer’s acrylonitrile-butadiene )NBR) latex business had another positive quarter with increased volumes and year-to-date unit margins remaining stable.
This continued growth was supported by the additional 90 kilotonnes of capacity introduced during the final quarter of 2018, the trading statement pointed out.
Looking ahead, Synthomer said the slower trading environment is expected to continue through the remainder of the year and into 2020, particularly in Europe.
Therefore, “underlying profit before tax for full-year 2019 to be approximately 10% below 2018 and accordingly current consensus expectations,” the UK group stated.
In a note about its proposed acquisition of Omnova Solutions Inc., Synthomer said that it continues to target completion in late 2019.
The deal had been cleared in the US and remained subject only to regulatory approval from the European and Turkish authorities, said the statement.