London – Synthomer plc expects its earnings to nearly double in 2021, helped by “continued exceptional performance” within its nitrile latex business.
The UK chemicals group anticipates EBITDA (earnings) to be in excess of £450m (€517 million) this year, up from £259 million reported in 2020.
The outlook, said Synthomer in a 21 April first quarter trading update, reflects a further rise in the one-off profitability of its nitrile latex business and the strengthening of the underlying trading conditions.
The group expects that the nitrile latex business will return to “more normalised levels” in 2022.
Overall, the group said it saw a strong underlying trading across all its division in the first quarter of 2021.
The performance elastomers division performed strongly during the three months, impelled by Covid-driven “exceptional demand” for nitrile latex.
The group said conditions in its styrene butadiene rubber (SBR) latex business also continued to improve, with all segments except paper trading ahead of the comparative period in 2020.
Following the strategic review of its European SBR network, Synthomer said it completed the consultation in Marl, Germany, and the planned closure of the Oulu, Finland site at the end of the first quarter.
Synthomer disclosed plans to review its SBR latex assets in the fourth quarter of 2019.
the move, it said, aimed to tackle lower plant utilisation rates resulted from slower economic activity and ongoing weaker demand for coated graphic paper.
The company produces SBR latex at four European sites in Germany, Italy, Finland and Austria.
SBR latex is typically used for the coating of graphic and packaging paper, as a binder in the production of carpets, and in mattress and footwear applications.