Synthomer lowers business outlook on SBR weakness

http://www.petrotahlil.com/en/tiny/news-43628

Petrotahlil :Challenging trading conditions, particularly in styrene-butadiene rubber markets, have prompted aqueous polymers supplier Synthomer P.L.C. 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 a more challenging business environment for the chemicals industry.

While its Functional Solutions and Industrial Specialties 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." As a result, Synthomer's management expects SBR volumes to be approximately 10 percent behind 2018 levels and unit margins to be similarly lower than last year.

"A review of network utilization currently is 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 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 90,000 metric tons 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.

As a result, the company said it expects "underlying profit before tax for full year 2019 to be approximately 10 percent below 2018 and accordingly current consensus expectations."

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 U.S. and remained subject only to regulatory approval from the European and Turkish authorities, said the statement.

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