Croda International Warns of Decrease in Adjusted Operating Margin
At 0821 GMT, Croda International shares took a hit, dropping 1.6% as the company issued a warning regarding a potential decline in a crucial profit metric for the year.
Adjusted Operating Margin Outlook
The London-based specialty chemicals firm projects a decrease of two to three percentage points in its adjusted operating margin for 2024. This dip is attributed to varying year-on-year business mix effects.
Effects on Revenue Streams
Notably, Croda expects no revenue from the sale of Covid-19 lipid chemical compounds this year, impacting its performance. Additionally, the sluggish sales volumes in sectors like crop protection and industrial specialties are contributing to the challenge.
Uncertainty Looms Over Recovery
With market conditions remaining uncertain, the outlook for each business segment within Croda is hard to gauge accurately, leading to a more extensive range of potential outcomes for the year.
Revenue Forecast
Despite these setbacks, the company anticipates mid- to high-single-digit sales growth for the year, excluding last year's Covid-19 lipid sales. The increase in sales volumes is forecasted to offset the decline in price/mix.
Profit Projections
Croda anticipates an adjusted pretax profit ranging between £260 million and £300 million for the year. Looking ahead, the company is optimistic about a performance upturn from 2025 onwards, promising improved returns for shareholders.
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