What. The share price of Croda International (LSE: CRDA), the British speciality chemicals company, is currently down just over 10% following publication of a second quarter trading update, ahead of the close peri0d before it issues its interim results for the six months to 30 June (due on 22 July).
So what. In an interim management statement published on 24 April this year, Croda has said that it expected its second quarter performance to be similar to the first quarter, for which it had reported pre-tax profits of £65.2m. However, the company now says that it expects its second quarter pre-tax profits to be approximately 8% below those of quarter one.
Croda blames the downgraded pre-tax profit expectation on adverse exchange rates (which it had said in its April interim management statement would remain an issue) and also on weaker industrial chemical sales and “a slightly less favourable product mix” in its consumer care business.
Now what. Looking ahead, Croda says that whilst it expects to achieve underlying profit progress in 2014, pre-tax profits for the full year are now anticipated to be below those of 2013.
Following this m0rning’s 10% tumble Croda’s share price is now down just over 11% so far this year, compared with the admittedly modest 0.5% gain made by the FTSE 100. However, longer-term shareholders will be pleased by the 319% increase in Croda’s share price over the past five years, during which the FTSE 100 index has only increased by 56%.
