Croda International PLC on Friday said sales volumes have come under pressure from continuing customer destocking, and it predicts an annual profit fall.

Shares were down 12% at 5,328.00 pence each on Friday morning in London.

The Yorkshire, England-based chemicals firm said that while sales volumes in its Consumer Care arm were up on the final quarter of 2022, they were down by a double-digit percentage year-on-year for the five months ended May 31.

‘Price increases implemented in 2022 and favourable foreign exchange rates so far in 2023 have helped to offset this impact, with revenues broadly flat versus the first five months of 2022. However, principally due to the lower sales volumes, operating profit margin has remained at a similar level to the second half of 2022,’ the company said.

In Life Sciences, Croda said Crop Protection started the year well, but the business is now experiencing rapid customer destocking. As a result, Life Sciences’ operating profit margin is being hurt by an adverse sales mix in the year to date, including lower sales for Covid-19 applications in the Pharma business.

Croda said it achieved pretax profit of £143 million in the first five months of 2023, helped by ‘minimal net finance costs’.

With customer destocking set to continue in its consumer-focused division, Croda now predicts 2023 pretax profit of £370 million to £400 million, down as much as 52% from £780.0 million in 2022.

Croda will release its half-year results on July 25.

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