Synthomer rebounds to profit as £13m cost cuts offset sluggish demand
Chemicals group Synthomer has surged back into the black, defying sluggish demand by banking £13m through cost-cutting measures.
The London-listed firm, which is headquartered in Essex, made an underlying profit of £2.5m in the first six months of 2024, up from an underlying loss of £6.7m in the same period of 2023. Its shares jumped 3.8 per cent to 244.50 in early trades after it posted the increase.
Symthomer saw its revenue remain relatively unchanged year on year, hitting £1.05bn during the six months, up from £1.04bn in 2023.
The group’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) was £76m in the first half of 2024, up year on year from £72m.
Synthomer said that its activity levels had “continued to incrementally improve” during the six months but that they remained “significantly below” their pre-pandemic levels.
It added that despite the slight uptick in activity levels that it had seen “but “no evidence of sustained end-market demand improvement” at this stage.
However, the group said it had mitigated the impact of this by via £13m benefits from cost savings and reliability improvement programmes during the period.
As a result, Synthomer said it expected its full year results to be in line with previous forecasts.
Synthomer CEO Michael Willome said: “While we remain cautiously encouraged by trading in some end markets since the start of the year, evidence of a broad-based recovery in demand remains limited.
“Despite this, we have made earnings progress by delivering on our cost and operational efficiency programmes, and we continue to strengthen our strategic positioning for the future by focusing on our speciality businesses, creatively managing our resources and enhancing our operating leverage.”