(Alliance News) - Synthomer PLC on Wednesday said it has experienced no significant issues with regards to raw material supply, the distribution of finished goods or the availability of operating personnel, despite the current Covid-19 pandemic.
The aqueous polymers supplier said it has seen a solid start to 2020, with earnings before interest, taxes, depreciation, and amortisation in the three months to the end of March 5% ahead of prior year's first quarter.
By division, Synthomer said its Nitrile Butadiene Latex business continues to benefit from additional 90,000 tonnes of capacity introduced in the final quarter of 2018 at the Pasir Gudang site.
The company reported higher volumes due to Covid-19, although unit margins were marginally lower.
Turning to the Functional Solutions division, Synthomer said volumes were lower than a year ago but unit margins grew as a result of improved mix and softer raw material markets.
In the Industrial Specialties unit, performance in the first quarter has continued in line with expectations, Synthomer said.
Looking ahead, the company said its sales into industrial markets including Automotive and the Oil & Gas sector have been hurt so far in the second quarter of 2020.
However demand for Nitrile continues to be strong particularly as a result of the Covid-19 pandemic.
Synthomer also said it expects to reduce its capital expenditure for 2020 to GBP50 million from the GBP73.5 million originally anticipated.
The company's board, executives and senior management have frozen their salaries at 2019 levels and delayed any further review until October 2020.
In addition, Synthomer withdrew its 2020 guidance, saying that it is unclear what impact Covid-19 will have on its financial performance.
FTSE 250-listed Synthomer's shares were trading 3.8% higher in London on Wednesday at 289.20 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Synthomer (SYNT)