Synthomer withdraws FY guidance as Covid-19 weighs on performance

(Sharecast News) - Chemicals business Synthomer withdrew full-year guidance on Wednesday adding that it was cutting capital expenditure and executive salaries in order to weather the Covid-19 storm.
Synthomer said the pandemic and associated lockdowns had started to weigh on its trading, with sales in the automotive and oil sectors hurt in the second quarter, leading the group to cut capital expenditure for 2020 to around ?50m - down from the ?73.5m originally anticipated.

Executives and directors also chose to freeze their salaries at 2019 levels and delayed any further review until October.

However, the FTSE 250-listed firm did note that it had seen strong demand for nitrile, used to make medical gloves, and highlighted that underlying earnings in the three months ended 31 March were up 5% year-on-year, in line with expectations.

Synthomer, which it continued to operate 37 of its 38 global manufacturing sites, also withdrew its full-year guidance and made no mention of its dividend plans.

"Given the unprecedented uncertainty around the impact of Covid-19, it is unclear what impact this will have on the group's financial performance for the year," said the group.

"As such, the group is withdrawing its previous guidance for the year ending 31st December 2020 and will update the market when there is better visibility."

As of 0840 BST, Synthomer shares were up 3.30% at 287.80p.