Croda International PLC (LSE:CRDA) has slashed profit guidance after reporting continuing de-stocking by customers has depressed sales.
The speciality chemicals firm now expects full-year 2023 adjusted pre-tax profit between £300 million and £320 million, down from £370 million to £400 million.
In a statement, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of de-stocking and a weaker demand environment.
This has continued to depress sales volumes, meaning overall performance for the period was therefore weaker than originally anticipated.
In Consumer Care, sales volumes in the Beauty Care business were lower than expected in July and August, with North America not recovering from quarter two.
But there has been an improvement in September and the firm expects this to continue through the remainder of the year, albeit from a lower base.
Second-half operating profit margin is expected to be lower than in the first half of the year due to the negative leverage impact of low volumes and adverse business mix.
In Life Sciences, sales have weakened further in crop protection and improvement is now expected to commence in the first half of next year.
Industrial Specialties continues to be hit by weak industrial demand globally and is not expected to be profitable in the second half of the year.