Synthomer (LSE:SYNT) PLC reported strong trading across its business for 2021 and forecast a doubling of underlying profit, in line with market expectations, but cautioned that the easing of the COVID-19 pandemic has subdued demand for nitrile latex for medical gloves.
EBITDA for the year to 31 December 2021 is expected to be around £518.4mln, compared with £259.4mln in 2020 and £177.9mln in 2019.
The polymer, sealant and chemicals specialist attributed last year’s “exceptional performance” to a positive contribution from Omnova, strong organic growth and peak margins in the nitrile-butadiene rubber (NBR) business, which supplies nitrile latex for medical gloves.
Demand for nitrile gloves soared during the pandemic, following measures to prevent the spread of the COVID-19 virus.
Synthomer said NBR margins have now normalised to pre-pandemic levels, earlier than the company had previously predicted, and it therefore does not expects any NBR pandemic premium in its results for the current year.
It also noted that NBR demand has been subdued so far this year due to high inventory levels of medical gloves and reduced demand due to the easing of the pandemic.
The company said trading conditions in NBR are expected to normalise by the end of the first half of 2022 with market growth returning to 2019 levels in the latter half.
Its other divisions have seen an "encouraging" start to 2022 and the company said it is on track to complete the acquisition of Eastman's Adhesives Resins business in the first quarter.
It continues to look for value-accretive bolt-on acquisitions.
“The board remains confident that the benefits of recent acquisitions, continued investment in new capacity and its proven growth strategy will underpin growing sustainable profits in the coming years,” the company said.