Elementis on track to meet FY market views after solid Q4

Specialty chemicals company Elementis said on Thursday that it was on track to meet market expectations for the full year as it hailed a solid fourth-quarter performance.

In an update for the three months to the end of December, the company said it performed well despite weaker trading conditions, as the macroeconomic environment deteriorated through the period.

Underlying operating profit for 2022 - including discontinued operations - is expected to come in between $120m and $23m, in line with market expectations and significantly above the prior year.

Elementis said the coatings segment performed well, with pro-active pricing actions and a product mix improvement offsetting weaker demand in European and Asian markets and customer destocking.

Personal Care continued to perform strongly, it said. In Cosmetics, pricing actions more than offset continuing cost inflation and some weakening of demand in certain regions.

Finally, the performance of the talc business remained "materially below" the prior year, as continued volume weakness in European markets, in particular automotive, and higher energy and logistics costs weighed.

Elementis said net debt at the end of 2022 is expected to be around $367m. This represents a leverage ratio of 2.2x net debt to EBITDA, down from 2.6x at the start of the year. It also said on Thursday that the sale of the chromium business remains set to complete in the first quarter of the year and to deliver net cash proceeds of about $107m.