MOSCOW (MRC) -- Synthomer (Harlow, UK) has raised its guidance for full financial year 2020 EBITDA earnings by 10% compared to its prior forecast due mainly to a stronger trading performance in the fourth quarter, said Chemweek.
The company’s board has also been informed by CEO Calum MacLean that he intends to stand down as CEO by January 2022. In a trading update issued ahead of Synthomer’s scheduled release of its full-year results on 4 March, the company says a combination of stronger trading across its three major divisions means it now expects EBITDA for 2020 to be approximately GBP255 million (USD348 million), about 10% ahead of previous guidance issued mid-October.
Synthomer’s performance elastomers business has “continued to perform strongly,” it says. Positive trends seen in its nitrile latex business during 2020 continued through the fourth quarter, with overall performance “ahead of expectations,” it says. Conditions in its styrene-butadiene rubber (SBR) latex business also continued to strengthen in the quarter, with all SBR segments except paper trading ahead of the prior-year period.
The functional solutions business also saw a sustained improvement in the fourth quarter, with Synthomer’s consumer-facing and industrial end-markets “remaining strong, with exception of the oil and gas business unit,” it says. “We have seen activity levels above normal seasonal levels with overall performance ahead of expectations,” it adds.
The company’s industrial specialties segment also saw a strong finish to the year, with the laminates and films business “trading particularly well” and the division performing ahead of the equivalent quarter in 2019, it says. Synthomer remains “highly cash generative” and now expects its proforma leverage to reduce to 1.9x net debt to EBITDA as of 31 December 2020, according to the company.
In a brief outlook, it says that while it will continue to adapt its operations in response to the ongoing COVID-19 pandemic, it expects “no meaningful disruption to business. The board is confident that the benefits of the Omnova acquisition, recent investment in new capacity, further efficiency measures, its proven growth strategy as well as continued strength in performance elastomers, will underpin strong EBITDA growth in 2021.” Synthomer completed its acquisition of Omnova Solutions in April 2020.
CEO MacLean intends to stand down in January next year after six years in the role, once a successor is in place. The process to find a new CEO is already underway, says the company.
As per MRC, Synthomer (Harlow, UK) says it has decided to close its styrene-butadiene-rubber (SBR) production site at Oulu, Finland, by the end of the first quarter of 2021. The company confirmed in August that it was in a consultation process with employees at Oulu concerning future options for the facility.
According to MRC's ScanPlast report, September total production of unmixed PVC grew to 86,000 tonnes from 75,500 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation. Overall output of polymer were 718,500 tonnes in the first nine months of 2020 versus 720,500 tonnes a year earlier, only two producers raised their production volumes, and RusVinyl cut its output.