THE WHAT? Croda has reported a drop in annual profit, put down to the ongoing trade war between the U.S. and Beijing, as well as a change in Chinese trade laws and the ongoing threat of the Coronavirus.
THE DETAIL In its full year results to Dec 2019, the British chemicals company adjusted pre-tax profit was down 2.8 percent year on year at £322.1m, lower than the £327.4m industry expectations. Adjusted sales fell 0.2 percent to £1.265bn.
The company’s personal care division was down 3 percent. Croda shares fell 4.3 percent following the news.
THE WHY? The profit fall was attributed to the ongoing trade war with the U.S. and China, with the company stating, “The trade war between the U.S. and China significantly impacted demand for Croda products … sales were adversely impacted by significant ingredient destocking in the summer months as customers adjusted inventory to the lower than expected demand.”
Likewise the implications of the Coronavirus was also said to have affected consumer demand, with the company only just reopening sales offices and two production units following the outbreak. Meanwhile the change in legislation restricting Daigou sales from South Korea and Japan into China has also made an impact.