LONDON—Synthomer P.L.C. saw first-quarter volumes across the group's continuing businesses reach their highest levels since the second quarter of 2022.
The recovery reflects "improving activity levels in some of the segments of the group that were previously more challenged," the company said in its trading update for the first three months of 2024.
Synthomer cautioned, however, that "this partially reflects some short-term customer restocking" and that it has yet to see sustained improvement in market demand.
First quarter "continuing group" earnings (EBITDA) was higher than the prior-year period, helped by "robust pricing, particularly in our specialty businesses, ongoing cost-reductions and lower energy costs," according to the London-based producer of rubber latex-based materials, products and other specialties.
Continuing group revenue declined, however, due to lower raw materials prices.
"While there are signs of improvement in some of our end markets, visibility of a sustained recovery remains elusive at this stage," Synthomer CEO Michael Willome said, noting the company is "cautiously encouraged" by the uptick in trading.
"We, therefore, continue to strengthen Synthomer's position for the future, by delivering our specialization strategy, optimizing our portfolio and cost position," Willome added.
The group reported progress with its business strategy, including a successful tender for $402 million (€370 million) of bonds due 2025 in April, which improved its debt position.
In May, Synthomer completed the divestment of its compounds business, "increasing our focus on core end markets and further reducing site complexity."
Over the last 18 months, the group has reduced its manufacturing footprint by 10 sites to 33, through "a combination of non-core divestments and rationalization activity, with further actions underway."
In November 2023, Synthomer completed a reorganization of its styrene butadiene rubber (SBR) latex operations in Europe as part of a move to streamline operations globally.
With the reorganization, the group started a process to divest its European paper and carpet operations, following its exit from "loss-making" paper and carpet operations in the U.S.
