Solid demand keeps Elementis recovery on track

CHROMIUM producer Elementis continued its recovery with good demand in all of its markets in the first six months of the year.

Profits rose from 14.4 million to 19.6m in the half -year to June on sales of 198m, down from 211m.

Those figures included its global pigments business, which Elementis has agreed to sell to Rockwood for $140m (68.9m) in cash. "Demand in most of our key markets was positive, which enabled us to grow our underlying sales by 5 per cent," said the company, which has a market capitalisation of 460m.

Operating margins at the speciality products' division rose from 15 to 21 per cent. Underlying sales improved by 4 per cent, with good growth in oilfield and European and Asia Pacific coatings sectors.

Chromium experienced robust demand for chromic acid, while chrome oxide sales benefited from improved demand in North America and Europe following structural tax changes in China.

"Overall market dynamics have been positive for the group in the first half of 2007 and we expect this trend to continue into the second half of the year," the group added.

The interim dividend rose by 8 per cent to 1.3p.