July 23, 2013 / 9:32 AM / 4 years ago

UPDATE 1-Weak auto market, crop care sales hold back Croda profit

* H1 pretax profit from cont. ops up 6 pct to 133.1 mln stg

* H1 sales up 1 pct at 562.7 mln stg

* Performance Tech division sales hurt by weak European auto market

* Shares fall 3 pct

July 23 (Reuters) - Croda International Plc reported an improved profit in the first half, but growth was held back by the British speciality chemical maker’s exposure to the European auto market and lower sales at its crop care business.

For the six months ended June 30, Croda reported a 6 percent increase in pretax profit from continuing operations as the company sold higher-margin products across its businesses .

Croda, which makes chemicals used in personal care and home care products as well as in lubricants and coatings, said lower interest rates, lower borrowing and reduced pension funding interest also propped up profit during the first half.

“Croda’s interim results are in-line compared to consensus but slightly disappointing in our opinion,” Canaccord Genuity analyst Alicia Forry said in a note. The brokerage has a “sell” rating on the stock.

Total Sales rose marginally to 562.7 million pounds ($864.84 million). Sales in its performance technologies division, which serves the auto market, fell slightly, hurt by continued weakness in the European automotive sector.

Sales at its crop care business were also lower as a result of a late start to the corn planting season. The crop care division makes chemicals that go into pesticides, fungicides and insecticides and is a part of Croda’s key consumer care unit.

However, Croda said the decline in crop care sales had bottomed and that it expects both the crop care division and the performance technologies division to return to growth for the rest of the year.

“Given the improvement in demand trends along with positive margin mix, we expect Croda to meet consensus expectations and do not expect any change to consensus estimates for 2013,” Berenberg analyst Jaideep Pandya wrote in a note.

Shares in the FTSE-100 company were down 3 percent at 2,495 pence at 0926 GMT on the London Stock Exchange. They have risen 8 percent so far this year.

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