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UPDATE 1-Cookson sees lower demand from steel industry
July 25, 2012 / 9:53 AM / 5 years ago

UPDATE 1-Cookson sees lower demand from steel industry

* H1 adj. pretax profit 127.6 mln stg

* H1 revenue 1.3 bln stg

* Shares down 7 pct (Adds background, analyst comment; updates share movement)

July 25 (Reuters) - Britain’s Cookson Group Plc said its first-half profit was dragged down by a loss at its fused silica business, and that it expected demand from the steel industry to soften as a result of slowing industrial production, particularly in Europe.

Cookson, which receives about half of its revenue from supplying ceramic products to the steel and foundry casting markets, expects these industries to be weaker in the second half as steel demand takes a hit from weaker economic growth in China and Europe’s protracted debt woes.

“There have been more recent signs of general weakening in the global economy and slowing industrial production, most notably in Europe,” the company said.

Cookson said pretax profit for the first half fell to 127.6 million pounds ($198.12 million), excluding certain items, from 132.1 million pounds a year earlier. The fused silica business posted a loss of 5 million pounds.

A continued deterioration in the fused silica solar business hurt first-half results, James Tetley of N+1 Brewin said.

The fused silica solar business has been coping with a fall in demand for its solar crucibles used to produce photovoltaic panels as customers cut production due to high solar panel inventories globally.

Revenue fell 4 percent on an underlying basis to 1.3 billion pounds.

Cookson also said it expected to update shareholders about its ongoing strategic review before the end of this year.

The company said in May that it was conducting a review which could see the company split its two major divisions - engineered ceramics and performance materials.

Shares in Cookson, which have lost 7 percent of their value since the strategic review was announced, were down 7 percent at 552.2 pence at 0945 GMT on Wednesday on the London Stock Exchange. ($1 = 0.6441 British pounds) (Reporting by Abhishek Takle in Bangalore; Editing by Don Sebastian)

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