Synthomer hard hit by nitrile rubber decline

London – Synthomer Group has linked a 46% year-on-year drop in first-half earnings (EBITDA), to £173.1 million (€205.3 million) - on 8.6% higher sales of £1.3 billion - to a decline in its Performance Elastomers’ nitrile rubber business.

Performance Elastomers revenues dropped 31.8% year-on-year to £376.2 million, as volumes fell 21% to 374.2 kilotonnes. Earnings (EBITDA) came in 81.3% lower at £41.8 million.

Demand for nitrile butadiene rubber related to the Covid fell back from an “exceptional” pandemic-related peak of a year ago, the UK group reported 2 Aug.

“Current destocking has meant that demand has softened substantially, resulting in lower nitrile volumes, revenues and EBITDA the first six months of 2022,” said Synthomer.

Margins in ‘health and protection’ were significantly down, reflecting market conditions driven by destocking of nitrile gloves, added the group, though it  described the decline as “temporary.”

Volumes in Synthomer’s overall Performance Materials business,  which also includes compounds and foam activities, fell 10%, against a strong comparative period.

Synthomer went on to state: “we believe that underlying demand for nitrile gloves will continue to grow with broader applications in catering, entertainment, security and health-related industries. The business is thus well positioned to capture the long term growth."

With regard to the full-year outlook, chief executive Michael Willome said stock levels in the global nitrile rubber glove industry “remain high, delaying a return to pre-pandemic NBR growth.

Although we, like our customers, have paused some investment in capacity – nonetheless we continue to look for opportunities to ensure we remain well-placed as demand recovers.”