Elementis’ H1 pre-close update highlights further pressures within Chromium export markets. The relative strength of the US dollar has created a challenging competitive environment in Eastern Europe in particular and, as a result, Chromium sales and margins outside of North America are expected to be materially lower than the previous year. Despite good progress in Specialties and a steady performance from Chromium in North America, earnings per share for the year as a whole will fall below previous expectations. We reduce our PBT and EPS forecasts by 12% in all three forecast years, assuming no recovery in Chromium over the period. One strong positive in the announcement is confirmation that the net cash position at the end of the year is still expected to be ahead of the prior year (implying no change to DPS forecasts), which should provide support, given the implied 5% yield.
