LONDON The Cookson Group plc (London) has seen an improvement in performance in the first six months of its financial year. At a constant currency rate revenue was £1,058 million (about $2,100 million), up 26 percent while trading profit was £113 million, (about $225 million) up 30 percent.
In the first half of 2008, the net translation impact of currency changes compared to the same period last year was to increase revenue by around £57 million (about $114 million) and trading profit by around £9 million (about $18 million).
The electronics division trading profit of £29.9 million (about $60 million) was 2 percent higher than the same period last year at constant exchange rates and 12 percent higher at reported exchange rates. Revenue of £321 million (about $640 million) was 11 percent higher at constant exchange rates, 19 percent higher at reported exchange rates.
The higher revenue principally reflected the ‘pass through’ to customers of the significantly higher tin and silver prices in Assembly Materials’ sales of solder products. Excluding both this impact and sales of precious metals related products in the chemistry product line, underlying revenue was 1 percent lower than the same period last year.
The decline in underlying revenue principally reflects some slow down in the growth of electronic equipment production due to weakening of consumer demand, particularly in the U.S. It also reflects a continuation of our strategy to focus on higher margin, more value added product lines and selectively cut back on some more commoditized products, such as leaded solder bar and non-proprietary electro-plating chemicals.
The higher trading profit reflected the product mix effect plus the benefits of the restructuring of Assembly Materials’ U.S. operations and the opening of a factory in Monterrey, Mexico, completed towards the end of last year. The results also benefited from the growth of the scrap solder recycling operation in the U.S. A similar recycling plant is being set up in Guangxi Province, China, and should start operations in the second half of 2008.
Construction of the new £9 million (about $ 18 million)chemistry factory in China is expected to commence shortly, for completion in the second half of 2009.
In February 2008, the transfer of European solder paste production from Ashford, England to Hungary was announced for completion in early 2009. This initiative will result in annualized savings of £1 million (about $ 2 million)from the beginning of 2009. The figures have also been boosted by solar panel production, the end- market for the company's Vesuvius’ Solar Crucibles, has continued its very high growth trend.
Fused silica revenue grew 29 percent to £35 million (about $ 70 million)driven by a 64 percent growth in sales of Solar Crucibles. In March 2008, the extension to the Solar Crucible facility in Moravia, Czech Republic, started production and two new Solar Crucible factories are currently under construction in China, for completion by year end.