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Synthomer shares plunge on lowered annual profit outlook

(Reuters) -Shares of Synthomer Plc slumped to their lowest in more than a decade after the polymer maker slashed its annual core profit projections on Thursday, hit by destocking of medical gloves and declining demand due to macro challenges.

The company now expects its full year earnings before interest, taxes, depreciation and amortization to be 10%-15% lower than its previous expectations, it said in a trading statement.

Synthomer has been saddled with a high inventory of medical gloves post the pandemic, with reduced demand. The group has been destocking this inventory, which "significantly" reduced its synthetic rubber output, it said.

"Whilst underlying end-customer demand for medical gloves remains similar to pre-pandemic levels, the destocking impact is not expected to abate before the end of 2023," Synthomer added.

The company said its production volumes fell further in the third quarter, while core elastic polymers business is likely to post only "modest profitability" in the second half of the year.

Meanwhile, the deteriorating macroeconomic conditions led to reduced demand in construction and coatings end markets, hurting trading in Europe, it added.

Shares of the London-listed company tanked 32% to 94 pence as of 0750 GMT, hitting their lowest level since 2010.

(Reporting by Muhammed Husain in Bengaluru; Editing by Dhanya Ann Thoppil)