Croda nearly doubles first quarter profit; sees robust second quarter trading

By Aditi Samajpati

BANGALORE, April 28 (Reuters) - British chemicals firm Croda (CRDA.L) nearly doubled its first-quarter pretax profit, helped by restocking across most of its markets, and said it saw robust trading continuing into the second quarter.

The company, which makes ingredients for cosmetics and personal-care products, however, expects prices of raw materials for most of its products to rise.

"We do expect so far to have a good year, but the rest of the year might just be a little bit quieter than this," Finance Director Sean Christie told Reuters on Wednesday 28 April.

The higher levels of restocking may ease later in the year, he said.

Shares of the company fell 3.5 percent to 988 pence at 0906 GMT on the London Stock Exchange, while the FTSE Mid 250 Index .FTMC was off 1.9 percent.

Analyst James Tetley at Brewin Dolphin said the shares were down due to broader market concerns on euro zone debt [nLDE63R0GM], but the sentiment on Croda remained positive in general.

"The first quarter was much better than people expected. So, even if later in the year is not quite so good, I think the full year will still be better than people were expecting before," Tetley said, upgrading the stock to "buy" from "add".

"The company now looks set to continue on a strong earnings growth path, which should help reduce its debt position," Citigroup analyst Sophie Jourdier wrote in a note to clients.

Croda ended the first quarter with net debt of 292.7 million pounds, little changed from the end of 2009.

Deutsche Bank's Martin Dunwoodie said Croda was well positioned to pass on higher raw materials costs to consumers.

For the three months to end-March, the company posted a pretax profit of 42.4 million pounds ($64.6 million) from continuing operations, compared with 21.7 million pounds a year ago.

Revenue rose 14.7 percent to 264.7 million pounds. ($1=.6559 Pound) (Reporting by Aditi Samajpati in Bangalore; Editing by Maju Samuel and Vinu Pilakkott)