U.K specialty chemicals company Croda International PLC (CRDA.LN) Tuesday met forecasts with a 14% fall in first-half pretax profit, supported by a recovery in its Industrial Services division which the group expects to return to profitability in the second half.

Chief Executive Officer Mike Humphrey said in a statement that "our core Consumer Care business continues to demonstrate resilience," while the company noted that it is confident of making good progress in the rest of the year.

The company said pretax profit from continuing operations fell to GBP43.6 million in the first half to end June, a 13.8% decrease compared to first half of last year. Revenue from continuing operations fell 3.6%, to GBP447.5 from GBP464.1 over the same period.

Croda's pretax profit from continuing operations for the first half was largely in line with the GBP45.3 million figure predicted by a Dow Jones survey of three analysts. First-half revenue from continuing operations had been forecast to be GBP465 million.

Cazenove analyst Karan Khemnani said the results were largely in line with market expectations. He cited the progress in the Industrial Specialties division as particularly positive news. He did add that the "the company won't be growing quickly next year" but added that the results look sound and it looks as though the underlying commodity chemicals market has hit bottom, setting the stage for a recovery.

The company, whose oils are used in cosmetics and personal care products made by companies such as Procter & Gamble Co. (PG) and Estee Lauder (EL), said that there was a 16.2% currency benefit in the first half as the sterling strengthened against the dollar and euro, although the pound is still trading below rates seen in the first half of 2008.

Croda said that there was a GBP47.0 million reduction in net debt to GBP351.1 million in the first half, which Cazenove's Khemnani said was good news.

The company lifted the interim dividend by 4.8% to 6.5 pence per share from 6.2 pence for the first half of last year. The company noted that this increase reflects "our confidence in the underlying strength of the business and the markets in which it operates."

On July 8, Croda said it was closing a manufacturing facility at Wilton on Teesside in the U.K., with operations set to cease in January 2010. The site employs 125 people and the closure will create a one off cost of GBP13 million with a GBP5 million exceptional write down, although the company expects annual savings of GBP5 million from the closure.

Croda shares fell after the update and at 0707 GMT stood 6% lower at 537 pence per share in a flat London market. The stock is down 19% from year-ago levels.

Company Web site: www.croda.co.uk/

-By Eric Jones, Dow Jones Newswires; 44-207-842-9295; eric.jones@dowjones.com