Chromium
Sales in Chromium for the first half of 2004 were £53.1 million, down 15 per cent versus the same period last year. On a constant currency basis sales were down 7 per cent. Overall volumes were lower by 3 per cent versus the first half of 2003, largely due to volumes lost during the first round of price increases. The loss of CCA business for residential use in the US was replaced by sales into Asia, albeit at lower margins. Average prices improved throughout the first half of 2004, but were still 5 per cent lower than the first half of 2003.

Chromium reported an operating loss of £1.3 million before exceptionals for the first half of 2004, versus a profit of £4.8 million for the same period last year. In addition to the lower constant currency sales, energy costs increased by £1.2 million and currency negatively impacted operating profit by £1.8 million.

Specialty Rubber
Sales increased by 7 per cent in the first half of 2004 to £22.7 million and overall currency effects were minimal. Volumes were up 6 per cent and average prices were up 2 per cent.

An operating loss of £0.2 million was recorded for the first half of 2004, versus break even for the same period last year. Higher sales were offset by higher raw material costs plus additional spending in preparation for the ERP implementation planned for later this year.

Exceptionals
Net exceptional charges before tax were £1.0 million (2003: £0.1 million) and comprised redundancy costs incurred at Chromium's Eaglescliffe site following a review of business processes.

Financial review of operations continues on the next page >
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