Devro highlights progress in China

03-Aug-2014 - Last updated on 04-Aug-2014 at 08:36 GMT

Devro said lower production costs in the US could save £8m annually

Scottish collagen casing manufacturer Devro said it had made "significant progress" on its business developments in China, in its interim results for the six months to 30 June 2014.

Despite progress abroad, revenue for the group decreased from £118.9m for the comparable period in 2013, to £109.7m, with profit before tax down from £16.2m to £1.6m.

However the impact of currency translation was said to be a factor, with the impact of exchange movements on its operating profit adverse to the tune of £2.2m, "primarily related to the translational effects following the strengthening of the sterling".

Around £16m has also been accounted in terms of full-year exceptional items, due to the restructure of its Scottish operations.

Devro saw strong volume growth in China, Japan and Germany, as well as an increase in volumes sold in the US, while sales in the UK and Russia increased in the second quarter.

It said that major investment projects for new plants in the USA and China was also on schedule, with expected completion dates set for 2016. According to Devro, the lower production costs in the USA would yield £8m annual savings from mid-2016.

Volumes declined in a number of its emerging markets however the firm believes that longer term demand remains strong.