Shares of Croda International, the East Yorkshire-based FTSE 100 speciality chemicals giant, fell about 13% on Friday after it published a trading update for the period ending May 31, 2023, which warned of falling sales volumes, customer destocking and flat revenues.

Croda said full year 2023 group profit before tax is now expected to be between £370 million and £400 million.

Croda’s 2022 adjusted profit before tax was £496.1 million.

“In Consumer Care, whilst sales volumes are up compared to the final quarter of 2022, they remain down double-digit percentage compared with the same period last year as a result of customer destocking continuing through the second quarter,” said Croda.

“Price increases implemented in 2022 and favourable foreign exchange rates so far in 2023 have helped to offset this impact, with revenues broadly flat versus the first five months of 2022.

“However, principally due to the lower sales volumes, operating profit margin has remained at a similar level to the second half of 2022.

“In Life Sciences, Crop Protection started the year well, but the business is now experiencing rapid customer destocking, which was a factor originally expected to materialise more gradually later in the year.

“Life Sciences’ operating profit margin is being negatively impacted by adverse mix in the year to date including lower sales for Covid-19 applications in the Pharma business.

“Shipments of lipid systems to our principal Covid vaccine customers are expected to occur as planned in the second half of 2023.

“As a result of these factors, the group generated £143m profit before tax in the first five months of the year, supported by minimal net finance costs.

“With customer destocking in consumer and industrial end-markets now expected to continue into the second half year and momentum moderating in crop protection, full year 2023 group profit before tax is now expected to be between £370m and £400m.”