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Sensient rides down-turn thanks to pricing and currency

By Clarisse Douaud and Simon Pitman , 21-Apr-2008

Sensient Technologies Corporation reported in its financial results for the first quarter of 2008 that profits have been further boosted by pricing and currency conditions.

The supplier of colors and fragrances to the personal care industry reported "record" revenues of $307.4m, which it said were up 7.8 percent from Q1 2007. A weak US dollar favored some businesses, particularly those exporting to Europe where the currency exchange has been particularly favorable to US exporters. The exchange rate had a positive impact on Sensient's results with the Wisconsin-based ingredients company reporting that its operating income rose by 15.8 percent. Favorable pricing and product growth "For the first quarter, we reported record revenue and our ninth consecutive quarter of strong earnings growth," said Kenneth Manning, Sensient chairman and CEO. "We see favorable pricing and growth in several key product lines, and we expect our strong performance to continue throughout the year." Meanwhile, cash provided by operating activities in the three months ended March 31, rose to $9.7mn, compared to $5.1mn in the same period in 2007. Sensient is a leading global supplier of flavors, fragrances and colors for to a host of other industries, including the food and beverage and pharmaceutical sectors. The flavors and fragrance division, which supplies fragrances and specialty ingredients to the person care sector, reported that revenue for the first quarter increased 8.1 percent to $195.2mn, compared to $180.5mn in the same period of the previous year. Flavors and fragrances boosted by exchange rate The divisions's operating income was also up 13.2 percent to $28.8 million, compared to $25.4 million for the first quarter of 2007. The firm indicated revenue for this group was bolstered by favorable foreign currency translation as well as pricing. It said the group's European operations were particularly profitable over the quarter. Sensient's color division, which makes approximately 20 per cent of its sales to the personal care industry also reported improved revenue on the basis of favorable foreign currency translation and improved pricing. The color group's revenue increased 6.8 percent in the first quarter over the same quarter in the previous year, reaching $102.8mn. Quarterly operating income for the division rose 8.1 percent over the same period.

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