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(Sharecast News) - Rotork reported an uptick in first-half operating profit and flat revenue on Tuesday as growth in Chemical, Process & Industrial (CPI) and Water & Power helped offset the impact of the Middle East conflict and ongoing customer capex discipline in the oil & gas segment.
For the six months to 30 June, the manufacturer of industrial flow control equipment reported a 1.7% increase in adjusted operating profit to 82.2m, with revenue steady at 367.2m. Order intake edged down 4.9% to 371.8m.
Within the divisions, CPI delivered the strongest performance, with revenue up 12.6% at 114.2m and adjusted operating profit 19.2% higher at 28.3m. This was driven by continued momentum in speciality chemicals, marine and critical HVAC (heating, ventilation & air conditioning) - including data centres - together with a good contribution from core markets.
In the Water & Power business, revenue rose 3.1% to 99.3m and adjusted operating profit increased 14.1% to 27.9m. Rotork said the division continued to benefit from robust demand across water infrastructure and treatment markets, while power revenues were lower, reflecting a high prior year comparative and the expected phasing of projects within the year.
Oil & Gas revenue fell 9.3% to 153.7m, while adjusted operating profit was 15.2% lower at 37.1m. Rotork pointed to ongoing customer capex discipline and the impact of the Middle East conflict on customer activity and supply chains.
This resulted in lower revenues in upstream and midstream markets, although downstream performance remained resilient, supported by the higher Service exposure, it said.
Chief executive Kiet Huynh said: "Rotork delivered a robust first half performance, demonstrating the strength of our portfolio and the continued benefits of the Growth+ strategy.
"Looking ahead, we continue to expect further progress on an OCC basis for the group in 2026. Our expectations for Water & Power remain unchanged, with strong order momentum expected to underpin performance in H2. While recovery in Oil & Gas is now expected to be more gradual, with full year divisional revenue expected to be slightly lower year-on-year, we now anticipate stronger growth in CPI.
"We remain focused on attractive end markets supported by structural tailwinds including automation, electrification and digitalisation. Combined with the benefits of our Growth+ strategy, this gives us confidence in our ability to deliver mid to high single-digit revenue growth and adjusted operating profit margins in the mid-twenties over time."
Rotork announced last month that it had agreed to be bought by Swiss engineering firm ABB in a 4.1bn deal.
At 1048 BST, the shares were down 0.2% at 486.20p.
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