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Britain's ICI profit falls,

LONDON: Chemicals giant Imperial Chemicals Industries Plc (ICI) reported lower first quarter profits on Thursday and warned results would fall more as chemicals prices are only now recovering from a recent slump.

Pre-tax profit before exceptional items fell to 202 million pounds ($305 million) from 221 million a year ago when prices in the industry roared to their peaks only to drop later.

ICI will continue to feel the consequences in the second quarter when profits are expected to be lower than in the same 1995 period. But the company added that it was optimistic volume growth would resume in the second half of the year.

The first quarter results came in at the lower end of analysts' expectations of between 193 and 215 million pounds, and shares in ICI fell 28 pence to 928 in pre-market trading.

"We achieved a solid result in the first quarter in tough trading conditions in many of our markets," ICI chairman Ronald Hampel said in a statement.

The firm has embarked on a cost-cutting programme and Hampel said ICI would continue to drive down its cost base in order to meet a target of 400 million pounds in profit improvement by the end of 1997. In this environment we will continue the drive for an increase in productivity through further initiatives in restructuring," he said.

In the group's paints arm, decorative sales in Britian were up nine percent, but the U.S. market was hit by poor weather.

Demand and profits were also down in continental Europe and Australia, while Asian markets performed well.

In the group's explosives arm, a fall in profit in the United States overshadowed increased profits in Canada and Asia.

"The fall in profit ocurred mostly in the United States and urgent steps are in hand to address the overall deterioration in the quality of this business," ICI said.-Reuter