SPECIALITY chemicals group Elementis, which has a site at Eaglescliffe, on Teesside, saw its first-half profits cut after being hit by high energy costs and tough market conditions.

The London group, which makes pigments and products for use in printer toners, mascara and roof tiles, generates two-thirds of its sales in the US.

It was sent reeling by the soft economy on the other side of the Atlantic, and the US energy crisis.

Pre-tax profits slumped to £15.1m in the six months to June 30, compared with £29.5m last year, before one-off costs. Sales edged up three per cent, to £296.7m, but only because of the strength of the US dollar.

Jonathan Fry, group chairman, said: "The half-year results reflect the tough global economic climate emanating from the US. As previously indicated, these conditions, combined with substantially higher energy costs, have resulted in a sharp fall in operating profit."