ICI, the chemicals maker, said first-quarter profit dropped 51 per cent as falling prices pushed the bulk-chemicals unit it is looking to shed into a loss. ICI, which has put its industrial-chemicals and acrylics businesses up for sale to focus on more profitable products such as additives for food and drugs, said net income fell to pounds 41m from pounds 84m a year earlier.

Falling prices and lower Asian demand hit profit at ICI even as the company worked to cut costs and shed bulk-chemicals divisions. ICI's profit decline was made worse because the specialty-chemicals and paint units it is counting on to power profit growth also failed to post higher earnings.

"Their strategic move didn't pay off in the first quarter," said Tim Franklin, an analyst at Williams de Broe. "The company says things picked up in March, though, and I see some reason to be confident that those core businesses will do better in months to come."

The company's shares fell 3.67 per cent, to 649.5p. Its industrial-chemicals unit fell to a quarterly operating loss from a profit a year earlier.

Operating profit in its materials division fell 27 per cent, while in the paints unit, profit was unchanged.

ICI said its net debt rose 7 per cent in the quarter to pounds 4.5bn, almost equalling the company's market capitalisation of pounds 4.9bn. The scale of ICI's debts is a key concern for investors, which the company is seeking to address by selling assets.

ICI shares have fallen 47 per cent since hitting a record 1,244p on 15 May. "Unquestionably, the share price was overblown at its high at that time," departing chairman, Sir Ronald Hampel, told shareholders on Thursday.

"Equally, I believe at its low it took too pessimistic a view of the company's future. The company strategy has not changed. If it was brilliant in May it most certainly was not stupid in October."