R-P '98 net profit up 23% to FF4.2bn

28 January 1999 12:41  [Source: ICIS news]

LONDON (CNI)--French chemicals and life sciences group Rhone-Poulenc (R-P) announced Thursday that strong growth in pharmaceuticals and agrochemicals in 1998 pushed net income before non-recurring items up 23.2% to FF4.21bn ($743m/Euro642m) despite weakening chemicals markets, which brought sales revenues down 3.5% to FF86.8bn.

Allowing for one-time costs, R-P saw a dramatic turnaround to report net income of FF4.22bn from a loss of nearly FF5bn in 1997. The non-recurring costs included the gain from listing the chemicals arm Rhodia, restructuring charges in the pharmaceuticals sector and Rhodia, temporary shutdown of the Centeon joint venture plant, and the divestment of some polyester businesses.

Pre-tax income for last year, on a non-recurring basis, increased 7.3% from FF6.95bn to FF7.45bn. Including one-time costs, the group’s pre-tax result moved to FF7.46bn from a loss of FF2.79bn in 1997.

Jean-Rene Fourtou, chairman and chief executive, welcomed the results and said "we have a strong foundation, which will ensure the success of Aventis", the new 50:50 life sciences merger with Germany's Hoechst.

Results for the fourth quarter of 1998 saw net income, excluding non-recurring items, up 7.1% to FF814m on sales down 5.8% to FF21.66bn. Including one time costs, the net income improved from a loss of FF7.65bn to a deficit of FF423m.

In the final quarter, before one-time costs, R-P suffered a 1.6% fall in pre-tax income toFF1.51bn. Allowing for non-recurring costs, the pre-tax result for Q4 dramatically improved, from a loss of FF8.20bn to a deficit of FF181m.

Life sciences, which is the focus of R-P's future plans with Hoechst, saw consolidated net sales up 6.2% to FF51.47bn, excluding the impact of exchange rates. Rhodia saw its net sales fall 2.4% to FF36.32bn from FF37.41bn after a slowdown in sales in the second half of the year.

The pharmaceuticals businesses reported a total increase in net sales of 7.2% to FF34.48bn. R-P said this was due to increased sales of strategic products, which improved their share of net sales revenues to 25% from 19%. Fourtou said the earnings in 1998 were driven by new products, such as anti-cancer agent Taxotere (docetaxel) which saw a jump of nearly 51% in sales revenues to FF2.24bn excluding exchange rate effects, and the anti-thrombotic treatment Clexane/Lovenox (enoxaparin sodium) which had sales more than 33% higher at FF3.62bn.

The oncology product sales revenues, including those from Taxotere, rose by 42.4% to FF3.40bn, excluding currency effects. Total sales of vaccine products were up 10.5% to FF4.88bn, the star performer being the injectable polio vaccine which reported nearly 60% higher revenues at FF406m. However, revenues for respiratory and allergy products were down 8.3% to FF5.07bn.

R-P said that most countries experienced sales growth in the pharmaceuticals sector, especially the US market which was up 15%. Sales in Europe were up 5.8% but fell in France by 2.1% mostly due to government measures concerning the industry and reduced activity linked to the hepatitis B vaccine, which saw revenues down 5.3% for the year. Overall, the pharmaceuticals businesses' sales volumes increased by 6.5% and their aggregate prices were up 0.7%.

Net sales revenues for plant and animal health activities increased by 4% to FF17.23bn, excluding currency effects. Sales volumes were up 4.6% for the year but aggregate prices dipped 0.6%. Improved performances came mainly from Europe and South America. Poor climatic conditions in the US restrained growth.

The key growth area was agro-business, which reported revenues up nearly 6% with the aid of new products, such as the insecticide Regent (fipronil) which saw sales up two thirds to FF799m including a 13.3% increase in Asia. Sales revenues from the herbicide Balance (isoxaflutole) were FF412m in its first year in major markets.

Animal health sales revenues saw a strong contribution from R-P's Merial joint venture with Merck, and sales of the external anti-parasitic Frontline, which rose 62% to FF1.77bn, excluding currency effects. R-P said the launch of the anti-parasitic Eprinex (ivermectine) on the cattle market helped Merial to stabilise its position in this area.

No information was immediately available on how R-P plans to take restructuring charges in the Aventis merger.

By: Patrick Reynolds
+44 208 652 3214

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly