11 July 2003 12:58 [Source: ICIS news]LONDON (CNI)--Ems-Chemie said Friday it expects sluggish economic development in the second half of 2003 following a stable H1, and highlighted the anticipated impact of a volatile currency effects on full year results.
The Swiss specialty chemicals and engineering group reiterated that operating profit and sales would be flat in 2003. In 2002, operating profits were Euro195m (about $144m/Euro133m) on sales of SF1.22bn.
In H1, Group earnings before interest, tax, depreciation and amortisation (EBITDA) were flat at SF132m. Ems-Chemie’s operating profits grew 1% to SF99m ($73.4m/Euro64.0m), as strict cost-cutting in all business units offset the negative impact of a strong Swiss franc. Sales fell 1.1% (up 2.9% in local currencies) to SF613m despite the higher volumes.
Ems-Chemie said group sales in Europe and Asia developed according to plan but the US turnover was below expectations due to a strong Swiss franc.
The performance polymers division boosted operating profits by 4.3% to SF73m on sales up 2.8% at SF471m. The metals substitution business sold additional volumes, particularly in Europe. Ems-Griltech made further progress in the technical adhesives market while Ems-Togo did well in the growing Chinese automobile market.
Operating profits in the fine chemicals division fell 5.3% to SF18m on sales down 9.8% at SF92m. Investment in the Ems-Primid PMC hardener business was particularly sluggish in the US and Europe. Ems-Dottikon was held back by excess capacity in the market for pharmaceuticals exclusive synthesis and therefore failed to meet its improvement targets.
The engineering division suffered a 11.1% fall to SF8m in operating income on revenues down 16.7% at SF50m, due mainly to the divestment of the Power Station unit. Air-bag igniters provider Ems-Patvag continued to boost income and sales, albeit at a slower rate, despite a general decline in the automobile market. Plant manufacturer Inventa-Fischer’s investment activities in the Chinese market recovered, generating a significant increase in orders received.
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