Clariant's 2007 op income drops 28% to Swfr278m

14 February 2008 10:29  [Source: ICIS news]

LONDON (ICIS news)--Clariant’s operating income for 2007 dropped 28% year on year to Swiss francs (Swfr) 278m ($251m/€172m) due to unfavourable currency effects and restructuring costs, the Swiss specialty chemical company said on Thursday.

 

Operating income for the fourth quarter had a marked decrease to Swfr7m from Swfr112m on the same period in 2006, the company reported.

 

Full-year 2007 sales were up 6.6% to Swfr8.6bn year on year while sales for the fourth quarter were up 3.8% to Swfr2.1bn.

 

“In 2007 Clariant was able to raise its prices by more than 1% with an increasing momentum towards year-end,” the company said, but added: “Higher selling prices were not sufficient to offset a 5% rise in raw costs."

 

Clariant said the company’s sales grew 9% in local currencies in Asia - the highest of any market.

 

“China remained the strongest growth contributor in Asia, while growth in India was affected by a slowdown in the export-driven industries,” it said.

 

The cost of the company’s plans to restructure the company has impacted operating profits.

 

“Restructure efforts progressed in line with Clariant’s 2010 goals, with restructuring costs reaching Swfr262m in 2007,” the company said.

 

“Nine smaller sites have been closed and three larger ones have been announced for closure. Approximately 800 jobs have been reduced and a further 600 have been announced,” it added.

 

The weak US dollar also adversely impacted Clariant’s profitability by Swfr539m.

 

Clariant said it planned to continue price increases to offset further increases in raw material and energy costs.

 

“Clariant expects an improved operating margin before exceptional items and continuing strong cashflow from operations in 2008,” it added.

 

Clariant’s share price had risen 10.46% to Swfr9.25 on the Swiss Exchange after results beat analysts' consensus forecast.

 

These forecast put Clariant net income at a loss of Swfr11m but the companies net income was actually Swfr5m.

 

The company said this was due to lower taxes and improved financial results.

 

($1 = Swfr1.10/€1 = Swfr1.61)

By: Lucy Craymer
+44 20 8652 3214

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