Germany’s Merck Group Q1 net profit falls 49% to €174m

15 May 2012 08:38  [Source: ICIS news]

SINGAPORE (ICIS)--Merck Group’s first-quarter net profit fell by 49% year on year to €174m ($223m) in the absence of divestment gains, the German-based producer said on Tuesday.

The company’s operating profit fell to €311m from €530m in the first quarter last year, mainly because of lower operational performance and a one-time capital gain of €157m booked in the first quarter of 2011 from the divestment of its crop bioscience business, Merck said.

Total revenues for the group increased 3.2% year on year to €2.64bn in first quarter. Merck said this performance reflected organic sales growth of 1.2%, a 1.7% positive benefit from changes in foreign exchange rates and a 0.6% boost from acquisitions and divestments.

The group’s organic sales growth was entirely driven by the Merck Serono and Merck Millipore divisions during the quarter, it added.

“Merck delivered a reasonable operating performance in the face of a difficult year-over-year comparison,” said Karl-Ludwig Kley, chairman of the executive board of Merck.

“Our focus during 2012 will be to deliver a solid operational performance while bringing our cost structure more in line with our competitors and peers,” he added.

The company’s performance materials division faced a difficult year-over-year comparison in the first quarter of 2012 after generating a 15% organic sales growth rate in the year-ago quarter due to unusually high customer demand for its liquid crystal materials, Merck said. First-quarter 2012 sales of the division declined 5.3% year on year to €386m.

The Merck Millipore life science division’s first-quarter 2012 sales rose 7.3% year on year to €653m, driven by solid results from its lab solutions and process solutions business units.

Pharmaceutical division Merck Serono’s first-quarter sales increased 5.4% to €1.42bn year on year, while the group’s consumer health division reported sales of €108m, a 7.4% decline compared to € 116m in the first quarter of 2011.

Looking at the year as a whole, Merck expects total revenues of around €10.5bn and earnings before interest, tax, depreciation and amortisation (EBITDA) before one-time items of €2.8bn-2.9bn.

($1 = €0.78)

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