Lonza posts fall in first-half profits

Lonza posts fall in first-half profits

5:18 PM, 27th July 2011
Lonza posts fall in first-half profits
Stefan Borgas, CEO, Lonza.

BASEL, SWITZERLAND: Lonza delivered a solid business performance in the first half of 2011 with increased EBIT and revenue at constant exchange rate. Due to strong negative exchange rate, the revenue and EBIT was impacted, Lonza informed.

  • Sales of CHF 1193 million up by 4.8 per cent at constant exchange rate (-8.3 per cent in reporting currency)
  • EBIT increased by 4.6 per cent at constant exchange rate to CHF 136 million (-21.4 per cent)
  • Currency impact of CHF -44 million on EBIT
  • Countermeasures to offset strong Swiss franc launched at the Swiss sites
  • Strong performance in Biological Custom Manufacturing and Development Services
  • Further development of life-science-driven strategy results in acquisition offer for Arch, building a global leadership position in Microbial Control and balancing Lonza’s portfolio and currencies

Lonza delivered a solid business performance in the first half of 2011 with increased EBIT and revenue at constant exchange rates demonstrating a solid product pipeline combined with high capacity utilization in custom manufacturing and life science ingredients. However, reported revenue and EBIT were substantially impacted by the strong Swiss franc. The currency impact on operating profits (EBIT) was CHF -44 million. In the short term, the impact of the strong Swiss franc is being mitigated in Visp and Basel by instituting longer working hours in cooperation with social partners, and mid- to long-term productivity improvements and portfolio upgrades are being introduced. Increases in raw material prices persisted and the unpredictability of regulatory authority approvals remained a challenge.

“These results demonstrate the strength of our underlying business. Despite the heavy hit we have taken in our reported numbers as a result of the strong Swiss franc, I am pleased that the company has delivered 5 per cent growth in underlying revenues and operating profits. Looking forward, our pipeline looks promising, our capacity utilization is improving and our growth projects are moving forward. I am particularly excited by the opportunities that our newly focused strategy will allow us to capitalize on, not least the offer for Arch which is proceeding to plan and we expect to complete later this year,” said Stefan Borgas, CEO of Lonza.

© WOC News

 

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