Solvay posts record results for sold-off pharma division

19th February 2010, Comments 0 comments

Belgian chemicals and plastics group Solvay reported record annual results on Thursday for the pharmaceuticals division it is selling to US group Abbott, the only division to show growth.

BRUSSELS - A better-than-expected performance saw 2009 net income hit 516 million euros (700 million dollars), a 27 percent increase, with fourth-quarter earnings coming to 188 million euros, compared to just 29 million euros one year earlier.

Solvay stressed that the 2008 results were brought down by a 309-million-euro write-down of holdings in the broken-up Fortis bank.

Pharmaceuticals, which was listed as "discontinued operations," posted "record" earnings of 649 million euros, up 27 percent, whereas overall group earnings slid by six percent to 905 million euros.

The drugs sector was also the only part of the business to see sales increase, by three percent to 2.791 billion euros. Chemicals fell by 12 percent and plastics by 19 percent.

Total group sales for 2009 fell by 11 percent to 8.485 billion euros.

European regulators last week greenlighted Solvay's plans to sell its entire pharmaceutical business to US drugs group Abbott for more than 4.5 billion euros.

Solvay said in its report that "the sale transaction closed on February 15."

The company said it will re-invest the proceeds in "high value-added activities and strategic projects in chemicals and plastics," but noted that "evaluations about such reinvestments are ongoing."

A round of consolidation has taken place throughout the pharmaceutical industry since Pfizer, already the world's biggest pharmaceutical firm, announced a 68-billion-dollar takover of Wyeth in January.

That was followed by US giants Merck agreeing to buy rival Schering-Plough for 41.1 billion dollars in March.


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