Solvay reports quarterly profit rise amid restructuring

30th October 2009, Comments 0 comments

Belgian chemical and pharmaceutical group Solvay reported on better-than-expected third-quarter profits marked by a big sales rise for the pharmaceuticals division it has decided to sell.

BRUSSELS - Net profit for period from July to September was 160 million euros (240 million dollars). Analysts polled by Dow Jones Newswires had forecast 108 million euros.

It represented a steep rise compared to the 41 million euros posted for the corresponding period in 2008, although those results included a significant write-down related to its holding in the broken-up Belgian bank and insurance group Fortis.

Operating profits for the period slipped by 2.0 percent to 285 million euros with sales down 10 percent to 2.235 billion euros.

In both cases, the results comfortably beat expectations pegged respectively at 33 percent and 14 percent.

Solvay said at the end of September it is to sell its entire pharmaceutical business to US drugs group Abbott for more than 4.5 billion euros to focus on chemicals.

The deal, which could rise to 5.2 billion euros if add-on clauses are met, will see Abbott take over all Solvay's pharmaceuticals employees and assume liabilities including future exposure to litigation.

The company said it would invest the proceeds in its original chemicals and plastics business, focusing on geographical expansion and attention to new products with a "low carbon footprint."

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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