Chemicals manufacturer Royal DSM 2Q profits fall on impairment charge
DSM said that without the charge, profit would have risen 4 percent.
26 July 2007
AMSTERDAM (AP)- Dutch chemicals maker Royal DSM NV said Thursday that profits fell sharply in the second quarter despite improvements in its core businesses, as it took an impairment charge of EUR 150 million on its pharmaceutical chemicals business.
Net profit came to EUR 45 million, down from EUR 155 million. DSM said that without the charge, profit would have risen 4 percent.
Sales rose 3.3 percent to EUR 2.20 billion, the company said, due to both higher volumes and higher selling prices, undermined somewhat by the drop in the dollar.
DSM said that after a major review of the "anti-infectives" business it had concluded its best option was a "partnering strategy, possibly with partial divestments, for the business, combined with further restructuring measures to improve profitability." This new outlook for the arm was the cause of the EUR150 million write-down, DSM said.
The unit was actually among DSM's best performers on an operational basis, with profits doubling to EUR 30 million due to surging global prices of penicillin.
Its industrial chemicals arm increased operating profit by 25 percent to EUR 66 million as selling prices rose while raw material costs remained stable, improving margins.
DSM's nutritional chemicals businesses saw a 25 percent drop in operating profit to EUR 65 million due in part to increased research and development costs, the company said.
[Copyright AP 2007]
Subject: Dutch news