Dutch DSM posts Q2 slump after fire
Dutch chemicals and pharmaceutical group DSM posted a 30-percent profit drop in the second quarter, hit by unfavourable exchange rates and a fire which caused millions of euros' worth of damage.
Net profit after exceptional items stood at 77 million ($103 million), while turnover fell from 2.4 billion euros to 2.2 billion on a 12-month comparison, it said in a statement.
A fire in June caused damage costing about 16 million euros at a production plant in northern Switzerland, interrupting production of animal health and nutrition products, DSM said.
Unfavourable exchange rates added another 29 million euros in losses.
Despite the setbacks, DSM said its performance improved compared to the outcome in the first quarter of 2014, with chief executive Feike Sijbesma saying the company continued to "focus on efficiencies to protect profitability and improve cash flow in the current environment."
Sales showed small signs of improvement including in the human nutrition and health sector, with DSM aiming to boost the promotion of dietary supplements for vitamins and fish-oil based Omega-3 products in the United States.
It added that recent changes in regulatory policy in China, the world's second-biggest economy, had created additional uncertainty for infant milk formula producers including DSM.
Last year, Chinese authorities fined some foreign baby milk producers and launched a campaign against bribery in the pharmaceutical industry which mainly targeted overseas firms.
"As a result infant nutrition suppliers have reduced their inventories," DSM said.
Based in Heerlen in southern Netherlands, DSM employs 22,000 people globally and makes products such as nutritional supplements, pharmaceuticals and paints.
© 2014 AFP