Clariant boosts profit

The specialty chemicals company, Clariant, has reported that it boosted net profit in 2004 to SFr150 million ($127.7 million) from SFr97 million in 2003.

But the company, which is based near Basel, reported a fourth-quarter loss of SFr20 million because it had restructuring costs and did not repeat asset sales that helped results the previous year.

Sales rose by six per cent in Swiss francs to SFr8.53 billion, while operating income increased from SFr499 million in 2003 to SFr530 million last year.

The net profit figure at Clariant, which makes pigments for everything from textiles to cars, fell short of analysts’ expectations. In a Reuters poll, they had forecast an average SFr188.4 million.

The previous year’s profit figure was adjusted to account for the sale of several units in 2003, Clariant said in a statement on Tuesday.

Upbeat

CEO Roland Lösser was upbeat about the company’s performance but issued a caution.

“These results clearly show Clariant is back and competing with the best in the industry. There is still a lot of work to be done, but we can be proud of the achievements of the past,” he commented.

The company said last year that it would cut up to 4,000 jobs or 15 per cent of its staff within two years as it tried to restore its capital strength, after the acquisition of British fine chemical maker BTP in 2000 left it with huge debts.

In the statement, Clariant said it had closed the year in “excellent financial health”. It had sharply reduced net debt levels in 2004 to SFr1.090 billion from SFr2.905 billion a year earlier, a reduction of 63 per cent.

After job cuts and the sale of several non-core businesses in 2004, the number of staff at the end of 2004 stood at 24,769, down from 27,008 at the end of 2003.

Restructuring

“What is particularly encouraging is the fact that we are continuing to grow on the top line quarter by quarter, while carrying out deep and wide-ranging structural improvements that will ensure our competitiveness over the long-term,” Lösser said.

In its outlook, Clariant said it was “positive”, expecting solid growth in sales in local currency terms and an improved operating margin before exceptional items.

“I expect a positive macro economic climate for the specialty chemicals industry, and that Clariant will continue to grow above the market,” Loesser said.

Raw material prices are expected to increase one average by five to seven per cent over the coming year but the company comments that thanks to further improvements from the restructuring programme, it expects net income to rise in 2005.

Profit at cross-town rival Ciba Specialty Chemicals fell last year to SFr311 million from SFr344 million in 2003.

swissinfo with agencies

Key facts

Clariant is a global leader in the field of fine and specialty chemicals.
It produces dyes, pigments, functional chemicals, additives and masterbatches for the textile, paper, leather, plastics, synthetic fibres and paint industries.
The company has a strong heritage going back to the 1850s, with roots in both Sandoz and Hoechst Specialty Chemicals.
It employs 24,769 people in more than 100 group companies on five continents.