International chemical and pharmaceutical Group Solvay announced on 29 April 2004 that its 1Q 2004 sales were EUR 1,877 million, down 2% year-on-year from EUR 1,906 million in 1Q 2003. At constant exc…
International chemical and pharmaceutical Group Solvay announced on 29 April 2004 that its 1Q 2004 sales were EUR 1,877 million, down 2% year-on-year from EUR 1,906 million in 1Q 2003. At constant exchange rates, sales would have increased by 2%. Group net income was EUR 117 million, up 20% from the 1Q of 2003 (EUR 98 million). Solvay attributed this improvement, despite the persistence of a strong euro and a difficult economic situation in the first three months of 2004, mainly to a Pharmaceuticals Sector deal with Wyeth. The lack of visible growth in Europe hit the Chemicals Sector results again, although the economic background for the sector is improving, the Group said. A series of restructuring and cost-reduction measures are being pursued. Results from the Plastics Sector “improved greatly over the last few months, due to the upturn in the demand for specialty polymers and vinyls.” During the 1Q 2004, results from Group activities “improved progressively”, Solvay said. For all of 2004, the improving economic situation and the contribution of the Pharmaceuticals and Specialties products, as well as significant efforts to increase competitiveness, “should enable the Solvay Group to cope with the pressure”. Non-recurring items were + EUR 2 million, mainly due to the sale of Hedwin in the US in the area of industrial films. Charges on net indebtedness were EUR 23 million, up 10% year-on-year, following the extension of long-term debt coverage. Taxes were EUR 59 million, at an average rate of 33%. Net income of the Group was EUR 117 million, up 20% year-on-year (EUR 98 million in 1Q 2003). Minority interest was EUR 8 million, of which EUR 6 million represented the preferential dividends linked to EUR 800 million financing for the acquisition of Ausimont. Net earnings per share were up 22% at EUR 1.31. Depreciation and amortization remained stable compared to the 1Q of 2003. Cash flow in the 1Q of 2004 was EUR 222 million, up 8%. As of 31 March 2004, the Group“s net indebtedness was EUR 1,342 million, up EUR 222 million, due mainly to the seasonal increase in working capital. The net debt to equity ratio at the end of the 1Q in 2004 was 36%. In the Chemicals Sector, Solvay said the first months of 2004 were marked by a significant fall in caustic soda prices, a strengthening of the euro, which hit export margins, as well as increased competitive pressure in numerous markets. Results from the Chemicals sector in the 1Q of 2004 were 40% down on the “buoyant” 1Q in 2003, although “trends are improving”. In soda ash, “the better balance between supply and demand” in the American market made a price increase possible while the European market remained depressed.