Overall sales in the ingredients business fell 4 per cent on the comparable period to DKK 836 million (€112m) while operating profit was down to DKK 106 million, a decline of 16 per cent on the 2003 first quarter.
Satisfactory sales growth in North America - 7 per cent in local currency terms - fell by 12 per cent because of the dollar exchange rate and in other markets organic growth was small - 3 per cent in Europe and Asia while South America, an emerging market for the ingredients suppliers, fell well below expectations, dropping 7 per cent from DKK 58 million to DKK 54 million.
Disappointing results from Japan and Korea although overall sales for Asia/Pacific/Middle East rose by 5 per cent from DKK 74 million to DKK 78 million, based on a 3 per cent organic growth.
With revenue down 3 per cent to DKK 1.15bn at the group overall - food ingredients and ALK-Abelló Allergy Vaccines combined - operating profit has taken a 14 per cent dive in the quarter, and this trend is expected to increase over the coming year. The group has reduced expectations by 17 per cent with group profit estimated at DKK 115-145 million, compared to DKK 140-170 million predicted in the end of year results in 2003, and against DKK 139 million for 2002/03.
Chr Hansen markets a broad range of ingredients to the pharmaceutical industry, including lactose, bulking agents, polymers and pigments and colours. The company recently opened a new US plant based in Stoughton, Wisconsin, for the production of excipients for drug companies. Validation and running-in costs for this plant amounted DKK 6 million in the quarter, and it is now ready to take over production from Chr Hansen's old plant, based in Vineland, New Jersey, which was sold off in October 2003.