Operating profit fell 29 per cent to CHF110 million, while revenues dipped 3 per cent to CHF 1.99 billion, because of the sale of some product lines and lower volumes. First quarter net profit came in at CHF 72 million, up from CHF 61 million a year earlier. Restructuring charges were CHF 29 million, lower than expected, while Clariant also benefited from a halving in its debt to CHF 1.39bn.
Clariant said it was able to raise prices for its products an average of 1 per cent across the group, but this only partially offset higher raw material prices.
However, the company's pharmaceutical activities, part of its life science chemicals division, were a drain on the group, hit by significant volume losses. Overall, the division reported a 13 per cent decline in sales to CHF 219m, but Clariant did suggest that it was seeing signs of an uptick in the pharma business.
The company expects raw material prices to increase 5 to 7 per cent this year, but predicted that "this negative effect will be more than offset by organic sales growth, further price increases and the positive effect of performance improvements initiated over the past 18 months."
Clarint is aiming to reduce its cost base by approximately CHF 300m this yearcompared to 2004 via its ongoing restructuring efforts, dubbed the Transformation Programme. It expects net income to rise in 2005.
- Meanwhile, Clariant has said it will shift a major share of its intermediates production for the agrochemical and pharmaceutical markets from Europe to India. The move follows the completion of a $1.8m plant in Roha, India, by its Colour-Chem subsidiary.