Swiss fine chemical company, Lonza, this week reported an increase in 2001 group sales to CHF1,868 (€1,276m), up 9.7 per cent from the previous year.
The group stressed in a statement that despite a difficult global economic environment, particularly in the US, operating income from continuing operations increased to CHF 357 million, 9.2 per cent higher than 2000. Together with discontinuing operations, which generated earnings of CHF 89 million (6 per cent higher than 2000), Lonza Group's operating income rose to CHF 446 million, yielding a margin of 17.0 per cent (16.7% in 2000).
Major contributors to the improvement in performance were the life sciences-oriented activities, especially in the Exclusive Synthesis and Biotechnology businesses where both sales and operating income showed significant advances. These developments more than offset thenegative impact of the economic slowdown that mostly affected the Performance Chemicals business, which is predominantly US-based.
The company reported that demand for organic fine chemicals for the production of vitamins, pharmaceuticals, as well as for some specific agrochemicals and dyestuffs remained strong throughout most of the year.
As a consequence of the two share repurchase programs, the first of which ended in January 2001, and the second started in August 2001, and the cash inflow from the divestiture of the companies energy assets in December 2001, Group net debt amounted to CHF 514 million compared with CHF 237 million at the end of 2000. Higher gearing throughout the year resulted in net financial expenses of CHF 29 million compared with CHF 3 million in the prior year.
Lonza remained upbeat for 2002 and stated that, notwithstanding a possible further softening of the global economy and thanks to strong positions in fine chemicals and biotechnology, the company will be able to improve on its 2001 operating performance.