Despite strong sales across all but one of its five business divisions, including Textile, Leather and Paper Chemicals, the Swiss chemicals producer Clariant still only managed to return net profits of SFr2m ($1.5m) in the first quarter of the current financial year, well short of the SFr51 million predicted by analysts.

A major factor was a $38 million provision incurred by delays in opening a new bleach activator plant in the US, by the group's FUN (Functional Chemicals) division.  Without this, net profits would have come in at SFr40 million, as opposed to SFr 88 million the year before.  Negative currency effects also took their toll, reducing sales in Swiss francs by 8% to SFr2.1 billion, though on a currency-adjusted basis a 4% sales increase was seen.

Earnings before interest and taxes declined 31% on a currency-adjusted basis to SFr113 million.  This compares with SFr180 the year before.  Sales meanwhile declined 7.6% to SFr 2.106 billion as the weak performance of the group’s Life Science & Electronic Chemicals (LSE) division outweighed the advances made the remaining four.  At SFr51 million, sales by the Clariant’s Textile Leather & Paper Chemicals division were up 6% on a local currency basis, while those of its Pigments & Additives division were up 8% to SFr449 million.  Sales by the group’s Masterbatches division climbed 9% to SFr264 million while those of the FUN division rose 7% to SFr508 million.  Sales by the Life Science & Electronic Chemicals division fell 10% to SFr358 million. 

Within Textiles Leather & Paper Chemicals, strong leather sector sales were offset by weaker prices in  wet end chemicals. Asian business was reported as being unsettled late in the quarter by SARS developments which Clariant warned are likely to impact on the next quarter.

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