Clariant shows strong first half performance
Swiss chemicals producer Clariant International has presented first half figures for 2004 which show a strong performance, re-establishing a solid financial base for the company.
Sales increased by 7% in Swiss franc terms to 4.4129 billion ($3.5 billion). Net income rose sharply to reach CHF 129 million, compared to a loss of CHF 74 million last year.
The company has been particularly successful in cutting net debt, which was slashed by half to CHF1.840 billion from CHF 3.686 billion a year ago, and this is set to improve further in the second half.
“Our growth rate and operating results give us a lot to be proud of,” said Roland Loesser, Chief Executive of Clariant. “The company is now back on a strong financial footing thanks to hard work and the support of our shareholders. The transformation Program we initiated a year ago is beginning to bear fruit, particularly in the areas of cost reduction and cash flow.”
The higher oil prices did not affect Clariant’s raw material costs to any noticeable extent in the second quarter. Mr Loesser noted that the company‘s performance felt less of an impact from movements on the petroleum market, due to the sale of several business units which depended heavily on petroleum derivatives.
Clariant’s Transformation Programme, aimed at cutting costs, and refocusing on core activities was successful in the first half of the year. Net working capital was reduced by in excess of CHF 200 million, from a target of CHF 600 million by 2007. This was achieved whilst achieving an increase in sales during the same period.
Clariant, last month, announced the sale of AZ Electronic Materials to The Carlyle Group for CHF 518 million, and Lancaster Synthesis for CHF 32 million to Johnson Mathey. These sales are expected to be finalised in the near future and this will further reduce the company’s debt and fund the Transformation Programme.
Clariant intends to sell additional assets that are no longer integral to the company’s core activities. “Our priority in these sales processes is to achieve the best possible prices. Given our stronger financial position, we can take as much time as required to obtain positive results,” Mr. Loesser said.
Mr Loesser is optimistic about Clariant’s performance for the remainder of the fiscal year, but stressed effect of seasonal factors on the industry, which invariably create a weaker second half to the year.
