Novartis figures better than forecast

The life sciences giant, Novartis, has published much better than expected yearly results. Net profit for 1999 rose to SFr 6.659 billion, an 11 per cent increase on the previous year. Most analysts had forecast an increase of around four per cent.

The life sciences giant, Novartis, has published much better than expected yearly results. Net profit for 1999 rose to SFr 6.659 billion, an 11 per cent increase on the previous year. Most analysts had forecast an increase of around four per cent. Turnover was up two per cent to SFr 32.5 billion.

“During 1999 we further focussed our business portfolio on healthcare and achieved a record net income,” said CEO Daniel Vasella. “On the basis of this performance we propose raising the dividend by 10 per cent to SFr 32 per share.”

Most divisions posted strong performances, with pharmaceutical sales up four per cent. The company’s leading ten products saw sales expand by 12 per cent, a result which justified the policy of shifting resources towards key products, according to the company’s statement.

Other divisions such as consumer health, CIBA vision and generics also saw dynamic growth. But one dark cloud was agribusiness which saw sales decline by seven per cent.

The company said crop protection sales were hit by the weakness of farming economies and strong price competition from other companies.

But the division’s weak performance came as no surprise and Novartis plans to spin agribusiness off in the second half of the year. It is a move in line with the company’s strategy of transforming itself into pure healthcare and away from life sciences.

As well as publishing its results, Novartis confirmed plans to list its US receipts on the New York stock exchange later this year. Many analysts see that move as a sign that Novartis is seriously looking for a merger partner in the US.

Pressure for the company to find a US partner has increased of late amidst the merger mania that has hit the sector. Last week, Pfizer announced it was buying Warner Lambert in a 90 billion dollar deal to create the world’s second biggest pharmaceuticals company.

In January, the British giants Glaxo Wellcome and SmithklineBeecham announced plans to merge, giving birth to the sector’s biggest company worldwide.