Roche: first-half profits up 15 percent after charges, gains

(AP) -- Swiss pharmaceutical giant Roche said Thursday its first-half net profit rose by 15 percent on the same period last year to SFr2.9 billion ($1.9 billion).

(AP) — Swiss pharmaceutical giant Roche said Thursday its first-half net profit rose by 15 percent on the same period last year to SFr2.9 billion ($1.9 billion).

The figure took into account special charges related to its involvement in a vitamins price-fixing scheme, Roche said.

It also included a gain of SFr1.6 billion ($1.05 billion) from an agreement to buy outstanding shares of United States biotech firm Genentech Inc. and then make a public offering to sell around 17 percent of the shares.

In May, the U.S. Justice Department said Roche and BASF AG of Germany had agreed to plead guilty and pay a record $725 million criminal fine for engaging in a worldwide conspiracy to raise and fix the prices of vitamins. Roche’s share was $500 million.

On top of that, “in view of the private civil suits in the United States on behalf of direct purchasers of vitamin products an additional provision of $640 million has been recorded,” Roche said in a statement. “This provision includes the related legal
costs.”

The company said its first-half profit rise, on sales of SFr13.4 billion ($8.8 billion), stemmed from strong performances by its diagnostics and pharmaceuticals divisions.

The rapid growth of the Xenical weight-control drug was a key factor, Roche said.

“Excluding special items related to the vitamin case and the results of the Genentech transaction — and barring unforeseen events — Roche anticipates another good full-year result for 1999,” it said. The full-year net profit for 1998 was SFr4.39 billion (then $3 billion).

In pre-market trading, Roche’s non-voting share was up SFr135 ($88.80) to SFr17,320 ($11,395).