One-off charge hits Synthes-Stratec profit

The implant company expects an improvement in its 2004 figures Keystone

The Swiss medical device manufacturer, Synthes-Stratec, has reported that net profit for 2003 plunged by almost 70 per cent to $80.3 million (SFr102.92 million).

It said profit had been hit by a non-recurring charge of $215 million on research and development related to the acquisition of the Spine Solutions company.

Synthes, which makes orthopaedic instruments, implants and surgical power tools, said in statement on Wednesday that its earnings had been hurt by heavy development expenses and selling costs.

Total sales grew last year by 21.8 per cent to $1.23 billion, it added.

In February the company completed the SFr1.5 billion cash and shares takeover of Mathys Medical’s osteosynthesis businesses. Osteosynthesis is the surgical treatment of bones.

However, the merger is still subject to regulatory approval by the German authorities.

In its outlook, Synthes said it had a “healthy” new product development pipeline and a “unique opportunity to begin to leverage its product development and manufacturing expertise on a global basis”.

The company expects an improvement in gross and operating margins in 2004 to be followed by a further acceleration.

swissinfo with agencies

In brief

Synthes is the world leader in the trauma segment of the orthopaedic market.

The board of directors has approved a dividend of SFr7 per share for the year 2003.

The company, which is based at Oberdorf in canton Basel Country, had a staff of 4,290 worldwide at the end of December – an increase of 487 compared with the previous year.

The majority of the staffing increases were in the areas of manufacturing and sales.

In May last year, Synthes-Stratec took first place in a survey of Switzerland’s most dynamic businesses.