Profit at Ciba falls on restructuring costs
Ciba Specialty Chemicals has reported that its net profit for 2004 fell by almost ten per cent after the inclusion of restructuring costs and special charges.
The company said that net income declined to SFr311 million ($261 million) from SFr344 million in 2003.
However, Basel-based Ciba noted that before the restructuring and special charges, net profit had improved by ten per cent to SFr379 million.
Ciba, which produces dyes and pigments, said in a statement that sales were up by six per cent in Swiss francs taking them past the SFr7 billion mark (SFr7.027 billion).
Most of the increase was due to acquisitions, including Finland’s Raisio Chemicals.
The company announced last October that it was cutting 950 jobs including up to 300 in Switzerland, and booked SFr80 million in restructuring charges during the fourth quarter. Ciba expects to spend a total of SFr125 million on restructuring.
About 400 of the job cuts are due to the acquisition of Raisio, while the remainder are in the textile dyes division. In this sector, Ciba is closing eight sites in Europe and moving production to lower-cost plants in Asia.
During the last quarter of 2004, Ciba recorded a SFr22 million loss after restructuring costs, while sales reached SFr1.766 billion - up nine per cent - boosted by the integration of Raisio.
In its outlook, the company announced that it expected to face a number of “difficult” challenges, including tough competition, the high cost of raw materials and the ongoing negative impact of currency variations.
“Assuming business conditions in 2005 are equivalent to last year and that currency levels do not worsen further, the company expects higher sales… and comparable net income above last year’s levels,” Ciba commented in the statement.
Analysts have warned that the company might have more difficulty than most of its competitors because of its large cost base in European currencies, while it derives a third of its sales from the United States.
swissinfo with agencies
Ciba SC is one of three companies created by the merger of Ciba-Geigy and Sandoz in 1996, along with Novartis and Syngenta.
The group supplies dyes and pigments to textile, car, cosmetic, plastics, paper and construction industries.
Basel-based Ciba SC employs around 19,000 people on 80 sites in 30 different countries.
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