Profits up at Algroup ahead of planned merger

Swiss packaging and aluminium group, Algroup, has posted a 16 per cent increase in net profit at SFr230 million ($134 million) for the first half of the year. The company affirmed its planned merger with Canada's Alcan is on track.

Algroup, which spun off its chemicals and energy division, Lonza, last year, said the increase in profit came from improved operational efficiency and strong demand.

In a statement, Algroup said it was “positive about the performance for 2000, with results expected to exceed the levels seen in 1999”.

The Zurich-based company had sales of SFr6.5 billion in 1999 with net profit from continuing operations of SFr440 million.

The group noted that growth in net profit was hit by an increase in the company’s consolidated tax to 27 per cent from 19 per cent a year earlier. Algroup said the higher tax rate was linked to the spin-off of Lonza.

The company said approval had been granted for a number of significant green-field packaging projects, “which are expected to yield good earnings in the second half of 2001 and beyond”.

Algroup is being bought by Canada’s Alcan Aluminium in a deal that will create the world’s second largest aluminium producer with annual revenues of SFr23 billion and 53,000 employees.

Algroup, which will account for 35 per cent of the new company, said the deal was expected to be finalised by the end of October.

Also reporting first-half results was the de-merged chemicals and energy group, Lonza. Its net income rose six per cent to SFr141 million, with sales increasing at the same rate to SFr1.2 billion.

Lonza expects a stronger performance in the second half of 2000, with results exceeding those seen in 1999.

swissinfo with agencies