Operating profit at the engineering concern, Sulzer, rose by a higher-than-expected 56 per cent to SFr154 million ($91.88 million) last year.This content was published on March 8, 2002 - 10:38
Attention is focusing on Sulzer's operating result because the company is close to the end of a huge restructuring operation, making net profit figures largely meaningless.
Sulzer's bottom line was hit last year from one-off costs to fend off a hostile bid, combined with the sale of less promising businesses and the spin-off of Sulzer Medica.
The company actually posted a net profit figure excluding Medica of SFr2 million compared with SFr64 million in 2000. It said it would pay no dividend this year.
Sulzer is now made up of four key units, the largest of which is Sulzer Pumps. Sulzer Metco supplies the car, paper and machine tools industries, Sulzer Chemtech is a process technology supplier and the last is Sulzer Turbomachinery Services. Sales in these key operations rose 11 per cent.
Discontinued operations at Sulzer, which last year divested businesses with sales of around SFr1 billion, include Sulzer Infra and Sulzer Textil.
Problems at Sulzer Medica, which became independent in the middle of last year, cast a shadow over Sulzer's performance. Sulzer said it lost a net SFr448 million in connection with Sulzer Medica last year in comparison with a net profit of SFr206 million in 2000.
The loss reflected provisions by Medica for product problems arising from faulty hip and knee implants in the United States.
Medica is working on court approval for a $1 billion cash and stock class settlement offer to thousands of patients to help prevent possible bankruptcy of its US unit.
Sulzer refused to be drawn into the legal action after the problems came to light late in 2000, but under growing pressure and after being named in lawsuits itself it has now agreed to contribute to the settlement.
Sulzer shares have risen more than 30 per cent this year on hopes of a better year after shares fell by more than two thirds in 2001.
swissinfo with agencies
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