First half net profits at the Swiss engineering firm, Sulzer, have fallen to SFr42 million ($27.7 million), a drop of SFr78 million on the same period last year.This content was published on August 27, 2002 - 08:58
Earnings came in above analysts' expectations - the main reason for the weaker bottom line was the absence of divestment gains which boosted 2001 earnings.
The company said the results were "satisfactory" and predicted it would "end the year with a respectable net income compared to the breakeven result of the prior year", when net income was just SFr2 million.
Profits for the first half of last year benefited from the sale of medical appliances division, Sulzer Medica, now known as Centerpulse.
Core earnings before taxes, interest and amortisation from Sulzer's continuing businesses rose to SFr57 million from SFr53 million the year before.
Operating income for the core divisions fell by 26 per cent to SFr31 million while sales held steady at SFr939 million when continuing businesses are compared.
Net sales plunged almost 50 per cent if no adjustments are made for divestitures, acquisitions and currency effects.
"Although operating income has fallen short of the desired level, these mid-year results prove the profitability of the realigned Sulzer Corporation even under difficult circumstances," said Sulzer CEO, Fred Kindle.
Our healthy balance sheet and good cash position form a solid basis for a profitable future."
However, the firm warned that the "situation in Sulzer's markets" is expected to remain difficult until the end of the year.
It also cautioned that while a stronger second half is expected, the difficult global economic climate meant that the core divisions would not be able to match their operating profit for 2001.
Sulzer said it was sticking to its longer-term target of sales of SFr3 billion by 2005.
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