Sulzer records higher 2002 profit

Swiss engineering concern Sulzer has reported a rise in net profit in 2002, helped by asset sales.

Sulzer said profit had jumped to SFr83 million ($62 million) from a breakeven result of SFr2 million the year before.

But consolidated operating income during the same period was down two per cent on the previous year at SFr143 million ($108 million).

Sales during the period also fell slightly, to SFr1.946 billion from SFr1.965 billion in 2001.

The company, which embarked on a major restructuring programme in 2001, said in a statement that 2002 had “brought a return to stability” after the sell-off of the medical appliances division, Sulzer Medica (now Centerpulse) and Sulzer Burckhardt (now Burckhardt Compression) in 2001.

Centerpulse was involved in a lengthy and costly litigation battle in the United States over faulty hip implants.

“Averting the threat of Centerpulse product liability claims in the USA, successful conclusion of the divestiture programme… and the attainment of greatly improved financial results were the milestones on this way,” Sulzer said.

But it admitted that its Pumps division was still plagued by problems as a result of lawsuits in the US relating to asbestos. Provisions had been made for settling the 38 lawsuits filed as of the end of January, Sulzer said.

“Solid foundations”

“It is very encouraging that despite market-driven volume stagnation, all divisions show clearly positive earnings,” Sulzer CEO Fred Kindle commented.

“Sulzer now stands on solid foundations both financially and strategically.”

The company said it expected 2003 to be “demanding”, and it would be putting the emphasis on operational improvements in its core divisions.

Improvement?

But Carla Barella, an analyst from Zurich cantonal bank, said that the figures were nothing special.

“Looking at the figures one could think that it’s a big improvement,” Barella told swissinfo.

“But the fact is that the figures of last year were affected by some extraordinary costs due to some divisions that have been divested in the meantime and what also improved the results this year was the selling of some real estate,” she added.

Barella said that she was expecting only a small improvement in the operating margins, due to market conditions.

“The divestment programme is now over but the outlook is still tough because of the weak economic situation and the continuing price pressure, so they still have tough years in front of them,” she added.

swissinfo with agencies

Sulzer summary

Sulzer net profit jumped to SFr83 million in 2002 from SFr2 million the year before.
Sulzer said the results were helped by the sale of assets.
Operating income and sales both dipped during 2002.
The company said it faced the future with confidence, and would be concentrating on core activities.