Net profits before extraordinary gains at Belgium“s Solvay group fell 8% from BFr 12.5 billion to BFr 11.5 billion (US$ 348 million) – equivalent to a fall in earnings per share from BFr 1,475 to BFr…
Net profits before extraordinary gains at Belgium“s Solvay group fell 8% from BFr 12.5 billion to BFr 11.5 billion (US$ 348 million) – equivalent to a fall in earnings per share from BFr 1,475 to BFr 1,326. Net profits including one-off gains increased 9%, however, to BFr 13.5 billion, or BFr 1,577 a share. Net gains worth BFr 2.1 billion included profits on the US$ 450 million sale of animal health activities to American Home Products, of the US, and the sale of a mineral water company and property. These should be offset by the closure of a caustic soda and chlorine plant in Austria and a plastics and PVC operation in Brazil. Sales and acquisitions had a net positive impact of about BFr 3.2 billion on total group turnover, which grew 3% to BFr 282.7 billion. Solvay“s CEO Daniel Janssen said he would make no forecast for earnings in 1997. “I would not like to make any forecasts for 1997 whatsoever ….(but) I am certainly hoping that 1997 current profits will return to the 1995 level,” he told a news conference. Hopes for 1997 were based partly on an expected continuation of a recovery for PVC and high-density polyethylene prices, he said. Together with polypropylene, the two products make up the plastics sector, where results dropped by more than 50% in 1996. The sector accounts for about 30% of group sales. Solvay announced that research and development expenditures for 1997 would total BFr 12.1 billion, down from BFr 12.3 billion in 1996. Capital spending for 1997 will remain at the 1996 figure of BFr 28.0 billion.