Food Ingredients boost DSM sales under difficult market conditions

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Related tags: Dsm, Generally accepted accounting principles, 2001, United states dollar

Dutch life science company DSM saw net profit for the fourth
quarter of 2001 rise to €1,031 million from €119 million in the
fourth quarter of 2000, largely due to the sale of the depositary
receipts. Profit on 4Q ordinary activities fell 50 per cent.

Dutch life science company DSM saw net profit for the fourth quarter of 2001 rise to €1,031 million from €119 million in the fourth quarter of 2000, largely due to the sale of the depositary receipts of Energie Beheer Nederland.

In fact, DSM posted a profit on ordinary activities after taxation of €56 million for the fourth quarter of 2001, 50 per cent lower than the profit for the fourth quarter of 2000, which was €111 million.

For the full year 2001, DSM's net profit was €1,415 million, an increase of 144 per cent compared with €580 million for 2000. The Dutch company said that this increase mainly related to book profits on the sale of Energie Beheer Nederland and DSM Engineering Plastic Products. DSM's profit on ordinary activities after taxation was €369 million, down 35 per cent on 2000 (€571 million). The profit on ordinary activities after taxation per ordinary share amounted to €3.61, which is 37 per cent lower than in 2000 (€5.71).

Despite the mixed results, DSM Managing Board chairman Peter Elverding remained positive.

"In 2001 we posted a record net profit of €1,415 million, and this has given us a very strong financial base for implementing our strategy Vision 2005: Focus and Value.

On the other hand, the profit on ordinary activities was unsatisfactory, but this is hardly surprising against the background of an unfavourable economic climate and tough market conditions. Considering these circumstances, the profit decline remained within reasonable limits,"​he said.

With regard to the outlook for 2002, Elverding was cautious: "I do not expect the economy to bounce back in the first half of 2002. This means that sales volumes and margins in various end-use markets will continue to be under pressure. The situation will probably improve in the second half of 2002, although it is still unclear how the various economic and market-related factors will develop. So far, business in the first quarter of 2002 seems to be developing in line with the fourth quarter of 2001."

Net sales in the fourth quarter of 2001 amounted to €1.8 billion, a decrease of 14 per cent compared with the fourth quarter of 2000. Net sales were negatively affected by lower selling prices (-8 per cent), on average lower autonomous volumes (-9 per cent) and exchange rate developments (-1 per cent). DSM stated that these effects were only partially compensated for by the positive balance of acquisitions and divestments (+1 per cent) and the effect of changes in the consolidation rules as of the financial year 2001 (+3 per cent).

Better margins, in particular for DSMAnti-Infectives and DSM Food Specialties, pushed the Life Science Products cluster's operating profit up 8 per cent. Sales of in the fourth quarter of 2001 were up 18 per cent on the corresponding period in 2000 as a result of the consolidation of DSM Catalytica Pharmaceuticals and of DSM Biologics.

The Life Science Products cluster once again achieved a double-digit percentage increase in profits for the full year (15 per cent), with sales showing an increase of 18 per cent. The company stressed that the strong performance of DSM Food Specialties, the restructuring programme at DSM Anti-Infectives and the consolidation of DSM Catalytica Pharmaceuticals provided a structural basis for this result. The results of DSM Fine Chemicals, on the other hand, are temporarily under pressure because of a delay in the introduction of several pharmaceutical products at a number of units, including DSM Catalytica Pharmaceuticals, whose contribution was lower than expected. The exchange rate for the US dollar had a favourable effect.

The proposed dividend per ordinary share for 2001 amounts to €1.75, the same as in 2000. An interim dividend of €0.58 per share having been paid in August 2001, the final dividend will amount to €1.17 per ordinary share. The dividend will be paid out in cash.

Related topics: Manufacturers, Ingredients

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