(1888PressRelease)
May 14, 2009 - The level of activity in the first quarter of 2009 remained weak in Chemicals and Plastics, in the context of the crisis that has gravely affected the world economy since last year.
Group operating result (REBIT1; EUR 142 million) were down by 53% compared to the good result of the first quarter of 2008. However, it is up compared to the last quarter of 2008 in the Chemicals and Plastics sectors.
Aside from the miscellaneous income in the first quarter of 2008 (EUR 41 million from the sale of a non-strategic product and collection of a milestone payment linked to Luvox® CR), the operating result for the Pharmaceuticals Sector would be similar to last year. Commercial and administrative costs are down by 3% (EUR 10 million). The operating margin (REBIT on sales) of the Group was 7.2% in the first quarter of 2009 compared to 12.6% in the first quarter of 2008.
The net income of the Group (EUR 98 million) decreased by 55% compared to the first quarter of 2008; it was strongly up compared to the fourth quarter of 2008 (EUR 23 million).
REBITDA2 was EUR 262 million, down 36% compared to the high level of the first quarter of 2008.
The net debt to equity ratio reached 37% at the end of March 2009 compared to 33% at the end of March 2008, reflecting the Group’s policy of rigorous balance sheet management. It should be noted that the first significant maturity date for debt reimbursement will not occur until 2014.
Sales from the Pharmaceuticals Sector (EUR 632 million) were down 3% compared to the first quarter of 2008, despite sustained growth of certain drugs (in particular Androgel® and Creon®). Aside from the impact of Marinol® (EUR -23 million) which became generic in June 2008, it should be recalled that, following the approval of TrilipixTM by the FDA in the United States, revenues of EUR 39 million were recorded in December 2008 on sales to supply the distribution network for this drug.
Due to this, revenues from the fenofibrate franchise in the first quarter did not totally reflect the sales from the period. Operating result (EUR 91 million) was down by 33% compared to the first quarter of 2008. The latter included results from the sale of a non-strategic product and collection of a milestone payment linked to Luvox® CR received from Jazz Pharmaceuticals, together totaling EUR 41 million. If not for these items, operating result in the first quarter of 2009 would be comparable to last year. Investments in R&D (EUR 111 million) were slightly lower than in the first quarter of 2008 (EUR 117 million).
Sales in the Chemicals Sector (EUR 723 million) were down by 5%, due to the drop in demand, compared to the steady level of the first quarter of 2008. Operating result (EUR 56 million) was down by 33% compared to the first quarter of last year, but it improved compared to the prior quarter (EUR 31 million). In fact, it benefited from the positive effect of sales price hikes over the past months, especially for soda ash, caustic soda and, to a lesser extent, hydrogen peroxide, as well as containment of the production, commercial and administrative fixed costs.
Sales (EUR 629 million) from the Plastics Sector were down by 34% compared to the first quarter of 2008, in a very deteriorated global economic context, and following a particularly harsh winter. The impact of the crisis was very significant for the primary markets of the Sector, that is, automobile, construction, electronics and electricity.
It should be recalled that the crisis was amplified by significant inventory reductions. Aside from this drop in volumes, PVC also suffered from a significant drop in its prices, which is not the case for Specialty Polymers. The operating result for the first quarter of 2009 (EUR 3 million) was down compared to the high level of the first quarter of last year (EUR 90 million). However it improved compared to the last quarter of 2008 (EUR -26 million).
http://www.solvay.com/
###
