Hoechst profits double as product prices soar

TOM STEVENSON

Deputy City Editor

Soaring product prices and buoyant volumes helped the German chemicals giant Hoechst almost to double profits in the six months to June. First- half profits exceeded those recorded at the peak of the last cycle in 1989.

The result, driven by strong performances in the chemicals and plastics businesses, outstripped analysts' expectations. They had forecast a 76 per cent rise in profits against a reported 96 per cent increase to DM2.1bn (pounds 917m), up from DM1.1bn.

The profits were struck from sales of DM26.3bn, a 6 per cent rise on the first half of 1994. Margins rocketed from 4.4 to 8.1 per cent.

Unit sales were up 5 per cent and sales prices were an average 8 per cent higher than a year earlier, Hoechst said. But it added that currency fluctuations cut sales by nearly DM2bn, or 8 per cent.

The company said: "Management are also expecting favourable business in the second half of the year and for 1995 as a whole a strong increase."

The figures excluded Marion Merrell Dow, which Hoechst acquired in two stages in June and July. After changing its name to Hoechst Marion Roussel, the new subsidiary will be consolidated from 1 July.

The plastics division achieved the strongest increase in sales, with turnover rising 24 per cent to DM2.65bn. Chemicals division sales rose 18 per cent to DM2.93bn, fibres sales 6 per cent to DM3.74bn and speciality chemicals 5 per cent to DM4.38bn.

Hoechst said European sales rose 11 per cent to DM14.9bn and sales in Asia, Africa and the Pacific region combined were up 5 per cent at DM4.09bn. American sales slipped 2 per cent to DM7.26bn as a result of the weaker dollar.

Analysts argued that if the dollar continues its recent appreciation, the effects could help offset a traditionally weaker third quarter. A stronger dollar would be especially helpful for Hoechst's pharmaceuticals and agriculture business, where production is still largely based in Germany, analysts added.

The stronger dollar could also lend psychological support to sector share prices as it may dampen lingering fears that a price decline will eventually knock earnings lower.

This year's unexpected mark appreciation, particularly against the dollar and several European currencies, has hit German companies hard, including the three big chemicals businesses, Hoechst, BASF and Bayer.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable