Hoechst profits down by 30%: Second-half warning brings fears of third dividend fall

HOECHST, the German chemicals and drugs group, yesterday predicted a very tough second half after unveiling a 30.9 per cent fall in first-half pre-tax profits to DM781m (pounds 307m).

The warning fuelled speculation that the company may have to cut its annual dividend for the third successive time.

First-half sales fell by 2.4 per cent to DM22.9bn. Hoechst said prices and sales volumes for chemicals in Europe were considerably below the previous year's level in the first half of 1993 and fell back slightly year-on-year in the US.

In a letter to shareholders Hoechst said speciality chemicals and paints sales barely reached 1992 levels and the earnings situation was difficult.

Fibre sales in Europe remained unsatisfactory and in the textiles sector Hoechst suffered losses as price pressures increased. Textile and technical fibres had held up well in the US.

Hoechst said the situation in the European plastics market had worsened as the automobile industry slumped, and the group's car paint business was increasingly affected. However, sales of technical plastics rose in the US.

Domestic sales of medicines through pharmacies fell sharply below 1992 levels, and overall pharmaceutical sales in Germany dropped by 6 per cent in the first half.

Lower agrochemicals volumes in Europe were offset by higher sales in North America and Eastern Europe.

Hoechst, whose parent company made an unspecified operating loss, said that a cost-cutting programme would soon be put into effect because of the lack of prospects for a sharp improvement in demand.

Last week the two other German chemicals giants reported a slump in profits. BASF announced a pre-tax fall of 50 per cent to DM483m and Bayer said its profits had fallen by 20 per cent to DM1.4bn.

In 1992 Hoechst was forced to cut its dividend to DM9 from DM12 while BASF went down from DM12 to DM10 and Bayer reduced from DM13 to DM11.

Bayer may be able to maintain dividend payments because its profitable pharmaceutical business has shielded earnings from the brunt of Europe's recession.

PROMOTED VIDEO
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
News
i100
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
Extras
indybest
News
Richard Norris in GQ
mediaGQ features photo shoot with man who underwent full face transplant
Sport
Lionel Messi looks on at the end of the final
football
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Your picture is everything in the shallow world of online dating
i100
News
The Swiss Re tower or 'Gherkin' was at one time the UK’s most expensive office when German bank IVG and private equity firm Evans Randall bought it
news
Life and Style
Attractive women on the Internet: not a myth
techOkCupid boasts about Facebook-style experiments on users
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
football
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

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

HR Business Partner (Maternity Cover 12 Months)

£30000 - £34000 Per Annum 25 days holiday, Private healthcare: Clearwater Peop...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on