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.

Start your day with The Independent, sign up for daily news emails
Property
pets
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
Sport
football
ebooks
ebooksA celebration of British elections
  • Get to the point
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: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk