ICI sees modest promise in outlook

Click to follow
SIR Denys Henderson, chairman of Imperial Chemical Industries, said yesterday that the economic outlook was 'modestly promising' - his most upbeat message for four years. But he warned that there were still serious problems in the European chemical industry.

His comments came as the group announced a pounds 374m profit before tax for 1993, a sharp reversal from last year's pounds 384m loss. That 1992 loss was due to a pounds 595m charge for restructuring and disposals - reduced to pounds 94m in 1993. But profits from continuing businesses, excluding Zeneca - the pharmaceutical business floated off by ICI last June - rose 78 per cent to pounds 290m.

'The results for 1993 are relatively encouraging in the context of a difficult global marketplace,' Sir Denys said. 'With overall sales volumes virtually flat and prices under pressure, the improvement in profits from continuing operations essentially came from cost reductions and currency.'

ICI estimates that restructuring saved pounds 150m last year, bringing the total cost reductions to pounds 340m. Ronnie Hampel, chief executive, said the group was on target to achieve the promised pounds 490m saving by the end of next year.

The group cut 4,700 jobs last year, and another 9,000 left the group through disposals, bringing the total staff reduction since the end of 1990 to 32,500.

The most significant improvement came in the industrial chemicals division, which made a pounds 106m profit compared with a pounds 17m loss last time. The materials business also managed to maintain profits but paints reported a 10 per cent fall in profits to pounds 115m.

Earnings per share were 19.2p, compared with a 79.9p loss last time. The dividend is 27.5p, half the payment from ICI and Zeneca combined last time, via a second interim of 17p. The shares closed down 2p at 750p.

Bottom Line, page 34