Contracts and orders improving for Lonza
‘Solid’ business performance in all sectors in first half of 2010
Swiss specialist chemical manufacturer Lonza delivered a ‘solid’ business performance in all sectors despite volatility in exchange rates, pharmaceutical manufacturers cutting inventories and fluctuation in non-pharmaceutical markets in the first half of 2010.
Net profit was CHF135m (US$128.8m), up from CHF118m a year ago, even though sales at the Basel-based company fell to CHF1.30bn from CHF1.32bn.
Overall, new contracts and orders were at a considerably higher level than a year ago, which will drive stronger business growth in the second half of the year and through 2011, the company said.
However, de-stocking in Custom Manufacturing continued in the first half, and volatility is expected to continue, especially for the small-scale business. Sales this sector declined by 7% to CHF658m, while EBIT increased by 3% to CHF94m.
Sales of life science ingredients increased by 6% to CHF536m due to improved volumes for nicotinates, strong demand for industrial products and a turnaround of the Microbial Control business. EBIT increased by 17% to CHF81m, with an improved margin of 15%.
Bioscience sales fell by 9.4% to CHF106m in the first half of 2010, but strengthened in the second quarter. This was mainly due lower sales in Therapeutic Cell Solutions as a result of longer or delayed approvals by regulatory authorities, said Lonza.
A stronger performance is expected in the second half of 2010 as a result of several new products, such as the 4D Nucleofector in June.
‘Lonza’s life-science strategy will continue to deliver long-term growth through an increased project pipeline, new signed contracts and an intact outsourcing trend, and investments in plants and technologies,’ said Stefan Borgas, Lonza’s chief executive.
‘We will continue to generate new business which will improve the profitability of our assets and strengthen our cash flow generation.’