Currency-Related Distortions Hit Astra

Astra, the Swedish pharmaceutical company that usually posts double-digit profits growth, was hit in the first six months of 1996 by exchange rate fluctuations, which led to the firm announcing profits growth of just 7% (Marketletter August 19). The firm's share price slipped to 274.50 kroner ($41.42), down 9 kroner, following the announcement on August 15.

The negative effect of currency movement, primarily the weakness of the kroner against the US dollar, led to Astra's profits of 6.7 billion kroner ($1.01 billion) being depressed by around 600 million kroner. However, the firm insisted that underlying growth is still strong and that Astra outperformed the market in Europe and the USA.

There were some suggestions that the share price was also affected by the sexual harassment allegations that have been made against the former head of Astra's US business (Marketletters passim). But Astra noted that there were no business side effects from the allegations.