DSM's 3rd-qtr 2006 profit drops 5%

Netherlands-based pharmaceutical and nutritional ingredients group DSM says that its net profit in the third quarter of 2006 fell 5% on the like, year-ago period, to 140.0 million euros ($178.2 million), despite a 9% rise in net sales to 2.09 billion euros, while operating profit (earnings before interest and taxes) dropped 5% to 209.0 million euros.

In its pharmaceuticals division, sales were down 7% to 216.0 million euros due to lower volumes and exchange rates at slightly higher selling prices. Despite the decrease, operating profit for the cluster increased due to the effects of ongoing restructuring and a related improvement of the product mix. At DSM Pharmaceutical Products, the South Haven, USA, site was sold at the end of the quarter, resulting in a book profit reported under exceptional items. DSM Anti-Infectives' result improved compared to both third-quarter 2005 and second-quarter 2006 but remained negative, with selling prices on average remaining at the same level as in the second quarter of the year.

DSM noted that increased energy prices and raw material costs had an anticipated impact on the results for this quarter, and confirmed its prediction that operating profit for full-year 2006 will be 6%-8% higher than last year.