Hafslund Nycomed Net Hit By Sterling Buy

Norwegian pharmaceuticals and energy group Hafslund Nycomed made the biggest acquisition in the company's history last year, with the purchase of Sterling Winthrop's USA-based diagnostics business. This has given the company a leading and strategically important position in the contrast media market. In 1994, 55% of HN's contrast agent sales were handled by its own organization, compared with 21% in 1993. And in 1995, almost 80% will be made through its own organization. HN notes that this major strategic acquisition has had a negative impact on 1994 earnings, but has laid the groundwork for new growth in 1995.

For 1994, HN's operating revenues increased 18.8% to 7.82 Norwegian kroner ($1.17 billion), and profits before R&D costs of 856 million kroner (up 16%) were up 6.9% at 2.43 billion kroner ($364.9 million). However, preliminary income before taxes was down 16.3% at 1.31 billion kroner. This is below some analysts expectations; Goldman Sachs, eg was forecasting a figure of 1.45 billion kroner.

HN says competition has intensified in the US diagnostic imaging market, but market share has been maintained in the X-ray field and increased within the Magnetic Resonance Imaging sector. Moreover, the acquisition of the Sterling Winthrop business provides an opportunity for achieving synergistic benefits above and beyond the approximately 500 million kroner which will be realized already in 1995.