Hoechst Recovers From 1993 Malaise

Hoechst Group sales for the third quarter of 1994 improved by 8% over the like, year-earlier period to 36.4 billion Deutschemarks ($23.3 billion). Pretax profits for the quarter showed a large rise of 83% to 1.7 billion marks over the same period last year. However, said Jurgen Dormann, chairman of Hoechst AG, speaking at the company's autumn press conference in Frankfurt, Germany, the impressive increase in profits was due to a particularly low level of profits in 1993. Additionally, he said, the apparently large increase does not reflect the actual poor return on sales of 4.6%.

The growth in sales for the group was due in the main to increases in North America and southeast Asia, with the latter showing a gain of 13.7% compared to the previous year, said Mr Dormann. However, he noted, there was also a revival in activity in Europe and Japan, which means that business is improving globally.

Turning to the company's health care divisions, Mr Dormann said that the picture was variable depending on the market. Hoechst's French subsidiary Roussel Uclaf's pharmaceutical business showed good expansion, whereas in contrast the pharmaceutical business in the USA is struggling. Mr Dormann said that the formation of managed care providers, horizontal and vertical consolidation and penetration by generics manufacturers all combined to put pressure on US business. Hoechst Roussel was also adversely affected by considerable restructuring measures and the expiry of the patent on DiaBeta (glibenclamide), its highest selling product in the USA.