Hoechst Warns Of A Tough Year Of Changes

German chemical and pharmaceutical group Hoechst has announced resultsfor the first quarter of 1997 in line with expectations, and consisting of a 33% fall in its pretax profits to 831 million Deutschemarks ($479.6 million). The figure includes a 195 million mark restructuring charge. Turnover in the first quarter was 13.12 billion marks, up 1%, with volume growth of 2%.

The group warned that because of the massive restructuring being undertaken, sales and profits for the year as a whole will be below those achieved last year. Total sales in 1997 are expected to come in at between 42 billion marks and 47 billion marks, compared with nearly 51 billion marks achieved in 1996. The group expects to spend around 500 million marks during the year on restructuring.

When the effects of deconsolidations, capital gains and the restructuring charges are stripped out, the pretax profits in the first quarter showed a 9% rise. Analysts Mark Tracey, Jackie Ashurst and Charles Brown at Goldman Sachs said that so great are the changes taking place within the Hoechst group that a great deal of analysis is required to unravel the underlying picture.