No Major Changes To Be Made At Rhone-Poulenc

Earnings are still insufficient for a group such as ours, commentedRhone-Poulenc's chairman Jean-Rene Fourtou, at the end of January, when the group announced a 28.4% rise in net income to 2.7 billion French francs ($4.5 billion), an earnings per share increase of 25.8% to 8.44 francs, operating income of 6.9 billion francs, up 38.5%, and sales growth of 3% on a comparable basis to 85.8 billion francs. He was also adamant that there would be no major changes to the group in the current year.

Mr Fourtou's flat denial that the group would make any major acquisitions this year was a clear indication that R-P has no interest in acquiring, or linking up with, fellow French company Sanofi, which has been offered up as a potential partner for alliances in health care by its parent, Elf Aquitaine (Marketletters passim). Mr Fourtou said the group's priority now is internal development. He also reiterated that he has no intention of splitting the group into separate health care and chemicals entities.

Despite net income rising over 28%, Mr Fourtou was not satisfied with the performance, and said that there were three main problems for R-P in 1996. The global polyester crisis had a heavy impact on the group's fibers and polymers division. In chemicals, there was a significant decrease in profitability of titanium dioxide and other intermediates, and in the group's health sector, the halting of production of albumin by joint-venture company Centeon (Marketletters passim) had a negative effect on earnings.