Rhone-Poulenc In Recovery

French chemical company Rhone-Poulenc said that its performance in 1994 was "substantially improved," and that the year was one of "transition and business consolidation." The results were affected by several exceptional items, but their combined impact was neutralized, as capital gains on the disposal of assets and the use of tax credits offset provisions for restructuring and additional depreciation charges.

Sales increased 7.1% to 86.3 billion French francs ($16.3 billion), with growth on a comparable basis of 5.8%. The company said that growth was primarily driven by a 6.3% rise in sales volumes. It was noted that policies to reduce health care costs lowered drug prices in several countries.

Net income almost doubled to 1.9 billion francs. The health care sector is still the largest contributor to group earnings (77%) despite a decline in operating income of 5.7% in 1994. The decline was caused by a large provision for restructuring, along with an exceptional gain from 1993 (see Marketletter February 6 for 1994 results of Rhone-Poulenc Rorer). Group earnings per share were 6.40 francs, ahead 67.5%.