Solvay's 2008 profit drops 46%, hit by losses on Fortis holdings and forex effects

Belgian pharmaceuticals and chemicals firm Solvay says that 2008 profit declined 46% year-on-year to 449.0 million euros ($574.5 million). The  firm was hit by adjustments in the book value of holdings in banking and  insurance company Fortis totaling 243.0 million euros.

Group sales for 2008 totaled 9.49 billion euros, down 1%. The demand for  the company's principal products, which held steady for the first nine  months of the year, contracted sharply during the fourth quarter,  following the global economic crisis that led, especially in December,  to "a quasi-paralysis of certain activities of our customers," the  firm said.

Excluding currency effects, full-year sales would have increased by 1%.  Solvay says it succeeded in coping with the financial downturn by  diversifying its activities, by the rigor of its balance sheet  management, control of its working capital needs, temporary reduction of  some production and timely targeted restructuring. The group ended the  year with a net debt to equity ratio of 34% compared to 29% at the end  of 2007, amounting to 1.59 billion euros versus 1.31 billion euros.