German speciality chemicals company H&R WASAG saw its pre-tax profits halve to €3.1 million in the first six months of this year, hit by high and volatile raw material costs that impacted its flagship Chemical and Pharmaceutical division.
The group said in its interim report that earnings before taxes will likely fall from €10.8 million in 2002 to about €8.3 million for full-year 2003, although revenues should put in 15 per cent growth to €220 million in line with its earlier forecasts. Half-year turnover was up 3 per cent to €99 million.
H&R WASAG stressed that the second quarter showed signs of a recovery in profits after a shaky start to the year, helped by the easing of the crude oil market following the end of the military conflict in Iraq.
"Throughout the group … sales activities have developed along satisfyingly stable lines despite the sustained weakness in the economy," it said in a statement.
The economic situation and the pressure on margins in Chemical & Pharmaceuticals will hold back profits for the full year, with the Raw Materials and Plastics divisions contributing equally to this result.
Commenting on the figures, the group's chairman, Dr Horst Hollstein, said: "During the current year we have above all continued to lay the foundations for a successful future. Thanks to the outstanding alignment of our activities, the sustained crisis in the economy will affect us far less than other companies in our markets."