Chr Hansen profit dips on cost increases

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Related tags: Chr hansen, North america

The ingredients division of Danish company Chr Hansen pulled in a
DKK 369 million (€49m) profit for the fiscal year on sales of DKK
3.4 billion (€460m), a slight dip on the previous year on rising
costs.

But a 20 per cent rise in fourth quarter profit shows strong growth, boosted by 'increased marketing efforts new products and new sales offices,' said the firm.

The company's pharmaceutical excipients business put in what it described as a 'strong performance'. However, as revealed in the interim results statement, start-up of Chr Hansen's new plant for pharmaceutical excipients at Stoughton in Wisconsin, US, has cost more than originally anticipated. The plant is now running at increasing capacity utilisation.

These higher-than-expected production costs and changes in the product mix had the effect that gross profit in North America was lower than last year, which the Danish firm said was not satisfactory.

North American revenues dropped from DKK1.27bn to DKK1.2 bn, but South America showed growth in all product areas and revenue totaled DKK227 million, up from 220 million the year before.

In Europe, human health products, which includes excipients but also probiotic cultures, put in a 'favourable growth trend' according to the firm. Overallrevenue in Europe rose by 6 per cent to DKK1.68bn.

Turning to Asia, China continues to dominate the sales figures with cultures and colours rising on the back of growing demand. The firm has opened application centres in Malaysia, China and India.

Research and development costs for the group, that includes ALK-Abello, Chr Hansen's allergy vaccine arm, were 7 per cent of the revenue. The vaccines business recorded revenues of DKK1.05bn, helped by the launches of its SLITone in Central and southern Europe, although R&D costs meant that it made a net operating loss of DKK58 million.

Looking ahead to 2004/05 Chr Hansen said it will aim for organic growth of 5 to 6 per cent, bringing the firm sales of DKK3.5 billion.

Related topics: Ingredients

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