Lonza grows H1 profit despite dip in sales

By Nick Taylor

- Last updated on GMT

Related tags: United states dollar, The quarter at tropicana, Lonza

Lonza has posted a 14.4 per cent increase in net profit in the first half of 2010, despite a dip in sales.

Net profit increased to CHF135m, up from CHF118m a year ago, but this was driven by lower costs, not increased sales. Total sales dipped by 2.1 per cent to CHF1301m.

The drop in sales was primarily caused by a weak first quarter at the custom manufacturing unit, the largest division, where revenues dropped by 6.8 per cent to CHF658m. This was due to low first quarter capacity utilisation at sites in Portsmouth, UK and Hopkinton, Massachusetts, US.

Biologic manufacturing capacity utilisation improved in the second quarter but is still below 2008 levels, and well below the historical highs achieved in 2006 and 2007.

Although the unit struggled in the latest financials Lonza is optimistic about the next 18 months. New contracts signed by the unit increased, contributing to “considerably higher​” overall orders, and this is expected to drive stronger growth in the second half of the year and through 2011.

Over this period the effects of the restructuring project will also start to be felt. Lonza initiated the project in the fourth quarter of 2009 with the goal of reducing fixed costs by CHF70-80m. These reductions, achieved by closure of a number of sites, will be realised in the first quarter of 2011.

Unit performance

Bioscience sales also decreased, dropping by 9.4 per cent to CHF106m. Lonza attributes the decline to lower cells in therapeutic cell solutions due to longer or delayed approvals by regulatory authorities. It also noted that client R&D budgets are still below pre-downturn levels.

However, the cell solutions business has a strong and diverse pipeline and this, coupled to recovery of the biopharm production market, is expected to continue the upwards trend seen in the second quarter.

Life science ingredients sales grew by 5.9 per cent to CHF536m. However, higher raw material costs, unfavourable exchange rates and increased competitive activities are increasingly pressuring margins.

Related news

Show more

Related products

show more

Q&A: Effective Drug Product Process Development

Q&A: Effective Drug Product Process Development

Catalent Pharma Solutions | 14-Jan-2021 | Insight Guide

In this Q&A, a Catalent Biologics expert shares his expertise with drug product process development challenges, risks and how to mitigate them, the...

Why Blister Packaging: Things to Consider

Why Blister Packaging: Things to Consider

Catalent Pharma Solutions | 03-Dec-2020 | Insight Guide

The decision to use blister packaging for either clinical trials or commercial drug manufacturing comes with a host of factors to consider. Pharmaceutical...

Seasonal Vaccine Manufacturing

Seasonal Vaccine Manufacturing

Baxter BioPharma Solutions | 19-Oct-2020 | Technical / White Paper

The production of seasonal vaccines, such as those for influenza, presents unique challenges to manufacturers due to the necessary time constraints resulting...

Related suppliers

Follow us


View more