Roche Swung to Full-Year Loss on Vitamin
Charges
BASEL, Switzerland (Dow
Jones Newswire) -- Roche Holding AG (RHHBY) Wednesday said extraordinary
charges on its vitamin operations and its equity portfolio led to a 2002
net loss of 4.03 billion Swiss francs ($2.97 billion or 2.76 billion euros),
compared with a net profit of 3.70 billion francs a year earlier.
However, the Swiss pharmaceuticals
and diagnostics company plans to increase the dividend to 1.45 francs
from 1.30 francs.
Operating profit fell to 1.34 billion
francs from 3.25 billion francs, while sales rose to 29.73 billion francs
from 29.16 billion francs.
The company repeated it expects double-digit
sales growth in local currencies in 2003, both in the pharmaceuticals
and diagnostics divisions. It also predicted a stable operating margin.
Extraordinary charges for 2002 totaling
9.4 billion francs, consisted largely of a 5.2 billion franc writedown
on Roche's investments. Roche said it has decided to realize the losses
that have amassed in its equity portfolio of Swiss blue-chip stocks.
The remaining writedowns, which it
announced earlier, are made up of a 1.77 billion franc provision for legal
action related to the company's former vitamins cartel, as well as 1.65
billion francs in impairment charges associated with the sale of the vitamins
division to DSM NV of the Netherlands.
It has also set down 778 million francs
in provisions for possible fines associated with a lawsuit involving its
majority-owned biotechnology company Genentech Inc.(NYSE:DNA) (DNA).
Revenue in the pharmaceutical division
was up 2% - or 9% in local currencies - to 19.31 billion francs, helped
by the integration of Japanese pharmaceuticals company Chugai Pharmaceutical
Co. Ltd. The company's top-selling cancer drug MabThera/Rituxan surpassed
two billion francs in sales for the first time.
The diagnostics division grew revenue
by 5% - or 11% in local currencies - to 7.24 billion francs.
Operating profit margins were 21%
for the pharmaceuticals division and 16% for the diagnostics division.
Roche plans to strengthen its diagnostics division by taking over Swiss
insulin-pumps maker Disetronic Holding AG.
Speculation has re-emerged recently
that Roche may become a takeover candidate after cross-town rival Novartis
AG (NVS) said it increased its stake in Roche to 32.7% from 21.3%.
Roche, which is controlled by its
founding families, says it wants to stay independent.
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