Lonza reports ‘solid’ first half

Continues to be affected by uncertain economic environment

Swiss drug industry supplier Lonza has reported solid first half results across all sectors, despite economic uncertainties. The Basel-based group saw its net profit in the first six months decline by 3.1% to CHF94m (US$94.89; €78.26).

Sales grew by 64.6% to CHF1.96bn, mainly owing to the acquisition of US firm Arch Chemicals.

The firm said demand in Custom Manufacturing was firm, resulting in high capacity utilisation in both chemical and biological plants, as well as a strong project pipeline.

Microbial Control, which now includes Arch, delivered a solid performance in the first half of 2012 in all sectors, driven by the US Water Treatment business and emerging markets.

Life Science Ingredients also delivered an above-target performance, Lonza said. Price increases were successfully implemented to offset volatile raw material prices, which persisted in the first half of the year.

Bioscience saw major growth in the Therapeutic Services segment and in Asian markets. Cell therapy operations in Singapore were started successfully.

Lonza’s new ceo Richard Ridinger, who took over the helm on 1 May, said he had identified ‘a number of key opportunities which will help the company to return on a profitable growth path’.

These include a stronger focus on target markets, near term cost reduction through the VispChallenge cost containment project and the integration of Arch Chemicals, plus longer term operational improvements in global manufacturing footprint, administration and site and legal entity structure.

‘Multiple megatrends are affecting our business. These include: a growing world population, the ageing population in Western countries, movement and growth of populations in megacities, and a growing middleclass in emerging markets,’ Ridinger said.

‘I am pleased that Lonza will be able to offer promising solutions in these environments through its key market segments and technology platforms. This opens exciting prospects going forward.’

Lonza’s target for the rest of 2012 is to deliver 10–15% growth in EBIT compared with fiscal 2011.