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[August 2003]
Organic Growth and Increase in Net Income for Imerys
Imerys reported that for the first half of 2003 consolidated sales grew 3.2% at comparable Group structure and exchange rates, but decreased 5.1% on a reported basis. Nevertheless, operating income remained virtually unchanged and net income from recurring operations improved by 10.7%.
This satisfactory trend was put down to an overall improvement in sales volumes compared with the low level in the first half of 2002 and continued improvement in the prices/mix component, plus the results of cost reduction and manufacturing optimisation efforts and significant decreases in financial expenses.
Chairman Grard Buffire said: "The Group's first-half performance is satisfactory. During the period, several external factors had significant negative impact. The Group continued to improve its intrinsic profitability and its strategic positions. It is ready to seize any profitable growth opportunities that would arise. If the global economy and the exchange rates of major currencies remain at their current levels, Imerys' net current income for the full year should grow at a fairly similar rate to the one achieved for the first half".
Operational income was virtually unchanged (-0.7%) at €183 million. This included the impact of changes in Group perimeter for plus €2.5 million and a substantial foreign exchange effect (-€12.2 million) at negative 6.6%, which was almost entirely due to the conversion effect on income from sales invoiced in US dollars and in pounds sterling. In total, operating margin improved further, from 12.7% in the first half of 2002 to 13.3% this time.
At comparable Group structure and exchange rates, consolidated sales were up in each of the business groups: 2.9% for Specialty Minerals; 5.2% for Pigments for Paper; 1.5% for Building Materials; and 3.9% for Refractories & Abrasives. However, with all but Building Materials, the basis of comparison was particularly low in the first quarter of 2002.
Net income from recurring operations totalled €106.8 million for the first half of 2003 compared with €96.5 million for the same period in 2002. This trend was due to a further significant decrease in financial expenses (at €21.4 million in the first half of 2003, versus €34.7 million in the first half of 2002), mainly as a result of the depreciation of the US dollar (approximately two-thirds of the Group's debts are stated in this currency), the fall in interest rates and the reduction in the Group's indebtedness compared with the first half of 2002.
The current tax charge amounted to €55.3 million, representing an effective tax rate of 34.2%, which is slightly below the level of 2002 (34.6%).
At €6.79 compared with €6.06 in 2002, net income from recurring operations per share increased by 12%. Following the cancellation of shares bought back by the company, the average weighted number of outstanding shares decreased from 15,910,631 in the first half of 2002 to 15,721,915 in the first half of 2003.
ENDS