Swiss chemical company Ciba scaled back its market growth forecasts and announced more job cuts today in the face of a global economic slowdown but reported a three per cent rise in first-half net profits to $133.5 million.
Ciba said it now expected the overall market for specialty chemicals to contract this year rather than grow two per cent as originally thought. Still, the group said it expected to boost net profits this year and aimed to match the 2000 sales level.
It would cut 450 jobs by the end of next year - in addition to 150 jobs that have already been eliminated this year - in a bid to achieve annual cost savings of euro 46 million.
Ciba did not repeat earlier forecasts of double-digit earnings growth in 2001, but instead said profitability would come in at the lower end of its target range of between 17.1 and 17.6 per cent of sales.
Chief financial officer Mr Michael Jacobi said "We now would think that in the United States probably toward the year end we would see some recovery and the rest would come next year."
The Americas account for 36 per cent of Ciba sales, so roughly 30 per cent comes from the US market, he said. Europe accounts for 38 per cent and Asia 26 per cent of sales.
Mr Jacobi said bright spots in the first half were southeast Asia and Latin America.
Ciba shares have fallen around 6.8 per cent so far this year after touching a high in March, but they have outperformed the Dow Jones Stoxx chemicals index by more than 11 per cent.