DSM fiber intermediates & fertilizers post strong sales in 2005
09 Feb '06
4 min read
The cluster yielded strong results in 2005, profiting in full from favorable market conditions for fiber intermediates and fertilizers. The overall supply/demand balance in these markets enabled good margins, despite high and volatile raw material prices.
Despite the increase in sales in the fourth quarter, Q4 operating profit was only slightly higher than in Q4 2004.
DSM Agro and DSM Energy saw their operating profits increase strongly due to higher selling prices, but DSM Fibre Intermediates' operating profit showed a strong decrease compared with Q4 2004 due to temporarily reduced production in Nanjing (China) and slightly lower margins. DSM Melamine's results remained under pressure and were slightly in the red.
Operating profit was lower than in 2004 due to higher costs. This relates in particular to costs recognized under IFRS 2 in connection with share-based payments and higher project costs. The higher result of the captive insurance company provided partial compensation for this.
Net profit increased from EUR 293 million in 2004 to EUR 527 million in 2005. Net earnings (after deduction of cumpref dividend) per ordinary share (after the stock split) increased from EUR 1.41 in 2004 to EUR 2.68 in 2005.
The Profit of associates decreased from EUR 9 million in 2004 to EUR -2 million in 2005, which was almost entirely due to the negative result posted by Methanor. Net profit excluding exceptional items increased byEUR 140 million (33 percent) and stood at EUR 563 million.
The net result from exceptional items for the full year was EUR 36 million negative. Exceptional items in the first nine months were the book profit on the sale of DSM Bakery Ingredients and the sale of land, a provision for the restructuring of the Linz site in Austria, an impairment of Methanor and a tax item.
The cash flow excluding exceptional items (net profit plus amortization and depreciation) for the full year 2005 amounted to EUR 1,066 million, up 15 percent from 2004. The increase was due mainly to the higher operating profit.
DSM creates innovative products and services that help improve the quality of life. DSM's products are used in a wide range of end markets and applications such as human and animal nutrition and health, cosmetics, pharmaceuticals, automotive and transport, coatings, housing and electrics & electronics (E&E).
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