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| Chemical company reshapes to fight loss |
| 2008-08-20
source:Shanghai Daily |
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SWISS chemical maker Ciba has reported a first-half net loss of 569 million Swiss francs (US$518.9 million) after a writedown, and said it was considering selling two businesses.
Ciba's loss, compared with a profit of 103 million francs in the year-ago period, was due to a goodwill impairment of 595 million francs in its water and paper treatment unit, which it is considering selling as well as its publication inks unit.
"Absolute shocker, even worse than Q1 profit warning," a trader said, adding that the results were so bad that Ciba's independence would be called into question.
The specialty chemicals company, which like local rival Clariant has been hit hard by high raw materials costs and Asian competition, said it believed its previous full-year forecast was still achievable.
"Ciba is in a tough situation," said Vontobel analyst Damien Weyermann. "Ciba is taking corrective restructuring measures so as to restore both profitability and sustainable value creation, but the turnaround will take time."
Ciba Chief Executive Brendan Cummins said the company is taking "significant action to reshape the portfolio and focus on areas of technological core strength in plastics, coatings and water."
Ciba shares fell 13.2 percent to 27.70 francs yesterday.
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