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 LONDON, July 29 /PRNewswire/ -- Imperial Chemical Industries PLC of London today reported net income before exceptional items and discontinued operations of $81m for the second quarter of 1993, compared with $74m for the same quarter in 1992. Net income before exceptional items and discontinued operations per ADR was $.46 on sales of $3.2 billion, which compares with $.41 per ADR on sales of $2.9 billion in the second quarter of 1992.
 This brings net income before exceptional items and discontinued operations for the first half of 1993 to $134m, or $.75 per ADR, on sales of $6.3 billion, which compares with $120m, or $.68 per ADR, on sales of $5.8 billion, in the comparative 1992 period.
 Chairman's Comments:
 In announcing the results, Sir Denys Henderson, chairman of the ICI group, commented:
 "These results reflect a committed effort in the highly competitive market conditions resulting from the prolonged recession in Continental Europe and the slow and patchy recovery in the U.S. and U.K. The benefits of the group's self-help program have contributed significantly to the improved results, particularly in industrial chemicals.
 The continuing restructuring represented by the sale of the loss- making fibers business to Du Pont and the acquisition of its profitable acrylics business should have a beneficial effect on performance in the second half of the year.
 It is difficult to see any improved trend in the world economy over the next six months. Consumer and business confidence remain weak throughout the OECD area. Growth in the U.S. remains slow with little prospect of a worthwhile acceleration in the second half year. The U.K. economy continued to make some progress in the second quarter, but in Continental Europe, whilst the sharp falls in demand and activity appear to have ended, there is no evidence of any recovery and prices remain under pressure."
 Basis of Presentation:
 At an extraordinary general meeting on May 28, 1993 the shareholders of ICI approved a resolution to demerge Zeneca. The demerger was effective June 1, 1993 and Zeneca has operated as a separate, publicly listed company since that date.
 The results of Zeneca to the date of demerger together with the results of the European nylon fibers business sold on July 1, 1993 are reported as discontinued operations in the consolidated statement of income.
 Comparison with First Half of 1992-Continuing Operations
 Sales in the first half were 9 percent above the same period of 1992 due mainly to exchange rates as higher volumes (+2 percent) were offset by lower prices and by the net impact of divestments.
 Paints operating income was $75m compared to $92m in 1992 with strong growth in the Asia Pacific region being offset by the competitive market conditions in Europe and North America. In materials, profits improved by $3m to $20m reflecting the benefits of the continuing cost reduction program and improved trading performance in the acrylics business area. the results of materials exclude the fibers business disposed on July 1, 1993.
 Explosives operating income declined slightly due to competitive pressure in the U.S. and start-up costs of the ammonium nitrate plant in Australia. In industrial chemicals, operating income rose by $43m to $91m due primarily to vigorous cost control, improved volumes and favorable exchange rates. Trading conditions remained difficult with selling prices about 3 percent below last year's level.
 Regional business profit increased by $21m to $44m with an improved performance in Australia.
 Exceptional items in 1993 included a gain on the disposal of Paints Industrial and Powder Coatings businesses offset partly by a small loss on the sale of the Canadian Nitrogen Products business.
 Discontinued Operations:
 Discontinued operations comprise the results of the Zeneca Group businesses to the date of demerger (June 1, 1993), the operating results of the materials European nylon fibers business, which was sold with effect form July 1, 1993 and a $109m pre-tax loss on its disposal.
 The results of the group for the second quarter and first half of 1993 are summarized in the following table, together with comparative figures for 1992.
 Financial Summary
 (in millions of dollars)
 Three months Six months
 Period ended June 30, 1992 1993 1992 1993
 Continuing operations $2,871 $3,154 $5,768 $6,301
 Discontinued operations 1,795 1,383 3,510 3,264
 Total 4,666 4,537 9,278 9,565
 Net income:
 Continuing operations
 Net income before
 exceptional items 74 81 120 134
 Exceptional items after tax (17) 5 --- 5
 Discontinued operations 154 5 308 177
 Net income 211 91 428 316
 Net income per ADR ($ per ADR)
 Continuing operations
 Income before exceptional items .41 .46 .68 .75
 Exceptional items (.09) .02 --- .02
 Discontinued operations .86 .02 1.73 .99
 Total income per ADR 1.18 .50 2.41 1.76
 Results for all periods and other references have been expressed in U.S. dollars at a convenient exchange rate of $1.51 to the pound, the rate prevailing on June 30, 1993. Four ICI 1-pound ordinary shares are represented by each ADR.
 Results are based on U.K. accounting principles and are unaudited. Under U.S. Generally Accepted Accounting Principles (GAAP), net income for the half year ended June 30, 1993 is as follows:
 (In millions of dollars)
 Continuing Discontinued
 Operations Operations Total
 U.K. GAAP net income $ 139 $ 177 $ 316
 Adjustments to conform
 with U.S. GAAP (125) (20) (145)
 Cumulative adjustment at
 Jan. 1, 1993 upon adoption
 of SFAS 106 and SFAS 109 160 (8) 152
 U.S. GAAP net income 174 149 323
 The adjustments to conform with U.S. GAAP principally relate to pension expense, purchase accounting adjustments, deferred taxation, capitalization and amortization of interest and post retirement benefits other than pensions.
 For U.S. GAAP reporting, the group adopted in the first quarter of 1993 Statement of Financial Accounting Standards (SFAS) No. 106 "Employers' Accounting for Post-Retirement Benefits Other Than Pensions" and SFAS No. 109 "Accounting for Income Taxes."
 Interim Dividend:
 The board has declared an interim dividend of 10.5 pence per 1-pound ordinary share in respect of the year 1993 which carries with it an imputed tax credit of 2.625 pence. The 1993 interim dividend is unchanged from ICI's share (50 percent) of the group's 1992 interim dividend.
 The current income tax convention between the U.K. and the U.S. includes provisions which, in effect, allow many U.S. resident ADR holders to receive this dividend gross of U.K. advance corporation tax, less a withholding tax which may, subject to certain limitations, be offset against U.S. federal taxes on overseas income.
 For ADR holders able to benefit fully under these arrangements, the first interim dividend of 10.5 pence per ordinary share would represent $.79 per ADR using the conversion rate of 1-pound equals US$1.51.
 The record date for the 1993 first interim dividend payable to ICI ADR holders is Aug. 26, 1993 and payment will be made through Morgan Guaranty Trust Company on Oct. 12, 1993. ICI ADRs will trade ex- dividend on the New York Stock Exchange from Aug. 20, 1993.
 Supplementary Information Supporting U.S. Press Release
 Segment Information
 (in millions of dollars)
 Sales Operating income
 First Half, 1992 1993 1992 1993
 Continuing operations
 Paints $1,229 $1,293 $ 92 $ 75
 Materials 991 1,122 17 20
 Explosives 429 480 36 30
 Industrial chemicals 2,668 2,846 48 91
 Regional business 1,002 1,042 23 44
 Inter-class eliminations (A) (551) (482) 9 12
 Total 5,768 6,301 225 272
 Continuing operations --
 exceptional items --- --- (23) ---
 Total 5,768 6,301 202 272
 Discontinued operators
 Zeneca (1993 5 months only) 3,107 2,899 492 497
 Fibers 482 447 20 (32)
 Inter-class eliminations (A) (79) (82) --- ---
 Total 3,510 3,264 512 465
 Total 9,278 9,565 714 737
 (A)Includes turnover between continuing and discontinued operations.
 -0- 7/29/93
 /CONTACT: Vincent Leheny of Imperial Chemical Industries, in London, 071-798-5386/

CO: Imperial Chemical Industries PLC ST: New York IN: CHM SU: ERN

LG-MP -- NY037 -- 7485 07/29/93 11:51 EDT
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Publication:PR Newswire
Date:Jul 29, 1993

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