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RHONE-POULENC REPORTS 1992 RESULTS; EARNINGS PER SHARE UP 25 PERCENT

 -- Sales down 2.5 percent to FF81.7 billion
 -- Operating income up 8.1 percent to FF6.8 billion
 -- Net income before preferred remuneration up 9 percent to FF2.2 billion
 -- Net earnings per share up 24.7 percent to FF25.61
 PARIS, Feb. 17 /PRNewswire/ -- Rhone-Poulenc today released the following:
 As a result of enhanced productivity and a more balanced business portfolio, Rhone-Poulenc enjoyed further earnings growth in 1992 despite the unfavorable international economic environment. In particular, earnings per share again rose over the year.
 Consolidated net sales declined by 2.5 percent to 81.709 billion French francs compared to 83.817 billion francs in 1991. Of this result, higher volumes accounted for +2 percent, changes in the structure -0.9 percent, the effects of currency translations -3.1 percent, and the price decreases -0.5 percent. On a comparative basis of currency translations and consolidations, consolidated sales rose by 1.5 percent.
 Operating income increased by 8.1 percent over the year, to 6.779 billion francs from 6.272 billion francs in 1991. This growth was fueled by excellent results from the health sector (Rhone-Poulenc Rorer and Institut Merieux in particular) and the specialty chemicals sector, which boosted its operating income by nearly 500 million francs in a depresnce, which worsened substantially in the second half. The agro sector was impacted negatively by the effects of the reform of the EC's Common Agricultural Policy.
 Net income before preferred remuneration amounted to 2.184 billion francs, a 9 percent increase from 2.004 billion francs in 1991.
 Earnings per share rose 25 percent to 25.61 francs, compared to 20.53 francs in 1991.
 These results were achieved even as the group maintained a substantial research and development commitment, which rose to 6.0 billion francs from 5.7 billion francs in 1991.
 The group made non-strategic divestitures of 4.4 billion francs(A), exceeding the target set at the beginning of the year.
 As a result of better cash management, Rhone-Poulenc generated free cash flow(B) in 1992 after recording negative free cash flow of 3 billion francs in 1990 and 1991. Interest expense-net declined from 3.454 billion francs in 1991 to 3.208 billion francs in 1992.
 The group will pursue its commitment to innovation this year, with new product launchings scheduled in all sectors, as well as to its ongoing productivity improvement and overhead reduction programs. It will continue to work on refocusing its core businesses and paying down debt with the goal of achieving a net debt to equity and other funds ratio of 0.5 by the end of 1994.
 Rhone-Poulenc does not foresee an economic upturn this year. The current situation is difficult to evaluate. The most recent information suggests that operating income in the first quarter of 1993 should follow the trend established in the last quarter of 1992 and therefore will be in decline as compared to the relatively good results recorded in the first quarter of 1992.
 In 1993 as a whole, the group should enjoy continued growth in operating income and earnings per share, led by the health and specialty chemicals sectors. This estimate does not account for the possibility of lower interest rates in Europe.
 Commenting on these results, Rhone-Poulenc Chairman and Chief Executive Officer Jean-Rene Fourtou said:
 "The success of the January public share offer, which was over- subscribed more than four and a half times, confirmed the international financial community's confidence in Rhone-Poulenc's growth potential. The group should be able to maintain its momentum despite the poor economy thanks to its more balanced business portfolio, enhanced productivity, strong earnings growth in the Health Division (particularly from Rhone-Poulenc Rorer), and new products. We will be ready to reap the full benefits of economic recovery, when it comes, with the leverage provided by the chemical business. Continued improvement in free cash flow and further divestment of non-strategic assets will help us to pay down our debt and reduce our interest expense."
 (A) -- The sale of PPC (Potasses et Produits Chimiques), which was concluded in January, will be booked in 1993.
 (B) -- Free cash flow after financing of acquisitions, working capital requirements, tax, interest expenses, dividends and preferred remunerations (excluding divestitures and acquisitions).
 RHONE-POULENC
 Summary Consolidated Income Statements(A)
 (FF millions)
 1992 1991 Variation
 (Percent)
 Net sales 81,709 83,817 (2.5)
 Amortization of intangible assets (962) (952)
 Depreciation 5,585 (5,526)
 Provision for restructuring (155) (495)
 Operating income 6,779 6,272 8.1
 Equity in net earnings of
 affiliated companies (189) (153)
 Interest expense - net (3,208) (3,454)
 Gains on sales of assets - net 872 1,190
 Other income (expense) - net 377 571
 Income before taxes and minority
 interests 4,631 4,426 4.6
 Income taxes (1,157) (1,365)
 Minority interests (1,290) (1,426)
 Net income before cumulative
 effect of a change in accounting
 principle 2,184 1,635 33.6
 Cumulative effect on Jan. 1, 1991,
 of a change in accounting principle -- 389
 Net income before preferred
 remunerations 2,184 2,004 9.0
 Preferred remunerations (668) (777)
 Net income available for distribution
 to common shareholders 1,516 1,227 23.6
 Net income per share 25.61 20.53 24.7
 Net income per P.I.C. 30.61 25.53 19.9
 Average number of shares
 outstanding 45,183,250 40,169,310
 Average number of P.I.C.
 outstanding 11,720,675 11,720,675
 Summary Consolidated Balance Sheet (After Distribution)(A)
 (FF millions)
 Dec. 31 1992 1991
 Assets
 Receivables and other current assets 25,798 27,015
 Inventories 15,273 15,727
 Investments and other assets 14,062 11,733
 Fixed assets 57,218 58,818
 Total assets 112,351 113,293
 Liabilities
 Payables and other current liabilities 34,254 40,738
 Long-term debt 25,294 21,271
 Provisions and other long-term liabilities 10,755 9,754
 Equity plus other funds 42,048 41,530
 Total liabilities 112,351 113,293
 Debt to equity ratio 0.8 0.8
 (A) -- Audited accounts.
 -0- 2/17/93
 /CONTACT: Akvind Sood of Rhone-Poulenc, 908-821-3487/


CO: Rhone-Poulenc ST: IN: HEA SU: ERN

CK-OS -- NY021 -- 7238 02/17/93 10:46 EST
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Date:Feb 17, 1993
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