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Royal DSM Posts 4Q Loss

Dutch chemicals maker reported $81 million loss for fourth quarter, as a write down on value of pharmaceutical ingredients subsidiary offset increase in profitability.

AMSTERDAM (AP) -- Royal DSM NV, the Dutch chemicals maker, Wednesday reported a net loss for the fourth quarter, as a write down on the value of a pharmaceutical ingredients subsidiary offset an increase in profitability.

In an unusual move, the company also said it was linking executive bonuses to environmental issues.

Net loss was euro60 million ($81 million), compared to a net profit of euro42 million in the same period a year ago. Sales fell 3.3 percent to euro2.02 billion. The company took a euro154 million charge to write down the value of its Catalytica arm.

DSM said that operating profit rose 15 percent to euro142 million.

"After a difficult first half year, we delivered improved results in the second half of the year as our materials sciences businesses started to recover," said Chief Executive Feike Sijbesma in a statement.

After reviewing its executive pay policies, DSM said it would limit bonuses to 100 percent of base salary. Bonuses will be half based on financial targets and half on targets "related to sustainability, such as the introduction of green products, energy consumption reduction, the reduction of emissions of greenhouse gases and the engagement of the company's work force," the company said.

Sijbesma's base salary was frozen at euro766,000 for the second year in a row, which the company said was in line with its "cautious remuneration policy in view of the current economic circumstances."

DSM said that growth had returned to emerging markets, notably China, while the recovery in Europe and the U.S. was "modest and fragile."

The increase in operating profit came as the company's businesses in high-performance materials, such as those used in bullet proof vests, swung from loss to profit.

DSM, which makes chemicals used in pharmaceuticals, high-performance materials and nutritional ingredients, said that it had benefited from the increase in sales of sterile vaccine due to the Swine Flu pandemic.

It said its nutrition arm, its largest, grew sales 1.8 percent to euro716 million. Operating profit at the arm fell 12 percent to euro137 million, due to one-time gains a year earlier.

Shares fell 2.4 percent to euro31.97 in early Amsterdam trading.

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