Aug 6, 2008
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Henkel second-quarter profit drops but outlook is upbeat

Aug 6, 2008

FRANKFURT, Aug 6, 2008 (AFP) - The German chemicals group Henkel posted a sharp drop in second-quarter net profit on Wednesday, August 6th, but raised slightly its full-year growth outlook.


Profit fell to 38 million euros (58.8 million dollars) in the three month period, from 234 million in the second quarter of 2007, a statement said.

Analysts polled by Dow Jones Newswires had expected net profit of around 65 million euros.

The maker of Persil washing powder, Fa shower gel and Duck Tape has begun a broad restructuring programme under the guidance of new Danish boss Kasper Rorsted, and plans to cut 3,000 jobs have weighed on its books.

Second-quarter sales climbed by 11.4 percent to 3.7 billion euros, in line with forecasts.

Operating profit excluding one-off items linked to the restructuring rose by 7.8 percent to 372 million euros.

The figures included for the first time results from the US-based National Starch and Chemical Company, which was acquired in April and made Henkel the world's leading producer of adhesives.

Despite an unfavourable international environment and rising costs of raw materials, Henkel raised slightly its target for organic sales growth, now aiming for a figure between three and five percent.

It said that growth of operating profit, excluding restructuring charges and one-time gains and charges, would be close to but below 15 percent, based on a 2007 figure of 1.37 billion euros.

The group appeared to fare better than some rivals, such as L'Oreal of France which has lowered its sales outlook, and the Dutch firm Unilever, which posted a sharp drop in quarterly results.

On Tuesday, German rival Beiersdorf, the maker of Nivea creams and Tesa glues, also turned in disappointing second-quarter results.

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