With its companies combined in EMS-CHEMIE HOLDING AG, the EMS Group with its worldwide activities conducted in the fields of Performance Polymers, Fine Chemicals and Engineering was unable to match the performance of the same 1998 period in the first 4 months of the current year. Consolidated net sales of CHF 362 million are 0,8 % below the previous year (CHF 365 million), operating cash flow declined by 5,9 % to CHF 84 million (CHF 89 million), and net operating income dropped 8,2 % to CHF 64 million (CHF 70 million).
This result is essentially attributable to contrary developments: on the one hand, the planned discontinuation of low-margin product lines in the Performance Polymers field caused the anticipated drop in sales and income; on the other hand, the first-time consolidation of Karl Fischer Industrieanlagen GmbH in Berlin and of PYRMO GmbH in Bad Pyrmont (Germany) - acquired 1998 - had a boosting effect on sales. On the basis of an unchanged scope of consolidation, sales would have declined by 4,2 %. The decrease of sales and income in the Fine Chemicals field is unexpected, and must be seen as a consequence of the less than successful market launch of pharma products by EMS customers for which EMS-DOTTIKON supplies intermediates. We will most probably not be able to offset these shortfalls with other products this year, although appropriate measures have been initiated.
The first 4 months were characterised by somewhat slack business in Europe, a continuingly strong US economy and an improved sales situation in Asia. In particular Engineering subsidiary INVENTA-FISCHER AG, which last year suffered a substantial drop in sales and income caused by the Asian crisis, reports a significant rise in orders which will ensure full capacity utilisation up to the middle of 2000. This increase in orders placed will have a positive impact on income in the second half of this year.
