Lonza 'pleased' with first half results

By Shane Starling

- Last updated on GMT

Related tags Nutrition

Swiss supplier Lonza has turned in a healthy first half performance with its Life Science Ingredients division that includes L-carnitine, vitamin K and nicotinates performing above expectation.

Overall Lonza - a supplier to the pharma, health care and lidfe sciences industries - notched a sales increase of 13 per cent to CHF1463 (€899m) with EBIT (earnings before interest and tax) increasing 15.2 percent to CHF235 (€144m).

The company forecast mid-teens EBIT returns until 2013.

"We are pleased with our execution of programs and projects in this period,"​ said chief executive officer, Stefan Borgas. "Despite some turbulence in the general economy, we had a strong financial performance and continued to make significant progress in the execution of our long term growth plans."

Nutritional ingredients

The Life Science Ingredients division that includes nutritional ingredients, saw revenue jump 3.8 per cent from CHF564 (€346m) to CHF586 (€360m) compared to the equivalent period in 2007.

EBIT increased from CHF79 (€49m) to CHF87 (€53m) over the same period.

Lonza noted strong demand for niacinates (B3), especially for food applications as well as feed applications and despite the fact it had increased the price of niacin offerings by about 15 per cent at the beginning of the year.

However pharmaceutical-grade niacin failed to meet expectations.

Across the board, raw material price increases as well as the decline in the value of the US currency put upward pressure on prices.

A scheduled maintenance shut-down at its Visp plant in Switzerland reduced output, albeit temporarily.

Supply into the food supplements area was buoyant with Lonza's L-carnitine ingredient, Carnipure, performing well.

Carnipure also saw good results in pharma and functional food applications. The ingredient had been incorporated into a Coca Cola Japan sports beverage called Aquarius Zero.

However price pressures from suppliers in the Asian region were prevalent. The animal feed and pet food sectors were also performing well for L-carnitine.

However the prebiotic ingredients - FiberAid and ImmunEnhancer - reported lower than expected sales.

Lonza's DHA (docosahexaenoic acid) omega-3 ingredient, DHAid, performed to expectation, with the landscape clearing following the resolution of patent disputes in the US and Germany.

It said new Asian markets were being developed for the ingredient.

The acquisition of Canadian firm S.A.M. Electron Technologies had also allowed it to develop its vitamin K3 operation especially in the area of animal feed, as new processing technologies come onboard.

It had begun manufacturing chromium-free vitamin K there.

This new facility, coupled with the Visp plant returning to full-scale production​were responsible for a significant "debottleknecking" ​effect, the company said.

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