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Lonza first-half profit beats estimates, prompting asset review

[FRANKFURT] Lonza Group, the world's largest custom maker of drug-ingredients, reported first-half profit that beat analyst estimates and said it will review its portfolio to boost profitability further.

So-called core earnings before interest and tax gained 7.9 per cent to 260 million Swiss francs (S$370 million), the Basel, Switzerland-based company said Wednesday. Analysts had predicted 246 million francs. Sales in the first half rose 5.8 per cent to 1.9 billion francs.

Chief executive officer Richard Ridinger, who has put the company through a three-year overhaul including plant closures and disposals, said on Wednesday that the company may consolidate some activities at certain sites. Lonza will concentrate on more profitable products and services as well as improving productivity, the CEO said.

"This steady improvement gives us the stability to look at further optimization of our portfolio and our asset footprint, including consolidation of our expertise into specific sites," Mr Ridinger said in the statement.

Lonza reiterated a full-year forecast for flat sales in reported currencies and core Ebit of at least 5 per cent at constant exchange rates.