Restructuring costs reduce Roche profits

Global restructuring costs ate into profits as Swiss drugs giant Roche on Wednesday recorded a 16 percent drop in net income to 9.5 billion francs ($10.5 billion) for 2014.

The Basel-based pharmaceutical firm said sales increased by one percent to 47.5 billion francs, an increase of five percent in constant exchange rates, reflecting the strength of the Swiss currency against the yen, the dollar and several Latin American currencies.

The company described its results as “solid overall”.

"It is testament to the strength of our portfolio and the commitment of our employees that we were able to achieve 11 pharmaceutical product approvals and launch 14 new diagnostic instruments and tests," CEO Severin Schwan said in a letter to shareholders.

Analysts polled by the AWP financial news agency had forecast a profit of between 11.2 and 11.5 billion Swiss francs and a turnover of between 46.6 and 47.3 billion francs.
Roche said it had restructured part of its debt in 2014 to take advantage of the low interest environment but this resulted in a one-time loss of 279 million Swiss francs.

Nevertheless the restructuring should lead to higher savings in the long term, it said.
"In total, these costs and impairments resulted, after taxes, in a ten percent lower net income," the company said.
Pharmaceuticals division sales were up one percent in terms of Swiss francs, driven by oncology, including a 20 percent increase in demand in HER2-positive breast cancer medicines and a six percent rise in the sales of Avastin.
A flu epidemic in the United States at the end of last year helped boost sales of drug Tamiflu, which surged 54 percent.
Roche's board is proposing a three percent increase in its dividend to eight francs, which would mark the 28th consecutive year of dividend growth.

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