Novartis profits slide 14pc

The New Age

Swiss pharmaceutical giant Novartis on Thursday posted a 14-per cent slump in first quarter net profit, hurt by unfavourable currency movements and a major acquisition.
The group’s net profit fell to $1.975 billion as the $40-billion takeover of the world’s biggest eye care company, Alcon, sapped its liquidity and increased its financing costs.
Sales also slipped two per cent to $9.7 billion, although it was up 8.0 per cent in local currencies, underlining the impact of foreign exchange rates.
Daniel Vasella, the group’s chairman and chief executive saw however an ‘opportunity’ in the turmoil.
‘The uncertain economy and currency market volatility create an opportunity to continue to enhance productivity and manage costs,’ he said.
The group said it expected sales to grow at about 5.0 per cent, although it warned that unfavourable exchange rates could cut any underlying improvements for the year.
Analysts, who had expected profits of about $1.85 billion, hailed the forecast-beating income, with Bank Helvea recommending investors to buy the stock.