DSM given an overall boost

28/07/05 DSM has posted a total Operating profit of EUR 217 million for the first half of 2005, up 43% from the second quarter of 2004, due in particular to higher margins, lower costs and the contribution from DSM NeoResins (acquired in February 2005). The Net profit from ordinary activities excluding exceptional items was EUR 147 million, which is 28% more than in Q2 2004 (EUR 115 million). Net profit amounted to EUR 133 million, up 16% from Q2 2004 (EUR 115 million).

The activities of DSM Bakery Ingredients were sold to Gilde Investment Management with effect from 30 June. The remaining part of this business group, the Rymco joint venture in South Africa, is expected to be transferred to the joint venture partner in September.

Peter Elverding, Chairman of the Managing Board, gave the following comment: "I am satisfied with DSM's profit for the second quarter, in which our business developed well. The strong performances in Nutritional Products, Performance Materials and Industrial Chemicals stand out, but the visible improvement in Life Science Products also contributed.

"Across the board, we saw the positive effects of better margins and lower fixed costs, while sales volumes also increased compared with Q1 2005.
"For the year as a whole I expect our financial results from ordinary activities to be substantially higher than in 2004."

At EUR 2.0 billion, sales from ongoing activities (that is, excluding DSM Bakery Ingredients) were up 9% from the second quarter of last year. Selling prices were on average 8% higher than in Q2 2004. Organic volume growth amounted to -1%. The acquisition of DSM NeoResins had an effect of +4%. Lower exchange rates against the euro, in particular for the U.S. dollar, had an effect of -2%.

Compared with Q1 2005, organic volume growth amounted to 3%.