Wednesday July 29, 08:52 AM
Sanofi reports profits rise, seeks big cost cuts
PARIS (AFP) - French pharmaceutical group Sanofi Aventis announced on Wednesday a two-billion-euro (2.84 billion dollars) cost cutting programme and higher earnings targets for this year.
It said second-quarter net profit rose by 4.9 percent from the figure 12 months earlier to 1.06 billion euros but on an adjusted basis, excluding the effect of exceptional items, earnings rose by 29.4 percent to 2.27 billion euros.
This was well above the average forecast by analysts as polled by Dow Jones Newswires for 2.08 billion euros.
Sales in the three months to June rose by 11.2 percent to 7.44 billion euros, beating forecasts for 7.29 billion euros.
Citing this "good performance," Sanofi (Paris: FR0000120578 - news) said it was increasing its earnings growth forecast on an unadjusted basis to 10 percent for 2009 from its previous estimate of around seven percent.
Sanofi said the cost-cutting programme would target savings of two billion euros over the period 2008 to 2013, with eight research centres -- mainly in France and Britain -- set to close.
The company has previously announced plans to cut 1,300 jobs through voluntary departures but would not comment on the prospect of further losses resulting from the new cost-cutting programme.
The savings will come equally from research, production, support functions and sales, it said.
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