- DSM employs 22,000 people globally
- Job cuts mostly in Europe
- Profit improvement program announced
Dutch chemical and pharmaceutical maker Royal DSM (IW 1000/316) said Tuesday its net profit slumped 90% year-on-year in the second quarter as it announced a cost-reduction program and job cuts.
Net profit dropped to 41 million euros (US$51 million) from 392 million euros over the same period last year, DSM said in a statement.
DSM said its second-quarter profits -- which jumped 162% last year -- included restructuring costs and impairments worth 73 million euros.
The results fell well short of analyst forecasts for 123.1 million euros as polled by Dow Jones Newswires.
DSM on Monday announced a Profit Improvement Program to focus on cost reduction and "efficiency improvements" being implemented over the next year-and-a-half to generate savings of some 150 million euros.
"As a result of this program DSM expects the global headcount to be reduced by approximately 1,000 positions," DSM said in its statement.
Chief Executive Feike Sijbesma said of the 1,000 jobs, mainly in Europe, some 400 were in the Netherlands.
"The world economy developed less positively than expected, mainly due to the continuing eurozone challenges, prolonging weak consumer sentiment and ... recession in parts of Europe," DSM said.
Sijbesma said the outlook for the second half of 2012 remained uncertain "due in part to Europe's inability to find an effective and sustainable solution to the financial challenges facing the eurozone."
Second-quarter net sales held steady at 2.27 billion euros.
DSM employs some 22,000 people globally and manufactures products as diverse as nutritional supplements, including a new way of fortifying sugar with Vitamin A, to pharmaceuticals, electronics and paints.
Copyright Agence France-Presse, 2012