ICI reports profits, says pension deficit is touching 1.5 bn pounds |
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Fri, 10 Feb 2006 10:05
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LONDON: Paints and chemicals major ICI Plc. posted pre-tax profit of 444 million pounds for the year ended December 2005, broadly satisfying analysts' expectations. It is marginally up from 422 million pounds recorded in fiscal 2004. Sales during the year too went up to 5.8 billion pounds from 5.6 billion pounds.
The company had a bad year with raw material prices going up and demand in European markets declining.
Its net debt came down by a further 244 million pounds to 745 million pounds.
ICI is planning to cut nearly 2,500 jobs and reduce costs by 140 million pounds a year as part of a four-year efficiency drive.
The company revealed that its overall pension fund deficit has reached 1.5 billion pounds. An actuarial review indicated that the deficit in its main U.K. pension scheme had risen by 187 million pounds to 657 million pounds.
The scheme, which has been closed to new employees, has some 59,000 pensioners, 14,000 deferred members and 1,200 active members. To cover the shortfall, it is increasing payments into the fund from 62 million pounds to 122 million pounds a year from 2006 to 2010 planning to eliminate the deficit altogether by 2015.
The company said when international accounting rules are applied to the pension fund, the deficit across the company's funded and unfunded schemes rose from 1 billion pounds to 1.5 billion pounds at the end of last year.
The company also announced that it is planning to sell its Uniqema division, which makes fatty acids used in manufacturing detergents and personal healthcare products. The company had acquired the business as part of its 4.9 billion pound deal with Unilever. The sale is likely to fetch between 200 million pounds to 400 million pounds.
Chief executive John McAdam said the company made good progress in 2005, marked by a steady performance in Asia, although the markets were weak in Europe.
He said Uniqema is being sold because it required more investment. The company would prefer to invest in other areas.
ICI shares fell 4 per cent to close at 339.5 pence.
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