The Sulzer pro-forma financial statements are based on actual business conditions after the Sulzer Medica spin-off of July 10, 2001. The auditors recommend, however, to disclose as soon as available in addition the consolidated financial statements that include Sulzer Medica for the first six months of 2001. Sulzer Medica released its half-year closing today. Based on these figures the following are key data for the fully consolidated income statement of Sulzer:
|
Jan.–Jun. 2001 (million CHF) |
|
|
|
|
| |
Sulzer* |
Sulzer Medica |
Eliminations |
Total |
|
Net sales |
1873 |
723 |
–9 |
2587 |
|
Operating income before goodwill amortization and exceptional items |
33 |
119 |
|
152 |
|
Operating income |
161 |
–805 |
|
–644 |
|
Net income/loss |
120 |
–608 |
155** |
–333 |
| |
|
|
|
|
|
* according to pro-forma accounts released on 23.8.01 |
|
|
|
** minority interest (CHF 158 million) |
|
|
Sulzer Medica suffered a heavy loss due to the high provisions set aside to cover hip joint and tibia plate recall costs. In accordance with Sulzer’s participation prior to the spin-off, 74% of this net loss is booked against the Sulzer consolidated income statement for January to June 2001. This accounting loss has no effect on the future development of Sulzer, however. Upon spin-off the loss was offset against equity when assets and liabilities of Sulzer Medica were eliminated from the consolidated accounts. The surviving balance sheet of Sulzer, as published in the intermediate report of August, remains unchanged and is healthy. Future dividend payouts are likewise unaffected, since they primarily depend on the results of the industrial activities.
The complete consolidated income statement will be available in the near future and will be part of a shareholder letter. Sulzer was not involved in closing the Sulzer Medica mid-year accounts. The data was processed as received and is not audited. Sulzer therefore waives responsibility for any of the Sulzer Medica figures.
Apart from a small number of remaining services, relations between Sulzer and Sulzer Medica are now limited to residual post spin-off claims by Sulzer totalling around CHF 10 million net, and in particular the obligation of Sulzer Medica Ltd to indemnify Sulzer Ltd from and against all costs (including legal expenses) in connection with the product liability claims. Sulzer and its attorneys believe that Sulzer Ltd cannot be held liable for any claims arising out of the Sulzer Medica recall. The 4.4% of Sulzer Medica shares still held by Sulzer will be sold when market conditions are more favourable. |