German chemicals and pharmaceuticals giant Bayer, maker of Aspirin, said yesterday it was optimistic about business this year after meeting key targets in 2013.

“We met important business objectives in our anniversary year,” chief executive Marijn Dekkers told the group’s annual earnings news conference.

Last year, Bayer’s net profit rose by 32.7% to 3.189bn euros ($4.4bn).

Underlying or operating profit, as measured by earnings before interest, tax, depreciation and amortisation (EBITDA), advanced by 1.5% to 8.401bn euros. And revenues were up 1.0% at 40.157bn euros, “a new record in our company’s 150-year history,” Dekkers said.

Growth was driven primarily by the group’s so-called “life sciences” businesses, healthcare and agro-chemicals, it explained.

“Healthcare achieved pleasing gains with its recently launched pharmaceutical products, while crop science was very successful in a positive market environment,” Bayer said.

“Overall, we achieved our operational targets in the life science businesses despite substantial negative currency effects.”

Looking ahead, Bayer said it expects sales to increase by about 5.0% to 41-42bn euros in 2014 and operating profit was projected to rise by “a low- to mid-single-digit percentage”, it said.

 

Banco Popolare

Italy’s No 4 lender Banco Popolare booked 1.7bn euros ($2.3bn) of charges to cover bad loans in 2013, setting the tone for the country’s banks as they clean their books ahead of an industry health check by European regulators.

The writedowns, of which 1bn euros were taken in the fourth quarter, led to a full-year net loss of 606mn euros - the third straight annual loss for Banco Popolare - and come ahead of results from other Italian banks next month.

Bad loans have become the biggest problem for Italian banks as the euro zone’s third-largest economy struggles to emerge from its longest post-war recession. Banco Popolare said the Bank of Italy, which has been running inspections at Italy’s top 20 banks, had recommended a conservative stance on bad debts so that lenders get a clean bill of health when European regulators publish the results of their sector-wide review later this year.

The bank unveiled a business plan targeting net profit of 609mn euros in 2016 and 787mn euros in 2018, and a core capital ratio of 11.5% in 2016.

Yet, in a sign that bad debts will remain a concern for some time to come despite a fledgling economic recovery, Banco Popolare said it expected loan-loss charges to total 700mn euros in 2016 and 662mn euros in 2018.

It also said it had signed confidentiality agreements with three players interested in buying two of its bad loan portfolios worth a combined 1.5bn euros after write-offs.

 

IAG

British Airways-owner International Airlines Group said it was on track to more than double profit over the next two years, as a turnaround at its Iberia unit gains traction and it drives down costs across its business.

IAG swung to a profit last year, boosted by a strong performance at British Airways and on revenue from newly acquired low-cost carrier Vueling, which competes with Ryanair and easyJet in European short-haul.

Operating profit was 770mn euros ($1bn) before exceptional items last year, beating an analysts’ consensus forecast of 765mn from a 23mn loss in 2012. IAG’s target, which it raised by 12.5% in November, is to lift operating profit to 1.8bn euros for 2015, through cost cuts at BA, Iberia’s recovery and Vueling growth.

Reconfirming its 2015 profit target, IAG said it expected to make steady progress this year by cutting costs. “They’re still guiding to a 2015 figure of 1.8bn euros, so they obviously have a lot of work to do this year. In that context with the stock having doubled, and these numbers only being in line, you’re going to get some profit taking,” Cantor analyst Robin Byde said.

Iberia, which has dragged on group earnings since the merger with BA in 2011, narrowed its operating loss by 185mn euros to 166mn euros in the year.

 

Synthomer

British chemical maker Synthomer’s full-year underlying profit fell nearly 5%, weighed down by anaemic demand across European construction markets.

The company, which supplies specialty emulsion polymers used in construction, textiles, paper and latex gloves, said it started 2014 with a slight drop in unit cash margins from the 2013 average at its Europe and North America (ENA) business.

Synthomer shares fell as much as 2.2% in early trading on Friday.

Sales at ENA, which accounts for more than 70% of Synthomer’s revenue, fell about 6% to 744.8mn pounds ($1.24bn) in the year ended Dec. 31.

Underlying pretax profit fell to 90.1mn pounds ($150.21mn) from 94.6mn pounds. Revenue decreased by more than 5% to 1.05bn pounds.

Synthomer said underlying operating profit at its Asia business jumped 21%, driven by a continued recovery at the company’s nitrile business there.

 

Erste

Austrian lender Erste Group aims to keep operating profit roughly steady this year as core markets in Austria and central and eastern Europe stabilise and loans to customers stay flat, it said.

Central and eastern Europe’s third-biggest lender proposed halving its dividend to 0.2 euros per share after 2013 net profit slumped 87% to 61mn euros ($84mn). Erste flagged its net profit figure on February 11.

It posted a fourth-quarter loss of 369mn euros as risk provisions jumped nearly 18% from the third quarter, mainly for the large corporate and commercial real estate business and at its savings banks. Its non-performing loan (NPL) ratio was stable in the second half but still rose to 9.6% at the year-end from 9.2% a year earlier. Its NPL coverage ratio improved to 63.1% from 62.6%.

Erste expected a moderate economic pickup in the region this year while interest rates stay low.

Writedowns and tax effects hit the bottom line in 2013, and its tax burden again poses difficulties this year, it said.

A decline in banking taxes from 311mn euros in 2013 to about 270mn in 2014 should benefit net profit.

Erste, which sold its Ukrainian business last year, said its core tier 1 capital ratio under Basel 2.5 rules improved to 11.4% of risk weighted assets. Its common equity tier 1 ratio under new Basel 3 standards stood at 10.8%.

 

Hutchison Whampoa

Li Ka-shing’s Hutchison Whampoa conglomerate said its net profit for 2013 was up 20% from the previous year, despite challenging global markets.

The blue-chip group said net profit was HK$31.11bn ($4.01bn) for the year ended December 31, 2013, compared to HK$25.89bn in 2012.

Profits were fuelled by growth in areas including its port, hotel and property divisions, the company said in a statement filed to the Hong Kong stock exchange.

The group’s ports division generated HK$34.12bn revenue, up four% compared to last year.

Its property and hotel division saw a 22% increase in revenue from 2012, while revenue from its telecommunications groups grew by six% in Europe and earnings before interest, tax, depreciation and amortisation grew 38%.

Revenue for the group grew four% from the previous year reaching HK$412.933bn.

The group was also lifted by strength in its European retail and telecoms businesses.

For the first time, Hutchison Whampoa’s operating profits from Europe surpassed the combined profits from its Hong Kong base and mainland China, Dow Jones newswires reported.

 

Virgin Australia

Australian budget carrier Virgin slumped to a first-half net loss of Aus$83.7mn (US$75mn), blaming intense competition, subdued demand and economic uncertainties.

The results follow major domestic rival Qantas on Thursday announcing a Aus$235mn loss over the same six month period to December 31. To cope, Qantas will axe 5,000 jobs and defer aircraft deliveries. There was no similar drastic action by Virgin Australia, the country’s second-biggest airline, despite a significant hit to its bottom line after a Aus$23mn profit in the same period last year.

“The result reflects the tough trading conditions across the entire industry for the first half of financial year 2014,” said chief executive John Borghetti.

The airline said the country’s controversial tax—a levy on each tonne of carbon pollution—added Aus$27mn to its costs. Its underlying pre-tax loss—the airline’s preferred measure of financial performance—was Aus$49.7mn.

Virgin, which is majority-owned by state-backed Singapore Airlines, Air New Zealand and Etihad, said that while revenue jumped 6.4% to Aus$2.2bn, costs increased 4.5%.

 

Berendsen

Berendsen, which rents and launders textile products, said full-year pretax profit rose 23% due largely to higher operating margins at its core Workwear unit.

The company, which counts Coca-Cola Europe, Tesco and Airbus among its customers, said pretax profit rose to 112.4mn pounds ($187.4mn) for the year ended Dec. 31 from 91.7mn pounds a year earlier. Revenue rose 7% to 1.05bn pounds.

Analysts on average were expecting pretax profit of 133.27mn pounds on revenue of 1.05bn pounds, according to Thomson Reuters I/B/E/S.

Results for the year earlier were restated following the adoption of new accounting standards, Berendsen said.

 

Gazprom Neft

OAO Gazprom Neft expects free cash flow, or the income it has left after spending on investment, to stay positive even as the oil arm of Russia’s natural gas exporter plans to use $16bn over two years to expand.

The company gained from an unexpected $2bn in free cash flow in 2013 on higher-than-forecast oil prices and lower spending, Chief Financial Officer Alexey Yankevich said. Free cash flow is typically viewed as money that can be distributed to investors without affecting funding for business operations.

Gazprom Neft is investing 574bn roubles ($15.9bn) under a plan to boost output by about 60% to 100mn metric tons of oil equivalent in 2020, with new fields in Iraq, the Arctic offshore and Siberia.

Gazprom Neft net income in 2013 advanced 0.9% to 177.9bn roubles, according to a statement on the company website yesterday. Sales fell 1% to 1.5tn roubles.Oil and gas output rose 4.2% to an average of 1.25mn barrels of oil equivalent a day in 2013.