Ciba Specialty Chemicals Holding on Tuesday reported fourth-quarter net profit of 84 million Swiss francs ($67.2 million; 51.9 million euros) and said Chief Executive Armin Meyer will step down at the start of next year.
Results for the October-December period contrasted with a loss of 476 million francs ($381 million; 293 million euros) in the same period of 2005.
The Swiss maker of specialty chemicals said profits were driven by increased shipments and cost savings from its restructuring plan. Fourth-quarter sales were 1.55 billion francs ($1.24 billion; 955 million euros), up slightly from 1.54 billion francs in 2005.
The company "made further progress in 2006," Meyer said. "We achieved solid sales growth, as well as underlying improvements in margins and a higher free cash flow."
The fourth quarter helped Ciba narrow losses for last year to 41 million francs ($32.8 million; 25.3 million euros), an improvement from a 256 million franc loss in 2005. Profits last year were affected by the sale of its textile effects business at below book value, but the annual loss was less than predicted by analysts.
Sales rose 5% last year to 6.35 billion francs ($5.08 billion; 3.91 billion euros), from 6.04 billion francs in 2005, Ciba said.
The company, which in 2006 started its fourth restructuring of the decade, said Meyer would be replaced as CEO by chief operating officer Brendan Cummins next year.
The board also proposed a dividend of 3 francs ($2.40; 1.85 euros) per share for last year.
Ciba said business conditions for 2007 would likely be similar to those last year, with utility and raw material costs remaining high but stable. Ciba is assuming an oil price of $60 (46.30 euros) a barrel this year.
Michael Jacobi, chief financial officer, told Dow Jones Newswires that the company had strong sales in January, particularly in Asia and Europe, and reiterated company guidance of 3-4% sales growth for the year. Ciba expects net operating income to increase 1% this year before restructuring, impairment and other charges.
Ciba shares were up 0.4% at 83 francs ($66.41; 51.12 euros) in Zurich trading.