Film and PACS vendor Agfa-Gevaert's second quarter profit will fall considerably short of expectations, despite a 9% increase in sales and earnings before interest and taxes (EBIT), according to the Mortsel, Belgium-based firm. Agfa attributed the profit decline to higher exceptional expenses and rapid increases in production and administrative costs. The company will report its complete first half results before the opening of the stock market on August 23.
Agfa said it plans to restore its profit margin in 2002, and will unveil the measures it will take to achieve this goal on September 27. Agfa's plan -- to be released following approval by its board of directors and consultation with its so-called social partners -- will target efficiency and cost-effectiveness improvements, according to the vendor.
Agfa said the plan will allow the firm to finance further expansion and acquisitions in digital imaging using its own cash flow, and also resume profitable growth. It will likely include provisions that impact the company's financial results for 2001, according to the firm. Under these circumstances and in light of recent lackluster economic forecasts, Agfa said it would likely report a decrease in net profit in 2001, instead of expected 10% net profit growth.
In other Agfa news, the firm has been awarded a contract to link five hospitals and seven health clinics in the Swedish county of Dalarna with a single digital network for radiology information and image management. The five-year agreement, valued at $4.4 million (U.S.), will cover all hardware, software, and professional services.
By AuntMinnie.com staff writersAugust 15, 2001
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