Air Liquide, a global leader in the sectors of industrial and medical gases, reported robust underlying performance for 2009 on Monday and said it saw signs of recovery in its markets.
The group said it had increased substantially its activities in the health sector during the year, particularly with the sale of antiseptic gels used to disinfect hands to prevent the spread of the H1N1 so-called swine flu.
Net profit for the year rose by 0.8 percent from the equivalent figure in 2008 to e1.23 billion (R12.9 billion) even though sales fell by 8.6 percent, but the group raised its operating margin to a record 16.3 percent.
This had been achieved with unexpectedly strong savings from cost cuts amounting to e335 million, obtained particularly by a freeze on recruitment.
The group intended to cut costs by a further e200 million this year which would take it well beyond the target of e600 million of savings planned under a programme for 2008-2011.
The price of shares in the French group rose by 2.83 percent to e81.09. The overall French market was showing a gain of 0.83 percent.
Chief executive Benoit Potier said that "the recovery of activity is continuing in the short term but is likely to be gradual depending on the zones and markets."
For this year, the group expected to increase its net profit. In the last 20 years, the company has increased its annual profit by an annual average of 8.0 percent.
Potier said the group would pursue a strategy of developing in emerging economies, implying that contrary to the view of some analysts the firm would not act as a so-called white knight by bidding for Airgas in competition with Air Products.
A move by Air Products on Airgas, with a hostile bid worth about $7.0 billion, would create the third-biggest world industrial gases group after Air Liquide, and Linde of Germany.
But Potier said that the bid amounted to a purely American affair on a "very local" market for the distribution of bottled gas in the United States, a business from which Air Liquide has withdrawn.
The group attributed its strong performance during the global economic downturn to the diversity of its markets, clients and geographical activities.
Sales for 2009 fell to e11.97 billion.
During the year the group reduced net debt by e593 million to e4.89 billion.
The board recommended that the dividend remain at e2.25. - I-Net Bridge