PARIS — For the first half of 2007, Givaudan posted a net profit of 86 million Swiss francs, or $70 million at average exchange, down 67.7 percent over the same period in 2006. This was primarily due to the integration of Quest International.

As reported, Givaudan flavors and fragrance supplier, based in Varnier, Switzerland, announced late last year its intent to acquire Quest from Imperial Chemical Industries PLC in a deal valued at 1.2 billion pounds, or $2.21 billion at average yearly exchange. The European Commission approved the buy in late February, and Givaudan consolidated Quest's sales on March 2.

On a pro forma basis, combining the businesses of Givaudan and Quest between Jan. 1, 2006, and June 30, the company's net profit decreased 20 percent to 144 million Swiss francs, or $117.3 million.

In real terms, Givaudan's operating profit declined 40.9 percent to 185 million Swiss francs, or $150.7 million, reflecting a one-time integration-related cost of 100 million Swiss francs, or $81.5 million, and 84 million Swiss francs, or $68.4 million, worth of amortization of intangible assets related to the Quest acquisition. On a comparable basis, operating profit rose 13.7 percent to 282 million Swiss francs, or $229.7 million.

Givaudan's actual gross profit margin dropped to 47.5 percent from 49.1 percent in the first half, ended June 30, due to the lower profitability of the Quest business. On a pro forma basis, gross profit margin remained flat at 47.6 percent.

Givaudan's sales in the half rose 36 percent to 2.01 billion Swiss francs, or $1.63 billion. In local currencies, revenues gained 36.3 percent, and on a comparable basis, they increased 4.6 percent and 4.4 percent in local currencies.

Revenues from Givaudan's fragrance division increased 49.9 percent to 909 million Swiss francs, or $740.6 million, thanks largely to "strong growth" of its consumer products business across all regions, the company said in a statement. In local currencies, the uptick was 49.8 percent.

Givaudan's flavors revenues came in at 1.096 billion Swiss francs, or $892.9 million, up 26.2 percent, or 26.8 percent in local currencies. — Jennifer Weil

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