By Ludwig Burger and Tristan Chabba
(Reuters) – Swiss drug contract manufacturer Lonza reaffirmed its longer-term growth prospects, moving to buy back own shares worth 2 billion Swiss francs ($2.17 billion) and to increase its dividend despite an expected dip in the profit margin this year.
In a statement on Wednesday, Lonza predicted its 2023 core EBITDA margin would dip to between 30% and 31%, down from 32.1% in 2022, as last year’s boost in demand for COVID-19 vaccine manufacturing services is waning. But it reiterated a 33%-35% margin target for 2024.
The group proposed an annual dividend of 3.50 francs per share, up 17% year-on-year, and said the share buy-back programme would be launched this year.
“We are also pleased to confirm our Mid-Term Guidance 2024, supported by new capacity coming online and robust industry fundamentals,” said Chief Executive Pierre-Alain Ruffieux.
The Basel-based firm also reported 2022 core EBITDA, or earnings before interest, taxes, depreciation, amortisation and special items, of 2.0 billion Swiss francs, up 19.8% and slightly ahead of market expectations.
($1 = 0.9226 Swiss francs)
($1 = 0.9223 Swiss francs)
(Reporting by Ludwig Burger in Frankfurtby and Tristan Chabba in Gdansk; Editing by Paul Carrel)
