Adds sales figures and outlook in paragraphs 4, 8, dividend with CFO comment in paragraphs 6-7
By Isabel Demetz and Bernadette Hogg
Jan 29 (Reuters) - Swiss contract drug manufacturer Lonza LONN.S reported a lower full-year core profit margin on Wednesday, citing the 2023 loss of COVID-related mRNA business, weaker demand for capsules and softness in its bioscience business.
It posted a 29.0% margin of core earnings before interest, taxes, depreciation and amortization (EBITDA) over sales for 2024, down from 29.8% a year earlier. That beat analysts' average forecast of 28.2% in a Vara consensus.
The Basel-based company said a strong performance at its contract drug manufacturing $(CDMO)$ business compensated for the negative effects that weighed on its capsules and health ingredients $(CHI)$ business.
Lonza's biologics unit, a part of the CDMO business area that produces monoclonal antibodies and drug conjugates, generated around 54% of the group's annual sales of 6.6 million Swiss francs ($7.3 million). They were down 0.2% at constant exchange rates.
Lonza experienced a boom during the pandemic when it produced ingredients for Moderna's MRNA.O mRNA COVID-19 vaccine. However, Moderna cancelled the contract in September 2023, which weighed on Lonza's growth last year.
The company, whose monoclonal antibodies are used in a new class of Alzheimer's drugs, proposed an unchanged dividend of 4 Swiss francs per share to be paid for 2024, below the 4.49 francs per share expected by analysts.
The constant dividend reflects the flat earnings growth seen in 2024, weighed down by impairments at joint venture Bactera, acquisition-related costs and higher provisions for environmental risk, CFO Philippe Deecke told reporters.
Lonza confirmed its outlook for 2025, including sales growth approaching 20% in constant currency terms for the CMDO business. The division posted growth in a low teens percentage for 2024.
The group said in December it planned to exit the CHI business without providing specifics. There was no update on the process in Wednesday's press release or the media call.
($1 = 0.9047 Swiss francs)
(Reporting by Bernadette Hogg and Isabel Demetz in Gdansk; Editing by Milla Nissi)
((Bernadette.Hogg@thomsonreuters.com;))
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