Nobel Profit Falls

Nobel Biocare Holding AG, the world’s largest maker of dental implants, said second-quarter profit dropped 42 percent because of a weak U.S. dollar and lower demand in Europe and the U.S.

Nobel Biocare maintained its 2008 sales forecast, which it already cut three times in the past year. Chief Executive Officer Domenico Scala, the former Syngenta AG executive brought in to replace Heliane Canepa in July 2007, said in a conference call that there are “encouraging initial signs” of recovery and that the worst may be over in the U.S. market.

“The company is in a long transition phase and it’s too early to say the worst is over,” Christoph Gubler, an analyst at Bank Vontobel in Zurich, said in an interview. “When your profitability goes down so dramatically it raises questions about how solid the growth is and whether it was just bought with discounts and rebates.”

Smaller rival Straumann Holding AG rose the most in 10 years in Zurich trading Aug. 7 after saying first-half profit gained 6 percent on sales of new products.

The company confirmed it expects sales to rise in the “low single-digits,” “slightly” underperforming the market average, while profitability on earnings before interest and taxation may remain at 2007 levels at a constant exchange rate.

Sales in North America fell 8.8 percent to 52.5 million euros. That compares with a 10 percent decline to 47.9 million euros during the first quarter. Nobel Biocare generates about 31 percent of its sales in North America. Revenue in Europe, the Middle East and Africa declined to 82.8 million euros.

Nobel Biocare has enlarged its sales force in the U.S. and sees the “first signs of improvement” in Europe, where it has appointed country managers for Germany, Switzerland and the U.K., Scala said.

Sales in the Asia Pacific region rose to 27.5 million euros, while revenue in Latin America and the rest of the world fell to 5.4 million euros.

Source: Bloomberg