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Henkel profit drops 46% in first quarter

HENKEL AG, whose products include washing detergent Persil and Loctite glue, said yesterday that slumping demand for adhesives from auto makers pulled its first quarter net profit down 46 percent, but that it expects some improvements in the second quarter.

The Duesseldorf-based manufacturer earned 117 million euros (US$157 million) in the January-March quarter compared with 219 million euros a year earlier.

Sales, however, rose 3.1 percent to nearly 3.3 billion euros compared with 3.2 billion euros.

Chief Executive Kasper Rorsted said earnings were hurt by a drop in orders from auto makers for its adhesive products, though its laundry and home care units, along with cosmetics and toiletries, showed signs of improvement.

Auto makers worldwide have scaled back production as consumers, pinched by the global recession, hold off on buying new cars. That slowdown, in turn, has affected auto suppliers.

"At the beginning of this new financial year, Henkel too has felt the effects of the persistently adverse economic climate," said Rorsted in a statement.


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