Agfa Health has weak second quarter sales
- 19 August 2008
Belgium-based Agfa-Gevaert reported that its healthcare division experienced falling sales for the second quarter of 2008.
The company said that performance was down due to the strong euro, delays in its new PACS system and the high cost of silver, used in the wet film processes that still account for half the business group’s sales.
As a result of the strong euro, Agfa said its sales declined 8.1% to €777m against the previous year. The company said that “Agfa HealthCare’s competitive position suffered from the strong euro.”
The company reported that its gross profit was affected by the delay of the upgrade of HealthCare group’s PACS system (€10m impact), currency effects (€11m impact) and adverse mix effects in all business groups.
Agfa said healthcare sales decreased 8.4% percent (14.3%) to €313m from the second quarter of 2007.
According to Agfa the “decrease is mainly attributable to North America and the United Kingdom (where a large part of the important NHS contract was booked in 2007).”
In these regions, Agfa said that the strong euro affected its healthcare division’s position and the decline in “the x-ray business is more outspoken and not compensated by healthcare IT.”
Agfa HealthCare also said that the high silver price also had an impact on its profitability, as approximately half of the business group’s sales still comes from film products. This accounted for €18m higher raw material costs.
Agfa said the computed radiography segment performed well in the second quarter, whereas the Imaging IT segment started to recover following the weak performance in the first three months of the year.
In imaging, Agfa HealthCare says it is making progress with its strategy to be the partner of choice for care centers in developing markets. In Kazakhstan, Agfa HealthCare won a tender for the installation of over 30 35-X CR digitizers at regional hospitals across the country. Recently, the business group also won a large tender in Iraq for the delivery of X-ray film and chemicals to all civilian hospitals in the country.
In addition the First Affiliated Hospital of China Medical University selected Agfa HealthCare for the implementation of the second phase of its RIS/PACS program. The project will be an important showcase for RIS/PACS integration in China.
In Australia, Agfa HealthCare completed the upgrade of the IMPAX PACS solution and the installation of new CR hardware systems at the prestigious Royal Prince Alfred Hospital.
In cardiology, Agfa HealthCare has signed an agreement with one of the largest hospital corporations in the US for the installation of an IMPAX cardiovascular information system at six of its facilities. Agfa HealthCare says it has also introduced a new solution which allows clinicians to monitor coronary lesions more efficiently, showing all relevant data and images in one view. The solution will become available later this year as part of the IMPAX cardiovascular system.
In the field of enterprise-wide IT, Agfa HealthCare announced that it has successfully completed the first installation of the ORBIS care module in Belgium. The system is now being used by 800 nurses at the Imelda Hospital in Bonheiden to document their main nursing activities.
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