The German pharmaceuticals specialist Merck KGaA said profits rose strongly in the second quarter of its business year.

The company said it was now pencilling in a rise in full-year operating profits, whereas before it had been forecasting stagnation.

Merck said in a statement that net profit jumped by 36 percent to 81.1 million euros (93 million dollars) in the period from April to June and operating profit was up 34.7 percent at 191.5 million euros, despite a 3.5-percent decline in sales to 1.8 billion euros.

The increased earnings were "spurred by payments from Bristol-Myers Squibb on sales of our diabetes product Glucophage and from Schwarz Pharma on sales of the generic ulcer drug omeprazole," the statement said.

Merck attributed the decline in sales to negative currency effects, notably the weakness of the dollar.

"The organic rate of sales growth was 8.1 percent."

Chairman Bernhard Scheuble said that on the back of the second-quarter results, "we are well on the way to a good year."

Like other European-based global companies, full-year sales were likely to be negatively impacted by currency effects, Scheuble said.

Underlying sales were likely to grow "by a single-digit percent. But operating profits will be higher than last year's," the chairman promised.

Previously, Merck had been forecasting stable operating profit for the whole of 2003.