1997 loss of 2.03 billion Swiss francs ($1.4 billion) yesterday after taking a staggering 6.31 billion francs in special acquisition-related charges.

But it proposed raising its dividend on 1997 results given a ten percent rise in underlying group net income.

And its finance chief said Roche did not intend to take any more special charges in 1998 other than amortising goodwill from its purchase of Bermuda-based Corange Ltd. last year.

Roche took a huge 4.45 billion franc charge against in-process research and development projects it got in its $10.2 billion acquisition of Corange, which groups the Boehringer Mannheim drugs and diagnostics business and orthopaedics maker DePuy Inc.

It took another 1.3 billion charge for integrating Corange and flavours and fragrances company Tastemaker. It also took 565 million in charges for its Pharma Performance Initiative restructuring programme.

Analysts were amazed by the extent of the charges Roche took, although underlying profit was generally in line with expectations.

"I am truly staggered that Roche was able to achieve one-third of the purchase price (of Corange) as in-process R&D,'' said Genghis Lloyd-Harris, an analyst at Credit Suisse First Boston in London.

"I would say that the accounting has been interpreted fairly liberally,'' he added.

"I think it is very positive that Roche was able to take this kind of restructuring charge in 1997. This leaves the company with a lot less goodwill to write down,'' added Rene Nordmann at Bank Sal. Oppenheim.

He thought the five percent rise in operating profit to 3.59 billion francs was rather weak.

Roche said its board proposed raising its dividend to 83 francs per share and certificate from 75 francs, the 11th year in a row it has been able to boost the payout.

Roche participation certificates closed 110 francs lower at 16,460 before the 1997 results were announced.

Chief financial officer Henri Meier said Roche did not intend to take more big restructuring charges this year.

"Other than writing off the goodwill linked to the Corange acquisition over the next 20 years, as envisioned by the IAS (International Accounting Standards), I do not expect any further special charges to arise,'' he wrote in response to written questions submitted by Reuters.

Meier said Roche decided to take a charge for Corange's research operations because it always deducted research costs from profits.

"In order to treat acquired projects the same way as Roche projects, we charged the appropriate R&D costs for Corange projects completely against last year's profit and loss statement,'' he wrote.

"This reflects IAS rules and our traditionally cautious and forward-looking accounting policy.'' Meier also said Roche was on the lookout for acquisitions, but saw its main focus on internal growth.

"The concentration process is not yet over in the pharmaceuticals sector.

Through the acquisition of Boehringer Mannheim, we have contributed to this process,'' he said.

"But size alone is not everything. Roche will, above all, grow internally.'' "We have excellent research and an exemplary product pipeline with new, promising innovative drugs. Naturally we examine on a case by case basis potential cooperations, or takeovers. If in future we can acquire the right target, at the right price and at the proper time, we will not hesitate, and will act,'' he said.