Geneva - Roche AG, the Swiss pharmaceuticals giant, reported a drop in profits Thursday, but offered a bullish forecast on increasing sales, including for its flu and cancer drugs.

Net income in the first half of the year was down 29 per cent to 4.1 billion Swiss francs (3.84 billion dollars), which the company said was due to one-time costs related to the recent acquisition of Genentech, the United States-based biotech company.

Pharmaceutical sales grew by 11 per cent, which Roche said was twice the global market rate. This was largely driven by Tamiflu for influenza, along with the sale of oncology medications, of which Roche is the world's largest producer.

Sales of Tamiflu, or by its generic name oseltamivir, rose 203 per cent to 1.0 billion francs in the first six months of the year due to the global outbreak of the new influenza A(H1N1), also called swine flu.

Group sales as a whole were up 2 billion to 24 billion Swiss francs, an increase of 10 per cent in local currencies.

Operating free cash flow increased 52 per cent to 6.8 billion francs and Roche said it would be used to rapidly repay net debt, with the goal of reaching a net cash position by 2015.

In its outlook, Roche said the full-year sales were expected to grow "well ahead of market."

Roche meanwhile reported "progress" on the integration of Genentech into the larger company. The Basel-based pharmaceutical completed its takeover in March. (dpa)