Despite a 3.9% year-on-year increase in sales to 286.9m (422m) for the quarter, fuelled by major deals with firms including Wyndeham, the Belgian group's graphics division reported a drop in operating profits from 15.6m to just 5.4m in the third quarter of 2005.

The pre-press manufacturer blamed rising raw materials costs and price erosion, caused by strong competition, for the drop in margins.

News of the price rises came as Agfa-Gevaert reported a 35.3m pre-tax loss for the quarter, which it blamed on a 74.1m hit from the insolvency in May of AgfaPhoto, a separate group which it had sold in November 2004.

The loss compared to pre-tax profit for the equivalent period in 2004 was 23.8m.

Marc Olivi, Agfa president and chief executive, said he was expecting a strong fourth quarter from the group's healthcare and graphic systems divisions.