Business Briefs
March 13, 2003
Springer back in the black
The Axel-Springer-Verlag has announced it made a profit of €61 ($66.2) million last year in spite of falling sales and advertising revenues in the media sector. In 2001, the company ended up €198 million in the red. At a press conference in Berlin on Thursday, Springer Chairman Matthias Döpfner said that he was expecting the company to stay in the black this year even though advertising revenues would probably stagnate: in 2002, they dropped by three percent to €2,78 billion. The company began its retrenchment a year ago, hiving off loss-making periodicals and divesting itself of its book division. A ten percent cut in staff numbers by the end of this year is already largely complete, saving the company €73 million this year alone.
Better results and Iraq rumors brake Dax slide
Germany's leading share index, the Dax, halted its sharp downward slide of last week, closing on Thursday up 4.6 percent at 2304 points. Traders said the respite was due to better-than-expected results in the technology and financial sectors and unconfirmed reports that the U.S. government was secretly negotiating terms with Iraq. The Dax had ended in negative territory in each of the previous seven days of trading, at times even slipping beneath the psychologically important benchmark of 2200 points.
Bayer still concerned about product liability claims
Shares in German chemicals and pharmaceuticals giant Bayer, however, did not benefit from the Dax's recovery. After Bayer chairman Werner Wenning warned on Thursday that the cost of settling legal claims in the U.S. could exceed its insurance limit, the company's shares hit an all-time low before rallying marginally. 18 months after withdrawing its anti-chloresterol drug Lipobay/Baycol from the U.S. market after it was linked with around 100 deaths worldwide, the company still faces nearly 8,000 lawsuits in the United States. The company maintains it has acted in "an appropriate and responsible manner" in respect of Lipobay, although it has already paid out €140 million in out-of-court settlements in some 500 cases. Worries about the extent of the company's liabilities have knocked 50 percent off its share price since the start of the year.
50,000 German IT specialists out of work
Germany currently has around 50,000 unemployed IT specialists. There is little hope that the situation will improve in the foreseeable future, in fact it could even get worse. That was the pessimistic message from Jürgen Peters of the engineering sector union IG-Metall at the CeBIT 2003 trade fair. Falling revenues are the main cause of the rise in the number of jobless in the IT industry. After stagnating two years ago, the number employed in the sector dropped by four percent last year, although in some areas the fall was greater -- as much as 15 percent among hardware manufacturers, said Peters. He said falling order books did not automatically mean cutting jobs and called on IT companies to look at other solutions such as part-time work and sabbaticals.
Bavarian automobile manufacturer BMW announced on Thursday it had made a pre-tax profit of €3.3 billion last year, but added that it was below expectations. In 2002, the company increased its sales by 17 percent, selling more than a million vehicles in a year for the first time in its history. Turnover increased by 10 percent to €42.3 billion, with net profits up by 8 percent at €2 billion. Although a spokesman for the company in Munich said 2002 was its best year ever, he declined to make any forecast for 2003.
T-Online predicts big year in 2003Deutsche Telekom shares rebounded from heavy selling earlier this week and ended Thursday up 6.7 percent at €9.75. The recovery was helped by better-than-expected results at DT's Internet unit T-Online. At a press conference at the CEBIT IT trade fair in Hanover on Thursday, Europe's biggest Service Provider predicted the spread of its high-speed Internet connections would allow it to double its operating profit to between €180 and €210 million in the current year. Although this exceeds analysts' forecasts by a wide margin, financial officer Rainer Beaujean said that these were too conservative and that Telekom's results could eventually be even better.
Shop opening hours extended again
The German parliament has given the green light to extending shop opening hours until 8 p.m. on Saturdays. Employees who work on Saturdays will have the right to one free Saturday a month. The law was passed on Thursday afternoon by 279 to 224 with no abstentions. It will come into force on June 1, 2003.