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European Business News (EBN), 97-04-29

European Business News (EBN) Directory - Previous Article - Next Article

From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated Tue, April 29 7:13 PM CET


CONTENTS

  • [01] Nokia profit more than trebles in first quarter
  • [02] Sears to spin off Selfridges unit as part of restructuring
  • [03] Germany 'will achieve the deficit target of the Maastricht Treaty'
  • [04] U.S. durable goods orders fall while labour costs rise
  • [05] Euro Disney operating profit doubles though loss expands
  • [06] GAN posts 1996 loss in line with expectations
  • [07] Scandanavian banks report mixed results
  • [08] French full-year GDP growth is revised up to 1.5% for fourth quarter
  • [09] Pharmacia first-quarter profit falls 15%
  • [10] Repsol tranche snapped up by small investors
  • [11] Degussa profit climbs 25% in first half
  • [12] Electrolux earnings slide 14%
  • [13] Creditanstalt profit surges 31%
  • [14] DSM earnings climb 8.8%
  • [15] Corporate and Economic Briefs

  • [01] Nokia profit more than trebles in first quarter

    Nokia pretax earnings raced to a 264% rise, due mainly to a significant improvement in operating profit for the first quarter of 1997. The results boosted the Finnish mobile phone company's confidence for further growth and profitability.

    'Our first quarter results give us further confidence in our previously stated positive outlook for strong growth and good profitability for 1997,' CEO Jorma Ollila said in a statement with the results.

    While pretax profit rose to 1.45 billion markkaa ($278.7 million) from 399 million markkaa a year earlier, operating profit increased by 186% to 1.46 billion markkaa.

    Sales for Nokia Mobile Phones increased 58% to 6.15 billion markkaa in the first three months of the year, while Nokia Telecommunications saw a 34% increase in sales to 3.73 billion markkaa.

    Ollila said Nokia was 'continuing to build on our position as the world's number one digital mobile phone supplier and as one of the two leading GSM/DCS network suppliers. But as always, actual performance will depend on a variety of external factors, including economic development in our major market areas and industry conditions.'

    Net sales of mobile phones rose nearly 60% to 6.15 billion markka, with telecommunications infrastructure sales growing more than 34% to 3.73 billion.

    'The operating efficiencies achieved by Nokia mobile phones as well as the continued strong results from Nokia telecommunications enhanced our leading position in many of the fastest growing segments in the telecommunications industry,' Ollila said.

    Analysts had forecast earnings in the region of 1.26 billion markka and Nokia's stock boosted gains, standing up 10 markka, or about 3%, to 311 markka soon after the report.

    [02] Sears to spin off Selfridges unit as part of restructuring

    Troubled Sears PLC announced a broad restructuring and said it will spin off its Selfridges unit, shed its Freemans catalogue business and eliminate the post of chief executive.

    Current chief executive Liam Strong is to leave Sears, although a departure date was unavailable.

    The UK retailer also posted a 26% gain in 1996 pretax profit to £88.9 million ($144 million).

    Sears said it hopes to spin off Selfridges sometime during the summer of 1998, though the company wasn't more specific about the timing.

    'The demerger will bring clear benefits for the two resulting businesses and for Sears shareholders,' said the company.

    'Separate stock market listings will allow investors to value each company separately according to its own characteristics.'

    The UK retailer said Freemans will be sold to Littlewoods for £367.5 million ($595.5 million). Net proceeds are expected to be about £40 million less than previously expected, due to a £27.5 million reduction in headline sale price and a further £13 million reserve in the net current asset target.

    In the year to Jan. 31, Freemans reported sales of 494.1 million GBP and trading profit of 21.5 million GBP.

    Sears also said it may dispose of 'some or all of the brands' of its footwear business.

    Despite heavy investment in recent years, the unit has continued to deteriorate, Sears said. However, an exact game-plan for what will be sold and what will be kept is still to be determined.

    To oversee any disposals and to bolster the unit in the interim period, Sears has appointed David James as executive chairman of British Shoe. The footwear business reported a loss of 9.1 million GBP for the year ended Jan. 31.

    Once Sears has demerged Selfridges, its clothing business will be left with Adams childrenswear, Miss Selfridge, Warehouse, Wallis and Richards stores. In addition to this, Sears will retain its property unit and SearsCard.

    [03] Germany 'will achieve the deficit target of the Maastricht Treaty'

    German Economics Minister Guenter Rexrodt reiterated recent upbeat official statements about the prospects for Europe's planned monetary union.

    Rexrodt said he assumes Germany will meet the requirements to qualify and that he is 'certain' an 'adequate' number of countries will be ready for a 1999 start.

    Faster economic growth of 2.5% in 1997 will enable Germany to meet the Maastricht Treaty's fiscal criterion for adopting Europe's single currency, Rexrodt said.

    'Naturally, no one knows 1997 budgetary results today,' Rexrodt said, 'but for Germany I assume that we will achieve our projection of 2.5% growth and therefore also the deficit target of the Maastricht Treaty.'

    Rexrodt also said he is 'certain' that an 'adequately large number of countries will qualify for the 1999 start' of the single currency.

    He did not say how many qualifying countries he would consider an 'adequate' number.

    Meanwhile, Germany's trade surplus widened 60% to 9.2 billion Deutsche marks ($5.4 billion) in February from January, the Federal Statistics Office said. That widening is slightly larger than the 8 billion marks economists surveyed by AP-Dow Jones had said they expected.

    February's current account deficit narrowed somewhat less than expected to 1.5 billion marks from 9.3 billion marks in January. Analysts had forecast a narrowing to 570 million marks.

    [04] U.S. durable goods orders fall while labour costs rise

    The dollar is trading lower following the release of U.S. economic data out today, while U.S. Treasurys surged after inflation friendly data soothed fears of a rate hike.

    New factory orders for durables posted a larger-than-expected 3.0% decline in March, the sharpest drop in seven months, the Commerce Department reported.

    Orders decline in all major categories, led by a 5.9% drop in orders for electronic equipment. The March drop in orders to $171.49 billion was the first decline since December 1996 and the largest since a 3.6% drop in August 1996, Commerce said.

    Also, the department said February durable goods orders were not as strong as previously thought. Orders for the month were revised to up 0.8% from up 1.5%.

    A Dow Jones Newswires survey of 17 economists published last week found an average estimate of a 0.3 % rise in March durable goods orders. Durable goods data are not adjusted for inflation.

    New orders for nondefense capital goods, considered a barometer of future plant and equipment spending, fell 4.4% in March to an adjusted $44.81 billion. That followed a 2.3% increase in February.

    Also out today Americans' wages and benefits rose a modest 0.6 % in the first quarter, offering reassurance to nervous financial markets worried a tight job market will cause accelerating inflation.

    The quarterly compensation gain was in the low end of the range for the Labor Department's Employment Cost Index's over the past two years and only two-thirds of the 0.9% predicted by economists.

    The index is considered a good gauge of inflation pressures since compensation represents about two-thirds of product's cost.

    [05] Euro Disney operating profit doubles though loss expands

    Euro Disney's operating profit doubled in the first half but its net loss widened due to higher finance charges. The theme-park operator said its loss in the period expanded to 210 million French francs ($35.95 million) from 169 million francs the year before. Operating income before finance charges, however, doubled to 120 million francs from 58 million francs.

    Sales during the winter season rose 14% to 2.17 billion francs from 1.90 billion francs.

    Euro Disney said its ability to manage seasonal fluctuations is improving, but that 'growth in the high season remains vital to counter the sharp increase in financial charges.'

    The company, which is 39%-owned by Walt Disney Co. in the US, had already warned that finance charges would rise by about 200 million francs for the full year. The company has also warned that it would have to overcome several financial hurdles this fiscal year in order to improve on the 1996 net profit of 202 million francs.

    A Euro Disney spokesman said the sales gain reflected improvements in operating performance which largely offset rises in financial charges.

    He said the figures show steady growth in turnover and visitors in the first half, which is the low season for the theme park, and builds on the 13% rise in year-earlier revenue.

    [06] GAN posts 1996 loss in line with expectations

    GAN announced a 1996 net loss in line with the government's estimate back in February, when it unveiled a bail-out plan that will cost taxpayers at least 20 billion francs.

    The loss, totalling 5.68 billion French francs, leaves GAN in a poorer position for privatisation than the profitable bank subsidiary, Union Europeenne de CIC, and makes a split sale of the two companies almost inevitable.

    During a press conference, GAN Chairman Didier Pfeiffer said he and CIC chief Pontet would have preferred that the state sell GAN and CIC as one package.

    'It seems difficult to keep that objective, given the likely bidders,' Pfeiffer admitted.

    Managing Director Thierry Aulagnon later told Dow Jones that CIC is ready for sale, while GAN has still to prepare its accounts.

    'We're hoping for a sale (of GAN) by the end of the year, if all goes well, ' Aulagnon said.

    As a condition for the sale of CIC, GAN will keep a stake of at least 20% in the bank, Pfeiffer added. CIC Chairman Philippe Pontet said all potential bidders he had spoken to agreed with such a condition, but he declined to name the companies involved.

    However, Pfeiffer noted that Assurances Generales de France, Allianz of Germany, Fortis, Assicurazioni Generali SpA of Italy and ING of the Netherlands have either expressed interest in acquiring GAN, or are likely candidates given their complementary nature.

    [07] Scandanavian banks report mixed results

    Swedish banking group Skandinaviska Enskilda Banken posted a 17% rise in first quarter operating profit to 1.5 billion kronor due largely to higher net interest income, decreasing loan losses and larger net commissions.

    However for Nordbanken, the other Swedish bank reporting today, results were not so positive. First quarter operating profits fell 10% to 1.4 billion kronor. The bank attributed the fall to rising interest rates, which hurt financial operations.

    In Norway, Christiania Bank, the country's second largest commercial lender, has posted a 23% rise in first quarter operating profit - before loan losses - to 692 million kroner. The bank said increased income from its financial markets and fund management operations were behind the rise in earnings.

    And also in Norway, Den norske Bank said stable net interest income, growth in lending and improved income from trading operations contributed to a 7% rise in operating profit for D to 826 million kroner in the first quarter.

    [08] French full-year GDP growth is revised up to 1.5% for fourth quarter

    France's gross domestic product rose at a 1.5% annual growth rate in the fourth quarter, while GDP growth slowed in the three months from the preceding quarter. The full-year pace was revised up from 1.3%.

    Economists said the revision was largely technical and noted that GDP figures for the last two quarters of 1996 had not changed. What was important now, they said, was whether growth would accelerate in 1997, the test year for joining a single European currency.

    The French national statistics agency also released data showing consumer spending was flat in March after a fall in February, but economists also said this was a reasonably healthy figure when read along with data for January.

    While many believe the French economy is set to pick up this year, the black spot for the centre-right government as it heads into a parliamentary election on May 25/June 1 is record 12.8% unemployment rate. Further jobless data is due out Wednesday. France's GDP grew at an inflation- adjusted rate of 0.2% in the fourth quarter from a third quarter rise of 0.8%. Neither figure was revised from provisional figures.

    The statistics agency said France's deficit-to-GDP ratio at the end of 1996 fell to 4.2%, compared with 5% in 1995. That ratio is higher than government estimates, which put the 1996 deficit-to-GDP ratio at 4.1%.

    International trade in the fourth quarter had no significant effect on GDP, the agency said, with exports rising 1.3% in the quarter and imports rising 1.2%. For the year on average, exports rose 4.7% while imports rose 2.5%. The 1996 trade surplus added 0.6 point to GDP growth, the agency said.

    Inventory restocking was another positive factor in the fourth quarter, adding 0.3 point to growth. For the year as a whole, however, inventory run- downs cut 0.6 point from GDP.

    [09] Pharmacia first-quarter profit falls 15%

    Swedish-American drugs company Pharmacia & Upjohn confirmed that its first- quarter earnings fell 15% to $194 million, due in large part to the strength of the dollar.

    In the three months to March 31, the company said its sales fell 5.9% to $1.6 billion, despite continued sales growth for its Xalatan and Camptosar products in the U.S. It also announced a management initiative designed to enhance its performance.

    'We are disappointed with our performance,' said P&U Chairman of the Board Richard Brown in a written statement, adding that the board plans to improve it in the future.

    However, in a telephone-conference call, P&U's acting President and chief executive Jan Ekberg said the disappointing results weren't a result of the 1995 merger between Pharmacia of Sweden and Upjohn of the U.S.

    The strength of the dollar against the yen was the major factor behind the first quarter fall in sales, P&U said. Other factors included trade inventory building in the U.S. in the fourth quarter and, to a lesser extent, changes in Swedish government drug reimbursement policies, P&U said.

    Ekberg said the company has introduced a five-step plan to improve its performance, 'We have lots to do going forward,' Brown told reporters.

    Also, Ekberg said P&U will improve the way it hedges against currency- market movements. On the one hand, the company will extend the time horizon on currency hedging, while, on the other hand, forecast and declared intercompany dividends will be included in the defined exposure.

    [10] Repsol tranche snapped up by small investors

    Small Spanish investors have snapped up the remaining 10% stake in the energy group Repsol, underpinning the success of the centre-right goverment's third privtisation. The tranche, reserved for small investors, was 47 times oversubscribed.

    Sales to institutional investors went less well, resulting in the state transferring shares set aside for institutional sale to the tranche for private investors.

    Repsol closed up half a percent in Madrid.

    Spain's state industrial holding agency set a final retail share price of 5, 803 pesetas for the privatisation of the government's remaining 10% stake in energy company Repsol, SEPI confirmed.

    The final share price was set at the close of trading on the New York Stock Exchange, based on Repsol's average share price of 6,045 pesetas on the Madrid Stock Exchange that session, minus a 4.0% discount, and is below the maximum retail share price of 6,327 pesetas fixed April 21, SEPI said.

    Yesterday, Repsol shares closed slightly down at 6,010 pesetas, off 70 pesetas from Friday, on volume of over 2.52 million shares traded.

    According to SEPI, around 15.3 million shares were allocated to minority investors, with around 1.5 million shares awarded in the Spanish institutional tranche.

    In the American tranche a rounded 2.45 million shares were allocated, and in the British tranche around 1.84 million shares were awarded, with about 1.84 million shares awarded to other investors throughout the world, SEPI said.

    [11] Degussa profit climbs 25% in first half

    After reporting that pretax profit grew 25% in the first six months, Degussa forecast favourable earnings would continue in the second half of its 1996/1997 business year.

    'The growth momentum is coming mainly from abroad,' Degussa said in a statement. Earnings increased across the board, it said. However, with group sales growing a less satisfactory 5%, dealers suggested a possible slowdown in business in the second half.

    Germany's chemicals and precious metals group said pretax profit in the six months to March 31 rose to 233 million marks ($134.6 million) from 186 million in the year-ago period.

    The healthy growth was boosted largely by the profit contribution of foreign drugs affiliates, particularly through the first time consolidation of U.S. company Muro Pharmaceutical which Degussa bought last year.

    Degussa noted, however, that health unit Asta Medica was hit by unsatisfactory domestic business. And group sales rose 5% to 7.2 billion marks from 6.86 billion, Degussa said.

    Looking ahead to the rest of the year which runs to September 30, Degussa showed optimism that the profit return would be maintained.

    'After the pleasing first half we expect the earnings situation to remain good overall in the course of the year,' the company said.

    Sales of chemical products rose 8% to 2 billion marks due entirely to increases in volume sales, with a 1% fall in prices compensated for by the positive impact of exchange rates, Degussa said.

    Sales of health and nutrition products rose by 12% to 1.5 billion marks while earnings grew 'significantly,' Degussa said.

    Although the news failed to spur the company's shares in electronic trade after the earnings announcement, Banque Paribas reiterated its 'Buy' recommendation for the stock, noting that the 29% rise in parent company pretax profit to 86 million marks in the first half was a sign that Degussa's domestic situation was improving.

    [12] Electrolux earnings slide 14%

    Swedish industrial group Electrolux reported a 14% drop in pretax profit to 777 million kronor ($93.2 million) in the first quarter, partly due to a worsening net financial cost.

    Market analysts were on average expecting a rise in pretax profit to 949 million kronor.

    In the first three months of the year, Electrolux had a net financial cost of 339 million kronor, up from a cost of 255 million kronor a year earlier. This was mainly due to higher borrowing, a lower return on liquid funds and an adverse effect from changes in exchange rates.

    Sales increased by 4.1% to 28.72 billion kronor in the first quarter. Some 3 percentage points of this refer to changes in exchange rates and 1 percentage point is due to acquisitions and divestments, Electrolux said. Sales at Graenges, the Electrolux subsidiary, rose 13% to 2.37 billion kronor during the period from a year earlier. The improvement was due to higher volumes and better margins for Profiles, Strip & Foil and Autoplastics.

    Lower aluminium prices and higher energy costs led to continued weak results for the metals unit Graenges Metall, however.

    In connection with its 1996 earnings report, Electrolux said it will distribute all shares in Graenges to its shareholders and list the company on the Stockholm Stock Exchange. May 20 is proposed as the record day for receiving shares in Graenges, and May 21 is seen as the listing date, Electrolux said.

    [13] Creditanstalt profit surges 31%

    Austria's Creditanstalt Bankverein, a traded unit of Bank Austria, said group operating profit in the first quarter rose 31% to 2.11 billion schillings ($168 million).

    Chairman Guido Schmidt-Chiari, who will be replaced today after 39 years with the bank, praised the 'very positive' results from the first quarter.

    Creditanstalt said the first-quarter figures did not include a 'net capital gain' of about 1.3 billion schillings from the sale of a 32.8% stake in machine maker Maschinenfabrik Andritz last month.

    In the first three months of 1997, operating income was up 16% to 5.31 billion schillings, including a 1.7% rise in net interest income to 2.56 billion schillings. Total assets grew 7.3% to 737.58 billion at the end of March, it added.

    The bank said it expected group net profit in 1997 to surpass the 2.93 billion schillings posted for 1996.

    Erich Hampel, of the Oesterreichische Postsparkasse, will replace Guido Schmidt-Chiari as chairman, who resigned after Bank Austria bought a 70% voting stake in Creditanstalt from the government earlier this year.

    [14] DSM earnings climb 8.8%

    Dutch chemical company DSM said its first-quarter 1997 net profit rose 8.8% to 223 million guilders ($117.4 million), a gain the company attributed to a recovery in the margins and selling prices of a number of its products. Sales in the same period rose to 2.99 billion guilders, compared to 2.6 billion guilders in the first quarter of 1996.

    The results were at the high end of analysts' expectations, with several having forecast profit of about 217 million guilders for the three-month period. DSM upgraded its forecast for the first half of 1997, saying it expects results will be 'higher' than in the year-earlier period as 'there are no signs that the present favourable market conditions will change in a major way in the coming months.'

    However the company said it was still too early to give a forecast for the full year.

    DSM said prices for its products were helped by varying degrees of economic growth around the world, with the strongest expansion seen in Asia.

    'The upward trend in the selling prices of a number of different products which had started in the second half of 1996 continued in the first quarter of 1997,' DSM said.

    DSM's operating result rose 10 million guilders to 304 million guilders in the first quarter of 1997 as DSM was finally able to pass on increases in raw material costs which began to rise in the second half of last year.

    As a result, DSM said its own margins are now on average at the same level as the first quarter of 1996.

    'Higher margins on hydrocarbons and plastics were offset by lower margins on fibre intermediates, melamine, elastomers and fertilizers,' DSM said.

    [15] Corporate and Economic Briefs

    Japan's largest brokerage house, Nomura Securities, traded five companies' stocks illegally six times in 1995, so as to give favours to a 'sokaiya' corporate racketeer, Nomura officials admitted. Through the illegal stock transactions, a total of 58 million yen was allegedly given to a real estate company run by a relative of sokaiya Ryuichi Koike, to prevent an annual meeting of Nomura shareholders from being disrupted, they said. Between January and July 1995, Nomura passed to the real estate company the capital gains it had earned by trading 950,000 shares by making it look like as though the shares were purchased by the real estate company, the officials said.

    Belgium's year-to-year inflation was a preliminary 1.26% in April, compared with 1.46% in March, the Belgian economics ministry said Tuesday. The ministry said CPI was down 0.03 points to 123.91 points, or 0.02%, from March. April's preliminary inflation was led by increases in the cost of holiday villages, the Ministry for Economic Affairs said. Meanwhile, the cost of fresh fruit, gasoline and fresh vegetables fell. The health index, used to calculate rents and salaries, rose 0.02% to 121.33 points from 121.31 points in March.

    Czech industrial sales dropped 0.8% in March from March 1996, and were down 1.5% in the first quarter over the same period of last year, the Czech Statistical Office (CSU) said, citing preliminary data in constant prices. The constant prices are pegged to an average in 1994. Nominal average monthly wages in industry rose 14.6% in March over March 1996 and were up 13.4% in January through March from the corresponding period of 1996, the CSU said. Real industrial monthly wages rose 7.3% in March over March 1996, and rose 5.9% in the first quarter over the same quarter of 1996, the CSU said. Number of industrial workers dropped 4.4% or by 60,000 people in March from March 1996, the CSU said.

    France's housing starts in the first three months of 1997 fell 7.7% from the same period a year ago, the country's infrastructure ministry said. Housing starts during the 12 months through March were down 3.7% from those 12 months a year earlier, the ministry said. Permits fell 7.7% over the last three months and 3.7% over the last 12 months, it said. While a favourable trend has developed in the new-home market - with about 38,000 new units being built per quarter since the beginning of 1996, except for holiday periods - the ministry said non-residential properties are still in a slump. They fell 4.3% in the 1997 first quarter from that period of 1996.

    German plant and machinery manufacturers registered a 6% decrease in orders, on a real, or price-adjusted basis, in March compared to a year earlier, the nation-wide industry association said. The Verband Deutscher Machinen- und Anlagenbau (VDMA) reported domestic orders in March decreased by 5% while foreign orders fell 7% from a year earlier. Despite the March decrease, VDMA said that machinery orders in the first quarter of 1997 rose by a real, or price-adjusted, 1% from a year earlier. That figure reflects a 7% increase in domestic orders and a 4% decrease in foreign orders compared to the like period the previous year.

    Diversified group Oerlikon-Buehrle said that it expects its 1997 operating profit to improve over the 1996 level of 204 million Swiss francs ($139 million). The company credited 'favourable business trends' in its major divisions and said sales this year should at least match the 1996 total of 3.6 billion francs. In the first quarter of this year, group sales fell about 5% to 766 million francs from a year earlier, although the company cautioned that it usually records more sales in the second half. The decline in first-quarter sales meant that operating profit also fell in the period, the company said. Group orders received dipped 4% to 824 million francs in the first quarter.

    Kuoni, the Swiss travel group, is confident about 1997 because of higher- than-expected results in the first quarter, the company said. Kuoni will see sales growing a double-digit figure this year, Chief Executive Officer Riccardo Gullotti said at a news conference. Earnings before interest and tax will increase at least 20% this year. Gullotti pointed out that during the first half of the year, Kuoni achieves only 10% to 20% of its operating earnings, while 50% of fixed costs occur in that same period. The peak in sales is usually achieved during summer and autumn holidays in the second half of the year. This makes extrapolating the first quarter into the full year somewhat difficult, he cautioned. The company didn't disclose detailed figures for the first quarter.

    Net lending to U.K. consumers was 780 million pounds ($1.27 billion) in March, down from a revised 1.19 billion pounds in February. Net lending in March was less than the 1-billion-pounds economists were expecting. Net lending in February was previously estimated at 1.22 billion pounds. The seasonally-adjusted figures published by the Bank of England Tuesday cover net unsecured lending by banks and building societies on credit cards and personal accounts as well as credit provided by retailers, insurance companies and other non-bank lenders such as specialist mortgage grantors. Net mortgage lending was a seasonally adjusted 1.77 billion pounds in March, down from 1.87 billion pounds in February.

    M4, the broadest measure of U.K. money supply, rose a seasonally adjusted 11.2% in the 12 months through March, unrevised from provisional estimates. The annual rate of increase is the same as in February and means M4 remains well above the government's 3% to 9% monitoring range. The Bank of England, which published the figures Thursday, said M4 rose 1.0% in March compared with February, unrevised from provisional estimates. Net sterling lending to the M4 private sector was a seasonally adjusted 4.92 billion pounds in March, revised up from provisional estimates of 4.5 billion. It was 7.76 billion pounds in February. M4 lending covers sterling loans by banks and building societies to the M4 private sector, defined as all U.K. residents other than banks, building societies and the public sector

    Clariant, a Swiss speciality chemicals company, Tuesday announced a first- quarter rise of 26% in Swiss-franc sales and an 11% increase in terms of the local currencies of its various markets. The company said this positive development should continue in the second quarter. First-quarter sales totalled 689 million francs ($ 469 million), up from 548 million francs in the same period of last year. All major divisions showed increases in both Swiss francs and in local currencies, although in the Masterbatches division about half of the rise was ascribed to acquisitions.

    AGA posted a 14% drop in first quarter earnings, just below analysts expectations, due to restructuring charges and the generally weaker economic climate in Europe. Before taxes but after restructuring charges of 105 million kronor ($13.5 million) the company made a profit of 309 million kronor in the first quarter. Analysts had on average expected the Swedish industrial and medical gas company to show pretax profit of just over 330 million kronor. Apart from the restructuring charges, profit was hit by a weaker economic climate in Europe and higher depreciation and financing costs attributable to the investment program. Sales rose modestly to 3.40 billion kronor from 3.22 billion kronor in the first quarter 1996.

    Banco Ambrosiano Veneto saw its deposits rise by 5.4% in the first quarter over the same period in 1996, while loans were up 12%, according to figures released Tuesday at the company's shareholders meeting. Ambroveneto's assets under management rose 88% in the quarter to 9.935 trillion lira ($ 5.8 billion), while the bank's mutual funds amounted to 12.126 trillion lira, up 150% over the first three months of 1996. Giovanni Bazoli, the bank's chairman, said Ambroveneto will likely register 1997 results in line with those seen last year. He added that the quarterly results are in line with the targets set out for this year's budget.

    French pharmaceutical and beauty products group Sanofi said its sales in the first quarter 1997 rose 5% to FF5.683 billion from FF5.435 billion in the similar 1996 period. By division, Sanofi's pharmaceuticals sales rose 5% to FF4.98 billion from FF4.73 billion while beauty-product sales stagnated at FF704 million in the first quarter 1997 compared with FF706 million in the similar 1996 period.


    From the European Business News (EBN) Server at http://www.ebn.co.uk/


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