Bosses face tough questions at AGMs

Swisscom has decided not to sell its Bluewin Internet service provider Keystone Archive

With the AGM season underway, the bosses of some of Switzerland's top firms have been coming under heavy pressure from disgruntled shareholders. This week, Swisscom chiefs are likely to face some difficult questions.

After this year’s shareholder rebellions at the AGMs of Swissair, Sulzer, Kuoni and Zurich Financial Services, Swisscom’s meeting on Tuesday is likely to be a rather quiet affair.

The company can boast a 5.7 per cent rise in first quarter cash operating earnings, as well as an endorsement last week from its majority shareholder – the government – which said the company had met its targets.

Difficult questions might arise, though, over Swisscom’s “hold tight” policy of sitting on its cash pile through difficult times in the telecommunications industry.

Investors might also want to look at Swisscom’s decision to not sell its Internet service provider, Bluewin. Swisscom announced just over a week ago that the jury was still out on how it planned to make money out of the service.

Shareholders at the machinery firm, Rieter, might also be in the mood for asking questions at that company’s AGM on Wednesday. Despite revealing a 17.7 per cent upturn in net earnings over 2000 the group warned in April of difficult market conditions this year, meaning lower sales and earnings.

Also holding its AGM on Wednesday will be building chemicals and material maker Sika Finanz. It has disclosed no forecast as yet for 2001, but has revealed a 12 per cent increase in first quarter sales at SFr472 million ($272.7 million).

The last big meeting of the week will be at Switzerland’s second largest financial group, Credit Suisse.

Only last week the Credit Suisse Group revealed that net profit had fallen by 25 per cent in the first quarter of 2001 to SFr1.482 billion ($816.9 million), reflecting difficult market conditions over the first three months of the year.

However, the group still expects net earnings to increase over the year as a whole despite the market fluctuations which have undermined its private and investment banking businesses.

On the economics front, the consumer price index (CPI) for May will be released on Thursday. Analysts expect inflationary pressures to remain under control following on from the 1.2 per cent increase in the CPI seen in the year to April.

by Tom O’Brien