The business week in Switzerland
Dominating the headlines this week was the financial situation of trouble-stricken SAirGroup. News that it had suffered record losses of nearly SFr3 billion last year sent the share price into freefall.
Massive losses had been expected at SAirGroup, but investors still rushed for the exits after the group confirmed on Monday that it had lost SFr2.9 billion ($1.71 billion) last year.
Pledges by the new chairman and chief executive, Mario Corti, that he would steer the company back into profit failed to calm investors’ nerves.
The markets wanted to hear more about the group’s planned deal with the banks, but Corti’s address at annual results conference was too short on detail to provide much of a confidence boost.
Investors were also spooked by fears that provisions set aside for losses in SAirGroup’s stable of loss-making foreign airline investments wouldn’t be enough.
One bright spot in an otherwise nightmarish week for SAirGroup was the news on Thursday that its regional carrier, Crossair, was expecting a good year ahead.
The airline said at its results conference that it had made a good start to 2001 – between January and March it carried nearly 700,000 passengers, an increase of nine per cent over the same period last year.
“The financial result to date is already above budget, which is based on a profitable year,” the company said in a statement.
Another company attracting market attention was international technology group, ABB, which saw its shares plummet by 16 per cent on Monday.
ABB was hit by a downgrading on its 2001-2003 earnings outlook from Deutsche Bank in which the broker drew attention to the company’s asbestos liabilities in the United States.
ABB told swissinfo on Wednesday that it had put aside $590 million (SFr1 billion) for claims related to asbestos exposure in the US.
Meanwhile, Swiss financier, Martin Ebner, accused the board of directors of the Roche healthcare group of seriously misleading shareholders about the real state of the company.
Ebner, whose BZ Group is a major Roche shareholder, vented his displeasure at the annual shareholders’ meeting in Basel on Tuesday. He took the largely symbolic step of refusing to ratify the board’s report.
The industrial holding group, Sulzer, came under renewed pressure on Friday, after an investment firm – Incentive Capital – upped the stakes in its hostile bid to take over the company.
InCentive said it was now willing to pay SFr430 ($253.5) per share, up from its earlier offer of SFr410.
The investment firm, owned by financier Réné Braginsky, also increased the share exchange ratio of its bid to Sulzer shareholders. They would now be able to swap one Sulzer share for a full InCentive share instead of the 0.9 previously announced.
On the economic front, economists were pleased with a clutch of data released over the course of the week.
Inflation for March came in at one per cent, up from 0.8 per cent in February. Although the rate is expected to rise over the course of the year economists feel that inflationary pressures within the Swiss economy remain negligible.
Unemployment numbers, released on Friday, showed a continuing improvement in the economy as the rate for March dropped to 1.8 per cent from 1.9 per cent in February.
by Tom O’Brien
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