The business week in review

The business week was marked by an upbeat forecast for the Swiss economy as well as a tranche oof half-year results. The country's largest telecommunications operator, Swisscom, also announced a major restructuring programme.

The positive forecast for the economy came in a survey by Swiss Institute for Business Cycle Research (KOF). The Zurich-based body said the economy had continued to expand strongly in the second quarter of the year, with exports doing particularly well.

However, it suggested that while prospects were good, demand might be falling.

The forecast was backed up by figures on Wednesday from the country’s main exporters, the Swiss mechanical and electrical engineering industries (Swissmem). They reported strong second quarter growth, with orders up by 30 per cent over the same period last year.

Swisscom announced a major restructuring programme: the board of directors intend to transform the group into a series of independent operating companies by the end of next year.

The week saw another tranche of half-year company results. On Monday Swiss watchmaker, Swatch, announced that net profits had more than doubled in the first six months of the year, reaching SFr300 million ($177 million).

Switzerland’s largest bank, UBS, on Tuesday posted its best half-year results, with net profits up by 84 per cent to SFr4.268 billion ($2.480 billion) over the same period last year.

One company whose results bucked the trend this week was the SAirGroup.
On Tuesday, the parent company of the national carrier, Swissair, announced that its net profit for the first half had plunged to SFr3 million ($1.73 million), compared with SFr87 million during the same period of 1999.

Among other corporate results:

– The Swiss healthcare group, Novartis, reported strong first-half results. Net profit jumped 12 per cent to SFr4.2 billion ($2.4 billion), on sales of SFr19 billion.

– Swiss food and hotel group, Mövenpick, reported positive results. Earnings before interest and taxes rose by SFr7.3 million to SFr12 million ($7 million).

– Chocolate producer, Lindt and Sprüngli, reported sales growth of 9.9 per cent, with company turnover reaching nearly SFr600 million ($346 million).

– The world’s largest food group, Nestlé, posted net profit growth of 35 per cent to SFr2.8 billion ($1.6 billion), up from SFr2.1 billion for the same period in 1999.

– First-half net profits at Swiss elevator maker, Schindler, were up 40 per cent at SFr108 million ($64 million). The rise in profits comes despite problems in its systems business.

– Swiss packaging and aluminium group, Algroup, posted a 16 per cent increase in net profit at SFr230 million ($134 million). The company affirmed its planned merger with Canada’s Alcan was on track.

Finall, in other business news, the financier, Martin Ebner, announced he was selling his shares in the pharmaceutical company, Roche. His BZ bank said its Pharma Vision unit had sold its entire stake in the company.

by Tom O’Brien