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Half-year results bring good and bad news

Nestle is heading for another record year

(Keystone Archive)

The release of financial results for the first six months of the year dominated the business headlines this week. The reporting season brought good news from some companies but also further evidence that the economic slowdown was affecting some sectors.

The Nestlé food group - the biggest in the world - reported another set of solid figures this week and the company appears to be heading for another record year.

Nestlé, based in Vevey on Lake Geneva, saw net profit rise 12.7 per cent to more than SFr 3 billion compared with the same period last year. Sales of SFr 41 billion were up six per cent.

Ciba Specialty Chemicals became the latest company to announce job cuts on Tuesday in the wake of the global economic slowdown. The firm plans to cut a further 450 jobs by the end of 2002.

Earlier this year, the company had already decided to cut 150 positions as part of restructuring plans.

The move came despite half-year results that showed net profit up three per cent to SFr222 million. Sales were down 1 per cent, however, to SFr3.86 billion.

Clariant cuts 1,000 jobs

Ciba's move follows that of its bigger rival, Clariant, which last week reported a 50 per cent decrease in it first half earnings to SFr143 million and said it would axe 1,000 jobs worldwide.

The Swatch Group - the largest watchmaking company in the world - has also been hit by the slowdown. Its net profit fell by almost 25 per cent in the first half of the year to SFr231 million. But the company said the real profit decline was closer to 10 per cent as last year's earnings figure had included a one off financial gain.

There was better news from Swisscom which saw its first half net profit more than double to SFr5.36 billion. The company said the performance was mainly due to the sale of a 25 per cent stake in Swisscom Mobile to Vodafone.
Sales revenue was up by 2.8 per cent to just over SFr7 billion.

The Sulzer industrials group also reported good results this week and said it was aiming for earnings before interest and tax of around SFr100 million for the year as a whole.

Swiss Re, the world's second biggest reinsurance group, said this week that its Dutch credit insurance unit is to merge with a division of Germany's Gerling insurance group. The deal will create a company with a global market share of 25 per cent.

And finally, Credit Suisse First Boston has hired Gary Lynch as its senior legal officer. Analysts welcomed the move as a sign that controls at the bank are being tightened.

The bank is facing a US federal investigation into whether its sale of shares in initial public offerings during the dot-com boom broke American securities laws.

By Michael Hollingdale.

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