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The business week in Switzerland

Sabena's fate is still not sealed

(swissinfo.ch)

The business news this week was dominated by discussions about the Belgian carrier, Sabena, which is part owned by Swissair's parent company, SAirGroup.

Sabena's future still hangs in the balance after SAirGroup and the carrier's other shareholder, the Belgian government, postponed a decision on a rescue plan for the ailing company. Sabena's co-owners will meet again in two weeks to decide the carrier's fate.

Meanwhile, Sabena will continue to operate normally and talks between unions and management will proceed on a restructuring plan that would cut some 700 jobs and introduce possible wage cuts and higher worker flexibility.

In other news this week, shares in Zurich Financial Services took a slide following news that the company's normalised net profit in US dollars for 2000 would fall below 1999 levels.

The company said weaker profits were down to an unexpected reserve strengthening for reinsurance and exceptionally severe weather conditions.

But it added that earnings per share in Swiss francs would rise by close to 10 per cent and that it expected stronger revenue growth in several key markets this year.

Several companies released sales figures this week.

Saia Burgess said it expects sales to break through the key SFr500 million mark ($300 million) over the course of the year.

The Rieter Group boosted its turnover in 2000 by 20.3 per cent to SFr2.93 billion. It saw orders rise by more than 27 per cent to almost SFr3 billion.

And the Unaxis technology group, formerly known as Oerlikon-Bührle, announced an increase in sales of 41 per cent to more than SFr3.2 billion. The company said turnover in its Information Technology division soared 79 per cent.

In other business news, ABB won a SFr55 million contract to improve the power supply for the London subway transport system. The new system is to replace a London power station that dates from 1905.

News about Switzerland's economic health also captured attention. The latest survey from the Swiss Institute for Business Cycle Research showed strong fourth-quarter growth, but said pace is expected to slacken in the first half of 2001.

The survey of 5,000 companies in January showed that its indicator for overall industrial activity continued at the same high levels seen for about the past nine months. The indicator hasn't been as high since 1990.

Switzerland's unemployment rate increased in January for the fourth consecutive month. The number of people out of work rose to two per cent in January from 1.9 per cent in December. The Economics Ministry said the rate was generally in line with expectations and blamed seasonal factors for the increase.

by Michael Hollingdale


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