/raid1/www/Hosts/bankrupt/TCREUR_Public/030814.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Thursday, August 14, 2003, Vol. 4, No. 160
Headlines
C R O A T I A
VIKTOR LENAC: Major Shareholder Injects US$1 Mln to Save Firm
C Z E C H R E P U B L I C
CK FISCHER: Czech Airlines Drops Claims Against Troubled Rival
F I N L A N D
BENEFON OYJ: Fate Depends on Approval of Restructuring Program
MARTELA OYJ: Difficult Market Continues to Weigh Down Results
F R A N C E
ARIANESPACE: Launch of Flight 162 Delayed Pending Verifications
VIVENDI UNIVERSAL: Obligation to Pay Ex-CEO Severance Canceled
G E R M A N Y
BERTELSMANN AG: Merger with Warner Anti-competitive, Say Rivals
EVOTEC OAI: Reduces Operating Loss by Almost Half to EUR4.9 Mln
MOBILCOM AG: Wireless Biz Back in Black After 11 Losing Quarters
NET AG: Breakeven Far Off Despite Liquidity Improvement
PROSIEBENSAT.1 MEDIA: Fitch Affirms 'BB' Unsecured Ratings
QSC AG: Expects Cash-flow Breakeven in First-half Next Year
WEDECO AG: Second Quarter Revenues Surge 49.2%
H U N G A R Y
IRISBUS GROUP: Shuts down Szekesfehervar Manufacturing Plant
KERESKEDELMI ET HITLELBANK: Watchdog Censured for Delayed Action
KERESKEDELMI ES HITELBANK: Sues Broker for Laundering Money
KERESKEDELMI ES HITELBANK: Refers Clients to Rival
N E T H E R L A N D S
HEAD N.V.: First-half Operating Loss Balloons to US$18 Million
VERSATEL TELECOM: Settles Liability to German Business Partner
WOLTERS KLUWER: Benchmark Ordinary Net Income Down 26%
N O R W A Y
PAN FISH: Atle Eide to Replace Barmen as Managing Director
PAN FISH: Business Reorganization to Entail Job Losses
PAN FISH: Considers Sale of Companies Under Reorganization
P O L A N D
PETROLEUM-GEO: Tapping Linklaters as Special English Counsel
S W E D E N
SONG NETWORKS: Reports Positive Cash Flow, Improved Profits
S W I T Z E R L A N D
SWISS INTERNATIONAL: Unit Charters Rival to Deliver Cargo
SWISS RE: Shareholder Restructuring at Gerling NCM Complete
U N I T E D K I N G D O M
ABBEY NATIONAL: To Establish Customer Outreach Center in Belfast
AMP LIMITED: Holds Briefing on Six Months Results August 20
AQUILA INC.: Reports Net Loss from Continuing Operations
BRITISH AIRWAYS: Gets Green Light to Open Flights to Iraq
BRITISH SKY: Back in Black with GBP260 Million Profit
CABLE & WIRELESS: Terminates Key Executive
SAFEWAY PLC: Asda's Secret Proposal Delays Commission's Report
WEST 175: Fails to Strike Deal with Lenders, Suspends Trading
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C R O A T I A
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VIKTOR LENAC: Major Shareholder Injects US$1 Mln to Save Firm
-------------------------------------------------------------
Majority shareholder Giancarlo Zacchelo of Croatia's struggling Viktor Lenac
shipyard will pump US$1 million into the company this month in an effort to
thwart bankruptcy.
Bluebull news agency, citing a statement by Ljubo Jurcic, the Croatian
Economy Minister, said the amount will be given in two portions: the first
half on August 13 and the other half by the end of the month.
Several discussions between the economy ministry and the shipyard's union
representatives and management have occurred. These gave way to a decision
that the shipyard's employees will get HRK3.3 million in salaries on August
13; each worker will receive HRK3,000, with some extra HRK3,000 per worker
to be handed out in September.
Meanwhile, Bluebull reported that the Government will activate the US$7.3
million state guarantee for the Marica platform. The entire will be used
for financing the new project. Another US$1.8 million unused previous
guarantee could also be activated. This brings the overall amount granted
by the Croatian government to the shipyard to US$67 million. The shipyard
is one of the major ship repair/conversion/offshore shipyards in the
Mediterranean.
CONTACT: Shipyard "VIKTOR LENAC" d.d.,
Martinscica bb, P.O. Box 210
HR - 51001 Rijeka, Croatia
Phone: +385-51-405555
Fax: +385-51-217033
E-mail: viktor.lenac@lenac.hr
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C Z E C H R E P U B L I C
===========================
CK FISCHER: Czech Airlines Drops Claims Against Troubled Rival
--------------------------------------------------------------
Czech Airlines, which is allegedly owed some CZK50 million by Fischer Air,
sold its claims against the company to Atlantik FT, Interfax said, citing a
spokesman from the Czech Airlines.
Spokesman Daniel Plovajko refused to specify the conditions of the deal, but
said Czech Airlines, accepted the same measure as the Czech Airports
Authority and Fischer's largest creditor Komercni banka. Fischer reportedly
owes Komercni Banka CZK400 million, and Czech Airports Authority CZK50
million.
According to Mr. Plovajko, Czech Airlines will withdraw the petition for
distraint it filed against Fischer Air. The cancellation of the distraint
was a condition for Atlantik FT's financial entry into Fischer-controlled
companies.
Fischer's spokeswoman Vera Kudynova confirmed that Atlantik will be allowed
to acquire stakes in all three of Vaclav Fischer's companies, namely CK
Fischer a.s., Fischer s.r.o., and Fischer Air. She, however, did not
specify, the amount of the planned acquisition. Atlantik spokeswoman Dagmar
Adamcova also did not disclose any details, according to the report.
Atlantik FT's owner is oil and gas magnate Karek Komarek.
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F I N L A N D
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BENEFON OYJ: Fate Depends on Approval of Restructuring Program
--------------------------------------------------------------
As reported earlier, the situation of the company turned critical with the
delays of the sought funding solution. As informed in the bulletins of
early year, the situation evolved through various turns to the effect that
on April 24, 2003, the company filed an application for statutory corporate
re-organization. The draft business plan attached to the application
comprises radical cost cutting measures dimensioned to turn first the cash
flow and then the result positive with the foreseen business operations.
Further, the company debt needs to be re-organized for re-constructing a
legally appropriate equity position within the constraints of the projected
cash margin.
Further, as also reported, due to the delayed processing of the re-org
application, the company requested and was granted extended schedule for the
interim report 1Q2003. The Turku court of first instance decided on June
26, 2003, that the re-organization procedure applied for by the company will
be started on that date. The extraordinary shareholders´ meeting convening
on the same day decided to confirm the financial report of FY 2002 on the
condition that the court will confirm the reorganization program prepared in
the procedure so that the company can again be considered to fulfill the
criteria of a going concern. The same meeting decided also to approve the
proposed debt conversion equity issues in which creditors converted about
EUR4.8 million worth of their receivables into shares and convertible equity
bond loan.
Consequently, the interim financial report of March 31, 2003, published at
the end of June, was also conditional to the confirmation of the re-org
program. Regarding the drafted re-org plan, it comprised two significant
extraordinary asset write-offs. The first one comprised the write-off of
the EUR5.8 million capitalization of the R&D expenditures of the new mobile
telematics product platform. This because the completion of the development
of the said product platform had had to be put in hold for the time being.
The second one comprised a EUR2 million write-off of the parts inventory for
the purpose of valuating the parts inventory according to the prudently
projected development of the sales and component consumption in the draft
re-org plan.
The interim financial report of June 30, 2003, is also conditional to the
confirmation of the re-org program. In this financial report, in addition
to the write-offs in the previous interim report 1Q2003, a further write-off
of EUR0.5 million of the parts inventory has been made for the purpose of
fine-tuning the inventory value. In addition, it contains also re-org
process related extraordinary expense write-offs and reservations with a
total worth of about EUR1.3 million.
The company has realized a sharp cost cutting including the implemented
temporary forced leaves as a result of the industrial co-operation procedure
that ended in May. The situation has naturally interfered with the
operations but the company has nevertheless succeeded in keeping crucial
business operations and customer service functions running. New products
have been developed and brought to market, through which the company seeks
to grow the sales and the value added of the sales. Continuing reduction of
the material inventory is an essential part of the cashflow plan. The cash
situation of the company has nevertheless stayed very tight.
Development of the business
The business of the company is to offer mobile telematics terminals,
software and solutions for securing lives and property and for improving
field management.
The safety and field management solutions of Benefon carry a competitive
advantage from their in-built capability for global wide area operation at
low acquisition and operating cost. Often they are also the only available
practical solution to the needs of the customer. For shortening the sales
cycle it is essential that, in addition to terminals and software products,
Benefon now can offer, as needed, also total solutions to business
customers.
New products brought to the market in the second quarter are:
(a) New Benefon Trackbox terminal for machine-to-machine (M2M)
communications and vehicle and asset tracking;
(b) Benefon TrackKeeper terminal for mobile asset management;
(c) Benefon Life Line control center software for security
applications including street maps for Europe and North
America
(d) Field management encryption solution for exacting security
and official applications.
In the beginning of year 2003, an acquisition offer was made for Ismap SA.
In the offer, the company offered altogether 400,000 shares for the whole
stock of Ismap in a share swap. Nearly all Ismap shareholders accepted the
swap offer, which was intended to be realized in February, but which was
left waiting for the funding solution of Benefon.
The very tight financing situation of the company impeded the sales in an
essential manner even though the company has managed to secure customer
service and product deliveries. Nevertheless, the sales in April-June
increased 5% from the sales in the previous quarter due to the increase of
mobile telematics and NMT sales, whereas the sales of GSM phones decreased
to an insignificant level. The gross sales margin grew 9 % from the
previous quarter.
Financial performance in the period
The net sales in 2Q2003 were EUR1.7 million whereas in the preceding quarter
1Q2003 they were EUR1.6 million and in the same quarter 2Q2002 a year before
they were EUR3.7 million. The small increase in the sales came from the
growth of mobile telematics and NMT sales whereas the GSM phone sales were
reduced to almost nil. In addition to the sales income, the company
received in the reported period EUR1.8 million of other income, mostly from
the EDC agreement and from the received partial waiver of an R&D loan by
TEKES. The tight financial situation of the company interfered with the
sales.
The operating result in 2Q2003 before extraordinary items was
-EUR1.1 million. The comparable figure in the previous quarter 1Q2003
was -EUR2.0 million and the same in the same quarter 2Q2002 a year before
was -EUR4.0 million. As detailed in the beginning, this interim report
includes extraordinary one-time charges for about EUR1.8 million and
extraordinary income for about EUR0.7million, booked from 2Q2003, after
which the actual operating profit was -EUR2.2 million. This includes for
two months the other operating income and R&D service purchases from the EDC
agreement. It should also be noted that, in the new situation, R&D
expenditures have not been capitalized after the end of last year.
The net result in the period 2Q2003 was -EUR2.5 million.
The total of the balance sheet at the end of 2Q2003 was EUR15.3 million.
The total of the balance sheet at the end of the previous quarter 1Q2003 was
EUR15.4 million and at the end of the same period 2Q2002 a year before it
was EUR28.1 million. The amount of shareholders' equity at the end of
2Q2003 was -EUR4.2 million, i.e. -27 %, when at the end of 1Q2003 it
was -6.4, i.e. -41% of the total. The interest-carrying net debt was EUR7.2
million. The total liabilities at the end of the period were EUR19.4
million, when they were EUR21.8 million at the end of the prior quarter
1Q2003 and EUR22.2 million at the end of the same quarter 2Q2002 a year
before. Of the total liabilities at the end of 2Q2003, long-term
liabilities were EUR1.0 million and current liabilities EUR18.4 million.
Cash at hand and in the banks at the end of the period was EUR0.2 million
and the financing situation stayed very tight.
Report on sufficient liquidity in period June 2003 to June 2004
The account on the sufficient cashflow provided hereinafter is based on the
prepared re-organization plan whereupon a standing presumption is the
approval of the re-organization program.
The account does not assume new equity but is based on cost-cutting measures
and, further, on sharp focusing on business producing cash flow and profit
already in short term and, furthermore, on continuing reduction of
inventories. The sales income making a central element of the operating
result, the starting point of the account, has been assessed prudently in
the account but the monthly sales are estimated to gradually increase in the
next 12 months.
The account takes no standpoint regarding the change of loans or actual
re-organization debt during the period, being part of the re-org program.
However, no new non-interest bearing debt is assumed.
Cashflow account of period July 2003 to June 2004
Operating result before extraordinary items -1.5
Depreciations 0.6
Reduction of current receivables 0.5
Reduction of inventories 2.3
Change of non-interest bearing debt -0.3
Paid interests -0.3
Investments -0.5
Paid share issue 0.0
Extraordinary income 0.0
Change of interest bearing debt 0.0
Change of cash at hand 0.8
Should the sought re-organization program or other development deviate from
current information, it may substantially affect the construed cashflow
account.
Investments
The total investments in the period were EUR0.0 million.
Personnel
The number of employed personnel in the period 2Q2003 averaged 147. At the
end of the period the number of personnel was 144 when at the end of the
prior quarter 1Q2003 it was 151 and at the end of the same quarter 2Q2002 a
year before it was 327.
Special measures for improving the finances
The drafted re-org plan is based on radical cost-cutting measures through
e.g. forced leaves of the personnel and hard cost control by means of which
the company already in June 2003 reached about 50% lower level of fixed
monthly costs compared with the actual cost level of the early year, and on
strict concentration in measures producing cash flow and result already in
short term and, further, on continuing reduction of the parts inventory.
Future outlook
The future outlook depends in a decisive manner on the confirmation of the
re-org program construed in the re-org procedure started in June 26, 2003.
The confirmed re-org program prescribes positive cash flow and that the
company will reach also positive result and, further, that the debt is
re-arranged within the payment margin in a way resulting in the
shareholders' equity meeting the legal requirements. The core of the draft
re-org plan consists of the significant reduction of the costs and of the
gradual increase of the sales. The company is also seeking a moderate
amount of equity funding for increasing the cash margin even if the drafted
re-org plan does not presume such additional funding. In this regard, as
also reported, the company announced in June it has initiated the
preparations of a new share issue to be offered to all shareholders with the
targeted amount of EUR1-2 million and with target schedule of August.
For the eventuality that the re-org program proposal to be submitted soon
would include a new opportunity to creditors for equity conversion of their
debt, the Board has resolved to postpone the decision about the all
shareholders' issue and will return to the matter after the re-org proposal
and the interest of creditors in the equity conversion is known.
Equity issue authority of the board
The ordinary Shareholders' Meeting of May 21, 2003, authorized the Board of
Directors, within the time limit of one year from the meeting granting the
authorization, to decide on the increase of share capital by rights issue,
issue of options or convertible bonds in one or more installments such that
in the issue of convertible bonds or options or in the rights issue, in
total a maximum of 2,010,760 new investment shares with a book parity value
of EUR0.34 (not the exact value) per share, shall be entitled to be
subscribed for. The share capital may, based on the authorization,
therefore be increased by a maximum of EUR676,371.12.
The authorization includes the right to deviate from the pre-emptive right
of the shareholders, referred to in Chapter 4, Section 2 of the Companies
Act, to subscribe for new shares, convertible bonds or options and the right
to decide on prices of the subscriptions, those entitled to subscription,
the terms and conditions of the subscription and the terms and conditions of
the convertible bonds and options. The authorizations may be used in
deviation from the shareholders' pre-emptive right provided that there is a
weighty financial reason from the company's point of view, such as financing
of corporate acquisition or other arrangement relating to the development of
the company's business operations or strengthening the company's balance
sheet, to do so. When the share capital is increased by a rights issue on
other basis than convertible bonds or options, the Board of Directors is
authorized to decide that the shares can be subscribed for in kind, using
the right of set-off or on other specific terms.
For the time being, this authority has not been used.
BENEFON OYJ
Jukka Nieminen
President
To See Financial Statements:
http://bankrupt.com/misc/Benefon_First_half.htm
MARTELA OYJ: Difficult Market Continues to Weigh Down Results
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Office furniture markets continued to be plagued by weak demand. Martela's
turnover dipped by 19.2% to EUR49.0 million. The result before
extraordinary items and income taxes was negative at -EUR6.4 million. The
equity ratio was 42.8%. The result for the second half-year is forecast to
improve considerably as a result of the cost cuttings but may still be at
loss.
Markets
Weak demand continued to characterize the office furniture markets in all
the main market areas. Declining economic growth and uncertainty about a
turn for the better have been reflected in low investment ratios and low
levels of demand for office furniture. No improvement is expected before
there are clear signs of a revival in economic growth.
Group structure
Martela Oyj's subsidiaries in Germany and the U.K. were disposed of in May,
2003. Martela GmbH was sold to the operating management. The company will
represent Martela on the German market as before. Martela Plc was sold to
Ofquest Ltd., an English subsidiary of the listed investment firm, Gartland
Whalley and Barker Corporate Finance Ltd. Martela's products will continue
to be sold on the U.K. market through both Martela Plc and the sales
channels of the new owner. Martela retains a less than 20% interest in both
of the divested companies. Their income statements are included in the
Martela Group income statement for January-March and the non-recurring costs
arising from the re-arrangements are included in extraordinary items.
These companies had a combined turnover of approximately EUR1 million in
January-March 2003 and employed a total of 24 people at the end of March.
Turnover
The Group's turnover dropped by 19.2% due to the continuing slump in the
markets. Turnover in January-June was EUR49.0 million (60.6). Sales
declined in all the main market areas.
Turnover by main market area (EURmillion)
1-6/2003 1-6/2002 Change %
EURmill. % EURmill. %
Finland 33.2 66.8 39.5 64.4 -15.9 %
Scandinavia 11.4 22.9 15.6 25.3 -26.9 %
Europe 4.3 8.6 5.3 8.7 -19.5 %
Other regions 0.8 1.7 1.0 1.6 -12.6 %
Group total 49.8 100.0 61.4 100.0 -18.9 %
Quarterly invoicing
3/01 4/01 1/02 2/02 3/02 4/02 1/03 2/03
Invoicing 33.5 35.8 30.7 30.7 28.3 32.7 25.3 24.4
Result
The January-June result before extraordinary items and income taxes
was -EUR6.4 million (-5.3). The loss was due to the low invoicing level.
The result before extraordinary items and taxes for the second quarter was
2.3 million at loss. The improvement compared with the first quarter was
due to adaption measures and reductions in staff expenses. The net result
for January -June was -7.5 million (-5.2). The second quarter result was
burdened by an extraordinary item of EUR1.2 million booked as sales losses
and special costs arising from the divestment of the German and English
subsidiaries.
Quarterly result before extraordinary items and income taxes
3/01 4/01 1/02 2/02 3/02 4/02 1/03 2/03
Result 0.7 -0.6 -1.8 -3.4 -2.5 -4.2 -4.1 -2.3
The last quarter of 2002 was burdened by non-recurring
amortization of goodwill and value adjustments amounting to EUR1.4 million.
Investments
Investments totaling EUR0.3 million (1.9) were made in January-
June. Investment activities were restricted because of the weakening of
internal financing. They were mainly focused on the production machinery
and IT of Martela Oyj and Martela AB.
Product development
The development of new products and services has continued as planned and a
host of new products have been launched-particularly products for conference
and meeting facilities.
Staff
Staff reductions have been continued in response to weak demand and the
loss-generating operations.
The Group employed an average of 806 people (959) in January-June, a
reduction of 16%. At the end of June, the Group employed 802 people, 54
fewer than at the beginning of the year. The divested German and English
subsidiaries accounted for 24 of these reductions.
Average staff, by quarter of the year
3/01 4/01 1/02 2/02 3/02 4/02 1/03 2/03
Staff 1052 1040 980 959 945 930 862 806
Invoicing per person, by quarter of the year (EUR1000)
3/01 4/01 1/02 2/02 3/02 4/02 1/03 2/03
Invoicing/pers.31.8 34.4 31.3 31.9 30.0 35.2 29.4 30.3
Finance
The Group's equity ratio at the end of the period was 42.8% (54.7). The
cash assets at the end of period were EUR11.5 million, an increase of EUR0.6
million from the beginning of the year. During the same period,
interest-bearing debt increased by EUR2 million and was EUR22.9 million at
the end of the period.
Outlook for the remainder of the year
According to general expectations economic growth will continue to be slow
and pick up slightly in the second half of this year at the earliest. In
these conditions the market for office furniture will remain weak for the
remainder of the year and possibly well into next year. The number of staff
in the Group will continue to decrease to approximately 740 by the end of
the year. It will then be about 30% less than in the beginning 2001, at
which time the reductions began. Due to the cost-cutting and adaptation
measures carried out, the result for the second half-year will improve
significantly but may still remain at loss.
To See Financial Statements:
http://bankrupt.com/misc/Martela_Interim.htm
Martela Oyj
Board of Directors
Heikki Martela
CEO
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F R A N C E
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ARIANESPACE: Launch of Flight 162 Delayed Pending Verifications
---------------------------------------------------------------
One of the clients for Flight 162 has requested additional verifications on
its satellite. As a result, Arianespace has decided to postpone the
launch -- which originally was scheduled for the night of August 28-29 from
the Spaceport in French Guiana. The launch is now scheduled for the night
of September 3.
*****
TCR-Europe said last month Arianespace is in need of funding to revive the
launching of its Ariane 5 rocket and stay afloat amidst fierce competition
from U.S. rivals Boeing and Lockheed Martin. The firm's 10-ton version of
Ariane 5 exploded shortly after takeoff in December. The failure prompted
the company to say it expects losses of about EUR45 million for last year.
VIVENDI UNIVERSAL: Obligation to Pay Ex-CEO Severance Canceled
--------------------------------------------------------------
As decided at the Board meeting of July 1, 2003, Vivendi Universal
petitioned the Paris Commercial Court on August 11, 2003. The presiding
judge issued two orders authorizing Vivendi Universal to take these
measures:
(a) Firstly, to attach, in an amount up to EUR20.5 million, all
dues owed by the company to Jean-Marie Messier in the
form of severance indemnities non-authorized by the Board of
Directors,
(b) Secondly, to enter into proceedings against Messrs. Jean-
Marie Messier and Eric Licoys, under a fast-track process of
the Paris Commercial Court, for payment of damages in the
same amount as the severance indemnities and associated
costs.
These proceedings are currently under way.
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G E R M A N Y
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BERTELSMANN AG: Merger with Warner Anti-competitive, Say Rivals
---------------------------------------------------------------
Impala, the trade association for independent record labels, has voiced out
its concerns regarding the possible merger of Warner Music and BMG, in
unofficial meetings with E.U. officials, according to the Financial Times.
The association warned competition regulators in Brussels that a partnership
between the two could threaten diversity in the music industry. Warner
Music, part of AOL Time Warner, and BMG, the recorded music arm of Germany's
Bertelsmann, are in talks regarding a proposed 50-50 joint venture that
stands to create the second largest music company next to Universal Music.
According to the report, new figures due next month will show BMG and Warner
Music have a combined market share of 22.4% in Europe and 28.5% in North
America. The combined company could strip out significant marketing,
promotion and distribution costs behind their labels, the report said.
Impala, which represents 1,800 labels with 22% of Europe's record market,
appeared confident after the meetings with the Commission.
The Financial Times quoted Helen Smith, the association's deputy secretary
general, saying: "We were comforted by what we were told and we are
confident that they will agree that music is a market which cannot support
further concentration."
Commission officials, meanwhile, confirmed there were parties who tried to
approach the regulator to fish out its response to the merger plans.
Bertelsmann, BMG's parent company, denied having made any approach to
regulators in Europe or the U.S.
Warner Music, and BMG, both declined to comment, according to the report.
EVOTEC OAI: Reduces Operating Loss by Almost Half to EUR4.9 Mln
---------------------------------------------------------------
Evotec OAI (WKN 566480) revenues grew by 5% in the first six months of 2003
to EUR34.8 million (2002: EUR33.2 million). At constant exchange rates
revenue growth was 16%.
Cost reductions in SG&A and the refocusing of R&D activities initiated last
year led to a decline in our SG&A expenses of 13% and R&D spending of 34%.
Solid revenue growth in concert with these cost savings led to a significant
improvement in the Company's operating loss. For the first six months of
2003 it fell by 33% to -EUR10.3 million (2002: -EUR15.3 million).
Excluding amortization charges, operating losses almost halved (-47%)
to -EUR4.9 million (2002: -EUR9.2 million). EBITDA was positive. It
improved from -EUR3.1 million to EUR0.6 million. Net loss improved by 40%
to -EUR8.2 million (2002: -EUR13.7 million).
Cash, cash equivalents and marketable securities as of June 30, 2003
amounted to EUR 16.3 million. Cash consumption in Q2 2003 was driven by
investments and the build-up of instrument inventory for Pfizer. The strong
inventory build up (EUR 3.9 million) is only a short-term effect, which will
be reversed by sizeable planned instrument sales in the second half of the
year.
Our sales and order book as of July amounted to EUR67 million for 2003,
covering 86% of analysts' revenue expectations for the full year (consensus:
EUR78 million). We expect this to result in a strong third quarter. In
addition to continued good growth in our Discovery and Development Services
Division, significant instrument deliveries to Pfizer are scheduled for
September. On this basis we maintain our guidance for 2003, despite the
continued strong Euro and overall weak business environment in the industry.
Based on current prospects, we are confident of achieving our revenue growth
target of 10 to 15% for the year. By delivering on our cost containment
program, Evotec OAI has achieved positive EBITDA in the first half of the
year and is on track for positive EBITDA for the full year 2003.
CONTACT: EVOTEC OAI
Anne Hennecke
Phone: +49/40/56081-286
E-mail: anne.hennecke@evotecoai.com
MOBILCOM AG: Wireless Biz Back in Black After 11 Losing Quarters
----------------------------------------------------------------
MobilCom AG, Budelsdorf, has succeeded in turning around the earnings
situation in its core business as a wireless service provider: in the second
quarter -- earlier than expected -- this business unit has also moved into
the black, both in terms of the operative earnings before interest, taxes
and depreciation (EBITDA) at EUR13.5 million and of the earnings before
interest and taxes (EBIT) at EUR4.8 million.
For the first time after eleven quarters with an operative loss, the service
provider has thus once again made a positive contribution to Group earnings.
In the two business units Wireless Service Provider and Landline/Internet --
i.e., without UMTS -- the results on the EBITDA basis came to EUR51.9
million in the first half of 2003, although turnover fell to EUR899.8
million (first half of 2002: EUR1,034.2 million). In the comparable period
of the previous year, the Company was forced to absorb a loss of EUR45.6
million. The EBIT loss of EUR221 million in the first half of 2002
resulting from high depreciation costs is now contrasted by earnings of
EUR12.2 million. Group earnings improved correspondingly from -EUR289.3
million in the first half of 2002 to EUR4.1 million in the first half of
2003.
As a consequence of the service provider business, which is once again
substantially profitable, MobilCom is now in a position to finance the
product offensive in the third and fourth quarters primarily from the
earnings from the clientele base -- particularly since it was possible to
stop the negative turnover trend in this business unit: although the number
of customers fell from 4.5 million in Q1 2003 to 4.2 million in Q2 2003,
turnover rose slightly from EUR321 million to EUR329 million. The clearing
of the customer base and the new tariff structure caused the average monthly
turnover per customer to rise to EUR22.0 (Q1 2003: EUR20,2) and the EBITDA
per customer increased from -EUR1.2 to EUR3.0. MobilCom plans to stabilize
the customer basis at the current level through a product offensive. It
must be assumed that there will be a fall in the Group earnings in the
quarterly comparison, especially in Q4, due to the traditionally strong
Christmas business and the accompanying customer acquisition costs.
Issuer's information/explanatory remarks concerning this
ad-hoc-announcement:
But MobilCom reaffirmed the prediction that despite the planned advance
performances for long-term growth -- and the accompanying burden on earnings
in the second half of the year -- there will be a profit on an EBIT basis in
the Group overall for fiscal year 2003. Major key data of the MobilCom
Group in a
quarterly comparison
Accounting principles: IFRS
1.Hj 2003 1.Hj 2002 Q2 2003 Q2 2002
Employees e.o. per. 2,905 5,070 2,905 5,070
Turnover(Mio. EUR) 899.9 1,034.2 446.9 519.9
Service-Provider 650 719 329 368
Festnetz/Internet 250 292 118 144
UMTS 0 0 0 0
EBITDA (m.EUR)adjusted 49.9 -45.6 31.1 -18.8
EBITDA (mEUR)*not adj. 51.9 -170.4 33.1 -49.7
Service-Provider 8.3 -43.0 13.5 -21.5
Fixed/Internet 41.6 43.4 17.6 25.3
UMTS 86.8 -124.9 2.0 -30.9
EBIT (m.EUR)adjusted 12.2 -221.0 12.1 -161.6
EBIT (mEUR)*not adj. 14.2 -358.6 14.1 -198.5
Service-Provider -9.4 -172.4 4.8 -135.7
Fixed/Internet 21.6 15.5 7.3 8.9
UMTS 86.8 -137.6 2.0 -36.9
Group income/loss 4.1 -289.3 3.6 -172.8
Earnings/Share 0.06 -4.40 0.05 -2.63
Net fin.assets/liab.** 77.9 -6,606.1 77.9 -6,606.1
Cash and Cash e. (mEUR) 246.7 96,9 246.7 96.9
Equity Ratio in % 34.8 30.4 34.8 30.4
* Adjustment affects the business unit UMTS and results from the elimination
of a payment from France Telecom which was recorded under Other operating
income. This item is balanced by interest payment of the same amount. But
as this effect would distort the view of the actual earning power of the
Group,
EBIT and EBITDA were adjusted to clear this effect.
**Total of the liquid assets, less bank liabilities and the pension
provisions
NET AG: Breakeven Far Off Despite Liquidity Improvement
-------------------------------------------------------
Net AG, infrastructure, software and solutions(German securities ID No.
786740) has presented its 9-month figures for the current financial year
(October 1, 2002 to June 30, 2003). With liquid resources of EUR3,404,000
net AG's cash on hand was nearly unchanged in comparison with the end of the
year (September 30, 2002). The chief reasons for this pleasing development
were the investment of an international group of investors in the
Communications Technology division, the reorganization of the company's
financing and the sale of the loss-making Project-Based Software Solutions
division. With an equity ratio of 31.2%, net AG continues to be well
situated.
The total turnover of EUR41,359,000 was well over that of the reference
period. The tremendous increase of EUR14,443,000 came from the
Communications Technology division. However, the economic situation, which
remained poor, did not fail to leave its mark on net AG. We were forced to
pocket a turnover decline of EUR1,980,000 in comparison with the previous
quarter. The negative quarterly EBITDA of EUR1,396,000 was caused by a
temporary profit decline of both segments. Discontinued operations in the
area of Project-Based Software Solutions had a negative impact of
EUR1,209,000 on consolidated earnings.
The positive level of incoming orders as well as the turnover figures for
the first weeks of the current financial quarter allow to expect a
significant improvement in fourth-quarter earnings, however, even though it
is not yet anticipate reaching break-even.
Financial year Oct. 1, 2002 Oct. 1, 2001
To to
June 30, 2003 June 30, 2002
Turnover EUR41,359,000 EUR26,916,000
EBITDA -EUR2,530,000 -EUR2,791,000
Consolidated net loss for the year
-EUR9,193,000 -EUR8,459,000
Earnings per share in accordance with DVFA
-EUR0.72 -EUR0.69
PROSIEBENSAT.1 MEDIA: Fitch Affirms 'BB' Unsecured Ratings
----------------------------------------------------------
Fitch Ratings, the international rating agency, has affirmed ProSiebenSat.1
Media AG's Senior Unsecured rating at 'BB' following its acquisition by a
consortium of investors including Saban Capital Group Inc. The Outlook
remains Negative.
The acquisition will remove the uncertainty stemming from the company having
an insolvent and therefore short-term parent in form of Kirch Media. The
stability, deep financial resources and expertise offered by the new
ownership structure should enable management to increase focus on the
operational issues affecting business at the current time. As part of the
transaction the commitment to backstop the capital increase of EUR280
million, previously guaranteed by the Kirch Media administrator and the
Kirch Media banks, is replaced by an equivalent commitment from the new
parent company, ProSiebenSat.1 Holding LP. The execution of the capital
increase is now expected to occur by the early part of 2004 to allow for the
mechanics of the transaction to be completed in advance of this point e.g.
share tender process. Although Fitch does not foresee a failure to execute
the capital increase, it comments that any such failure would be viewed as
credit negative for the company.
The deal excludes the film library to which ProSieben has gained access via
a volume deal signed on June 16, 2003. There is no intention on the part of
the consortium to convert the preference shares to ordinary shares.
The new ownership structure is unlikely to result in a repurchase of
ProSieben's 2009 bonds under the change of control clause. (See credit
analysis dated 21 July for details of the events, which may result in a
repurchase of the 2009 bonds following a change of control) Fitch notes that
the consortium and ProSieben have secured financing to cover such an event.
As previously stated in its press release of June 17, 2003, the agency
continues to monitor the German advertising market, on which ProSieben
remains dependent for 95% of its revenues. Sustained improvement in market
conditions and deleveraging remain critical to the rating. The agency
continues to view the refinancing of the revolving credit facility (maturity
December 2004) and the 2005 and 2006 bonds as further crucial steps in
improving ProSieben's capital structure.
QSC AG: Expects Cash-flow Breakeven in First-half Next Year
-----------------------------------------------------------
According to preliminary results, Cologne-based QSC AG increased its
revenues by 136% to EUR28.3 million for Q2 2003 (Q2 2002: EUR12.0 million).
The revenue increase is primarily due to ongoing order growth from business
and project customers, as well as due to the first time effects of the
consolidation of voice carrier Ventelo, which was acquired in late 2002. In
the first half of 2003, QSC grew its revenues by 160% to EUR55.9 million (H1
2002: EUR21.5 million).
QSC succeeded in reducing its EBITDA loss by more than 50% in Q2 2003.
According to preliminary results, it amounted to -EUR7.2 million, (Q2
2002: -EUR14.9 million). This significant improvement is mainly
attributable to the growth in high-margin services to business and project
customers, as well as to the synergy effects resulting from the Ventelo
integration. The EBITDA loss for the first half of 2003 amounted to
EUR-17.2 million (H1 2002: EUR-31.2 million).
For the ninth time in a row, QSC recorded a quarter-to-quarter reduction in
its net cash outflow: From -EUR10.9 million in Q1 2003 to -EUR8.6 million in
Q2 2003. QSC anticipates that its average cash burn in 2003 will decline by
at least EUR2 million per quarter. As at June 30, 2003, cash and cash
equivalents totaled EUR68.1 million.
The positive development of the operating business during the first half of
2003 has prompted QSC to raise the full year guidance it had announced last
February for the current fiscal year. The company is now forecasting annual
revenues of over EUR115 million, as opposed to its previous guidance of
EUR105 to 115 million. On the basis of the updated plan, QSC expects an
annual EBITDA loss better than -EUR25 million; up until now, QSC had
anticipated an EBITDA loss of between -EUR25 million and EUR30 million for
the full year 2003. Given the steady reduction in cash burn, QSC expects to
reach the cash flow breakeven point ahead of schedule, during the first half
of 2004; previous guidance had indicated that the company would reach this
breakeven point sometime during the course of the year 2004. QSC continues
to plan on reaching the EBITDA breakeven point during the course of Q4 2003.
The half-year report of QSC AG is available from August 26, 2003, at
http://www.qsc.de
CONTACT: QSC AG
Arne Thull, Investor Relations
Phone: +49(0)221-6698-112
Fax: +49(0)221-6698-009
E-Mail: invest@qsc.de
WEDECO AG: Second Quarter Revenues Surge 49.2%
----------------------------------------------
In contrast to the expected weak first quarter, revenue rose in the second
quarter of 2003 by 49.2% to EUR37.0 million. WEDECO
AG Water Technology thus generated consolidated revenue of EUR61.8 million
(first half 2002: EUR62.1 million) in the first half of 2003. At EUR32.6
million, revenue in the UV Disinfection segment was EUR0.3 million above the
comparative figures of the previous year. The Ozone Oxidation segment
generated EUR29.2 million, EUR4.1 million (16.3%) more than in the first
half of 2002.
The spare parts and service business included in the above-mentioned revenue
increased by 16.2% to EUR16.5 million compared with EUR14.2 million in the
same period of the previous year. The Solar segment, which was sold at the
end of 2002 contributed EUR4.7 million to the consolidated revenue in the
first half of 2002.
In the second quarter of 2003, a positive operating result (EBIT) of EUR2.0
million was once again achieved. The EBIT of the first half of 2002
was -EUR3.0 million. At EUR3.9 million, EBITDA of the second quarter of
2003 is above the comparative figure for 2002 (EUR3.7 million). In the
first half-year,
EBITDA reached EUR0.8 million (UV: EUR-0.5 million/ozone: EUR1.3 million).
The consolidated net income of the second quarter is EUR0.7 million. For
the first half of 2003, the Group reports a consolidated loss of -EUR2.8
million.
Earnings per share reached -EUR0.25, after EUR0.22 a year ago. All figures
for the first half-year include the non-recurring expenses totaling EUR3.0
million relating to the merger negotiations with a competitor. The
operating cash flow is positive, standing at EUR2.4 million, compared
with -EUR1.9 million in the first half of 2002.
In the second half of 2003, several large-scale projects are being
delivered. At the end of June, the order backlog totaled EUR57.9 million
(prior year: EUR49.5 million); of which EUR39.0 million will be recognized
as revenue in 2003.
In July, new projects totaling EUR10.2 million were acquired for delivery in
2003. Trailigaz, which was consolidated on July 1, brings with it
additional projects and services of over EUR8.3 million. The business with
medium and small-scale UV and ozone systems as well as spare parts and
services has also picked up. The ongoing after-sales business is to
generate an additional EUR17.5 million by year-end 2003 and EUR10 million
will be attributed to small appliances. On the basis of this data, 2003
annual revenue are set to stand at EUR160 million and the net income for the
year at EUR6.0 million.
Management Board
=============
H U N G A R Y
=============
IRISBUS GROUP: Shuts down Szekesfehervar Manufacturing Plant
------------------------------------------------------------
The difficult Russian market claimed another victim as Irisbus Group, the
busmaker that emerged from the merger of Fiat-Iveco Group and the Renault
Group in 1999, announced the closure of its Ikarusbus manufacturing plant in
Szekesfehervar.
According to Bluebull, Irisbus blamed the move on the lack of domestic
demand and on the declining Russian market. The firm revealed that the only
major foreign order for the year was a hundred chassis.
Last year, only 280 buses were made in Szekesfehervar, from which 180 pieces
were exported to Romania, Tunisia and Russia. There have been no orders in
2003 because major regional bus operator Volan companies are not interested
in the company's suburban bus model.
The Volan companies divulged that the 3.5-year-old model of Irisbus is not
up-to-date any more and Western branded vehicles, such as Mercedes and MAN,
are cheaper and maintenance costs for its products are also lower.
The 200 workers of the Ikarusbus plant will be made redundant, as future
production will be concentrated in Irisbus Budapest factory.
The Irisbus group wants to close the Budapest administrative center as well.
CONTACT: IKARUSBUS
H 1134 Budapest
Vaci ut 37 (Hungary)
Phone: + 36 12373700
Fax: + 36 12373709
IRISBUS (HEADQUARTER)
Parc Technologique de Lyon Bat.
B9-9 Alee Irene Joliot Curie
69806 Saint Priest - Lyon - France
Phone: + 33 472 796500
KERESKEDELMI ET HITLELBANK: Watchdog Censured for Delayed Action
----------------------------------------------------------------
Hungary's financial watchdog PSZAF received further criticism from the
ministry of finance over its control of the financial activities of K&H, the
brokerage firm involved in an embezzlement scandal.
The ministry quoted the regulator's own report on its investigation on the
K&H case saying that the watchdog may have known about illegal methods being
used at K&H for a long time. The brokerage used the "double registry
system" in 1998, the report found out. This was used as the private
registry of broker Attila Kulcsar, who the ministry said used falsified
documents to certify his qualifications. The regulator noted deficiencies
in the system again in 1999 but failed to stop the practice. Earlier, a
government spokesperson said the regulator could have prevented the
embezzlement case for a year before it broke out.
In a statement, the ministry also said PSZAF was aware of Kulcsar's
assumption of a false identity since July 2002. It further noted that PSZAF
came to the conclusion that the issue of the double registry system had been
addressed even if K&H did not state that the IT system problems had been
addressed specifically when the brokerage launched its new, integrated IT
system.
In response PSZAF said it made typographical error on its report, and
claimed knowledge of the falsified documents only in July 2003 and not 2002.
The regulator also denied knowing that an earlier version of the IT system
at K&H Equities functioned as Kulcsar's private registry. It said it was
limited to monitoring officially working systems and it trusted the
statements of the auditor and the IT companies providing K&H's IT system
when it made an investigation in 2002 that the systems of K&H Bank and K&H
Equities functioned in line with the law. It said it learned of the nature
of the system also in July 2003 only.
KERESKEDELMI ES HITELBANK: Sues Broker for Laundering Money
-----------------------------------------------------------
The findings of an internal investigation at K&H Equities has prompted K&H
Bank, its 49.9% owner, to file charges of suspected money laundering against
broker Attila Kulcsar, according to Budapest Business Journal.
The investigation, which was done after the discovery of an embezzlement
scandal at K&H Equities, discovered that amounts missing from the affected
clients' accounts may have been transferred to their final destination
through offshore companies, using fraudulent transfer orders and securities
purchase contracts, the report said.
The embezzlement case may have left 60-70 clients with financial damages
that may total HUF10 billion, according to the communications department of
financial watchdog PSZAF. K&H Bank promised to continue to cooperate with
authorities during the investigation process.
PSZAF has instructed K&H Equities to conduct account reconciliation
procedures with all clients by August 31. K&H Bank said it is likely to
complete the process by that date at the latest. The reporting of the
results to the regulator is due September 10. AMRO Bank owns 40.23% of K&H
Bank, and 50.1% of K&H Equities.
KERESKEDELMI ES HITELBANK: Refers Clients to Rival
--------------------------------------------------
K&H Equities has already agreed to transfer its business transaction to
another brokerage, K&H informed Interfax-Europe. The report, however,
failed to disclose the name of the company that would take K&H Equities'
clients.
The Watchdog State Supervision of Financial Organizations suspended earlier
the trading rights of Kereskedelmi es Hitelbank Equities until the end of
September. The ruling prohibits the brokerage from providing investment
service, additional investment service, and services for pension funds. At
such, the regulator has instructed the firm to finalize ongoing transactions
with clients until August 31, and to report the results of this to the
watchdog until September 10.
K&H Equities is only allowed to trade in order to close clients' derivative
positions on the derivative market, and (re)invest its own assets on the
prompt market, according to the report. K&H is also allowed to transfer
clients' assets to any other brokerage at clients' request with the costs to
be paid by the brokerage.
=====================
N E T H E R L A N D S
=====================
HEAD N.V.: First-half Operating Loss Balloons to US$18 Million
--------------------------------------------------------------
Head N.V. (NYSE: HED; VSX: HEAD), a leading global manufacturer and marketer
of sports equipment, announced its results for the three months and six
months ended June 30, 2003.
For the three months ended June 30, 2003 compared to the three months ended
June 30, 2002:
(a) Turnover increased 8.7% to US$79.2 million
(b) Operating loss increased from US$3.2 million to US$9.1
million
(c) Net loss per share was flat at $0.25 cents
For the six months ended June 30, 2003 compared to the six months ended June
30, 2002:
(a) Turnover increased by 3.4% to US$152.8million
(b) Operating loss increased from US$5.1 million to US$18.0
million
(c) Net loss per share increased from US$0.34 cents to $0.51
cents
Johan Eliasch, Chairman and CEO, commented:" There has been no recovery from
the tough market conditions experienced in the first quarter of the year,
and the US$ has continued to weaken against the euro.
The prevailing market conditions have put pressure on sales and margins in
local currencies as consumers are purchasing fewer products, and at lower
price points.
The exchange rate movement in the period has resulted in a growth in sales
in our reporting currency, the US$, but has put additional pressure on
profit margins due to the relatively high proportion of our cost base
denominated in euros.
On a positive note, in our Winter Sports division we have seen local
currency sales grow, and although due to the seasonality of the business it
is not an important quarter for the business, it does confirm our belief
that the Intelligence technology has been well accepted in skis. This is
reinforced by our current order book, which is slightly ahead of last years
in a flat market.
The new Liquidmetal tennis racquet, should enhance our technological
leadership and allow us to compete well in the current tough market
conditions. 4 racquets were launched in July 2003 and received good media
and retailer attention. We expect there to be a positive impact on second
half sales in the Racquets Sports division as a result of the launch. "
To view table for Revenues: http://bankrupt.com/misc/HEAD_NV_Revenues.htm
Winter Sports
The first half of the year is a low sales season for our Winter Sports
division, the main focus being the building of an order book for delivery in
the third and fourth quarters. The results are therefore not indicative of
the full year, although we are pleased to report that revenues in Winter
Sports increased by 66.7% in the six months to June 2003 compared to the six
months to June 2002. This increase is due to higher sales of all of our
products, in particular bindings and skis.
The division recorded an improvement in gross margins, up 200 basis points
for the six months to June 2003 compared to the six months to June 2002, due
to higher volumes, this was offset in part by a negative impact due to
exchange rate movements.
The current bookings situation is slightly ahead of the levels achieved at
this time last year, in both volume and value terms, but the actual sales
and margins reported will obviously be dependent on exchange rate movements
in the second half of the year.
Racquet Sports
Racquet Sports sales for the six months to June 30, 2003 decreased by 6%
compared to the six months to June 2002, the decline was in both racquets
and balls and in both units and value. The decline was driven mainly by the
poor market conditions in the US where the market for racquets was down 12%
in value terms in the six months to June 2003 compared to the six months to
June 2002, and the ball market was down by 6% in value terms in the same
period.
We anticipate some recovery of sales in the second half of 2003 as our new
technology -- Liquidmetal -- was launched in early July. Currently bookings
in racquets are slightly behind those achieved at the same time last year,
both in unit and value terms, and branded ball bookings are in line with
those achieved at the same time last year.
There has been pressure on margins due to the general softness in the
premium end of the racquet market, and in particular lower sales of the
higher price point Intelligence racquets due to the anticipated launch of
Liquidmetal. This has been compounded by the weakening of the Japanese Yen.
Overall the gross margin has been reduced by 250 basis points in the first
half of 2003 compared to the first half of 2002.
Diving
Diving revenues for the six months ended June 30, 2003, increased by 3.1%,
from the comparable 2002 period, with a growth of 12% being achieved in the
quarter to June 2003 compared to the June 2002 quarter. The stronger growth
in the second quarter compared to the first is due in part to the delay in
deliveries in March 2003 detailed in our first quarter press release. The
overall growth for the six-month period is due primarily to the
strengthening of the euro.
The gross margin of the diving Division has declined by 280 basis points
during the six months to June 2003 compared to the six months to June 2002
due in part to the strengthening of the euro and in addition to the sale of
out of line stock in the U.S.
Overall we have seen no improvement in the diving market, and current
bookings levels are slightly behind those achieved at the same time last
year.
Licensing
The Licensing division's revenues have increased 13.0% for the six month
period to June 2003 compared to the period to June 2002, although the last
three months to June 2003 compared to June 2002 showed a decline. The
recording of revenues in the licensing division is based on receipts, and so
the reported numbers are affected by timing differences.
During August, we switched our Sportswear licensee in Europe which will take
effect with a new winter collection for the '04/05 season and a full new
summer collection in 2005.
Overall we expect the Licensing division's income to be in line with that
achieved last year.
Profitability
Gross margin decreased to 36.3% for the six month period to June 2003 from
39.8% in the comparable 2002 period due to the impact of the continued
weakening of the US$ and Japanese Yen against the euro, and pressure on
prices due to the tough market conditions.
In the same period, selling and marketing expenses increased by $6.9
million, or 14.4% due to exchange rate effects on these predominantly euro
costs, timing differences on advertising expenses and an increase in
allowances against receivables.
General and administrative expenses increased by US$2.7 million or 17.7% in
the six month period to June 2003 compared to the six month period to June
2002. The increase was entirely due to exchange rate effects on these
predominantly euro denominated costs.
As a result of the foregoing factors, operating losses for the six months
ended June 30, 2003 increased to US$18.0 million from US$5.1 million in the
comparable 2002 period.
The decision in January 2003 to reclassify non-euro denominated
inter-company accounts receivable to a permanently invested inter-company
receivable has had the effect of reducing the foreign exchange gains/losses
recorded in the profit and loss account in the period under review. A small
gain was recorded in the six months to June 2003 compared to a US$4.8
million loss in the comparable period in 2002.
The increase in the interest expense of US$1.4 million in the six months to
June 2003 compared to the six month period to June 2002 is due to exchange
rate effects, in particular in the euro denominated bond as well as due to
new long term financing agreements that the Company has entered into.
The net impact of the operating performance and the exchange rate movements
resulted in our earnings per share declining from (US$0.34) to (US$0.51) for
the six months ended June 30, 2003 compared to the six-month period ended
June 30, 2002.
2003 Outlook
Given the current market conditions, we still remain cautious about our full
year financial results and retain the view given during the first quarter
2003 conference call that we believe our results will be below those
achieved in 2002.
To view Consolidated Results:
http://bankrupt.com/misc/HEAD_NV_Consolidated_Revenues.htm
About Head
Head NV is a leading global manufacturer and marketer of premium sports
equipment.
Head NV's ordinary shares are listed on the New York Stock Exchange and the
Vienna Stock Exchange.
Our business is organized into four divisions: Winter Sports, Racquet
Sports, Diving and Licensing. We sell products under the Head (tennis,
squash and racquetball racquets, alpine skis and ski boots, snowboards,
bindings and boots), Penn (tennis and racquetball balls), Tyrolia (ski
bindings), and Mares/Dacor (diving equipment) brands.
We hold leading positions in all of our product markets and our products are
endorsed by some of the world's top athletes including Andre Agassi, Marat
Safin, Gustavo Kuerten, Marco Buechel and Francisco "Pipin" Ferreras.
For more information, please visit our website: http://www.head.com
CONTACT: HEAD N.V.
Clare Vincent, Head of Investor Relations
Phone: +44 207 499 7800
Fax: +44 207 491 7725
E-mail: htmcv@aol.com
Ralf Bernhart, Chief Financial Officer
Phone: +43 1 70 179 354
Fax: +43 1 707 8940
VERSATEL TELECOM: Settles Liability to German Business Partner
--------------------------------------------------------------
Versatel Telecom International N.V. announced an agreement to settle a
long-term liability of approximately EUR12 million with a leased fiber
provider in Germany. According to the agreement, Versatel shall pay EUR3.2
million by issuing 2,147,651 freely tradable Versatel shares. In addition
to the reduction of the liability, the provider agreed to reduce the annual
operations and maintenance payments associated with the leased fiber by
EUR50,000 per year for the next 5 years.
Versatel Telecom International N.V. (Euronext: VRSA). Versatel, based in
Amsterdam, is a competitive communications network operator and a leading
alternative to the former monopoly telecommunications carriers in its target
market of the Benelux and Germany. Founded in October 1995, the Company
holds full telecommunication licenses in The Netherlands, Belgium and
Germany and has over 1 million customers and over 1,469 employees. Versatel
operates a facilities-based local access broadband network that uses the
latest network technologies to provide business customers with high
bandwidth voice, data and Internet services. Versatel is a publicly traded
company on Euronext Amsterdam under the symbol "VRSA". News and information
are available at http://www.versatel.com
CONTACT: VERSATEL
AJ Sauer
Investor Relations & Corporate Finance Manager
Phone: +31-20-750-1231
E-mail: aj.sauer@Versatel.nl
Anoeska van Leeuwen
Director Corporate Communications
Phone: +31-20-750-1322
E-mail: anoeska.vanleeuwen@versatel.nl
WOLTERS KLUWER: Benchmark Ordinary Net Income Down 26%
------------------------------------------------------
Wolters Kluwer released this first-half results recently. These are the
highlights:
(a) First half results affected by currency, continued economic
slowdown, divestments of non-core activities and investments
in restructuring programs for future growth;
(b) Benchmark ordinary net income of EUR120 million. Adjusted
for currency, the benchmark declined 26% over the first half
(compared with a 31% decline over the first quarter of
2003);
(c) Ordinary free cash flow increased by EUR32 million due to
strong emphasis on working capital control; net debt reduced
by 29%;
(d) Significant cost reduction program targeted for full year of
at least EUR70 million;
(e) Revenues EUR1,609 million; electronic revenues increased to
34% of total continuing revenues. Operating income (EBITA)
EUR230 million.
Outlook
Outlook full year 2003: Stronger second half, but benchmark ordinary net
income at constant currency expected to be significantly below that of last
year.
Near term actions
(a) Restructuring programs aimed at quality, efficiency and cost
improvements, while maintaining investment levels in new
product development;
(b) Plans are underway to leverage solid market positions to
gain benefits in second half and thereafter;
(c) Strategic update from the new Chairman Executive Board on
October 30, 2003.
EUR million HY 2003 HY 2002 Change Change at constant
currencies
Revenues 1,609 1,917 -16% -6%
EBITDA (1) 283 408 -31%
EBITA2 230 347 -34% -24%
EBITA margin % 14 18
Ordinary net income 120 194 -38% -26%
Net income -0.115 (2) 32
EPS (3) 0.42 0.66 -36%
Ordinary free
cash flow 74 42 76%
Ordinary free cash flow per share
'fully diluted' 0.23 0.15 53%
Average number
of FTEs 19,701 20,132 -2%
1 Benchmark ordinary net income before amortization intangible fixed assets
and exceptional items
Before exceptional items
2 After EUR155 million impairment charge (before tax)
3 Ordinary EPS before amortization of intangible fixed asset, based on
weighted average number of shares 'fully diluted'
EUR % change EUR % change EUR % change
million million million
HY 2002 1,917 347 194
Organic -64 -3 -65 -19 -43 -22
Acquisitions 51 2 5 2 3 1
Divestments -95 -5 -24 -7 -10 -5
Currency -200 -10 -33 -10 -24 -12
HY 2003 1,609 -16 230 -34 120 -38
Rob Pieterse, Chairman of the Executive Board of Wolters Kluwer, commented:
"We have indicated during the year that 2003 would be challenging. Current
market circumstances reinforce this with trading conditions difficult and
currency working against us. Nevertheless, much has been achieved --
financial controls and reporting have been tightened, net debt reduced, cost
controls and the restructuring program accelerated, all of which will
produce benefits from the second half onwards.
Looking further ahead, the new executive team will seek to capitalize on the
valuable market positions that Wolters Kluwer has built and therefore looks
forward to the future with confidence."
===========
N O R W A Y
===========
PAN FISH: Atle Eide to Replace Barmen as Managing Director
----------------------------------------------------------
With effect from August 1, 2003 Atle Eide will take over as managing
director of Pan Fish Norge AS, in addition to continuing as CEO of the Pan
Fish ASA group. Atle Eide, who will fill the position for an undefined
period of time, succeeds Arne Barmen, who will retire after having
collaborated with the CEO on the groundwork for a new strategy and
organization for Pan Fish Norge, and for Pan Fish globally.
Along with Atle Eide, Pan Fish Norge AS' management group will consist of
Kenneth Brandal (responsible for aquaculture), Bjorn Vagsholm
(harvesting/packing/processing), Dag Ryste (sales), Karl Peder Lillebo
(finance/accounts) and Oyvind Torlen, who will deputize for the managing
director and be in charge of implementing the change process.
CONTACT: PAN FISH ASA
Atle Eide, CEO
Phone: +47 70116100/ +47 91152977
PAN FISH: Business Reorganization to Entail Job Losses
------------------------------------------------------
The business will be run according to an integrated model, with a combined
unit for farming, harvesting/packing and sales. The company will keep its
local sales offices in selected markets. As a consequence of the merging of
a number of companies into Pan Fish Norge AS, plus the considerable
reorganization of the company, it has been decided to reduce the number of
employees by about 20. The possible winding up or sale of businesses will
involve further staff cuts (in addition to Pan Pelagic) of 160 persons.
This reduction in the number of employees will represent considerable
savings in the next few years.
CONTACT: PAN FISH
Atle Eide, CEO
Phone: +47 70116100/+47 91152977
PAN FISH: Considers Sale of Companies Under Reorganization
----------------------------------------------------------
As a step in the rationalization process in the Pan Fish group, negotiations
will be opened with potential buyers of the Pan Fish packing station at
Skarholmen in Hordaland. Both a direct sale and the option of a lease with
a view to subsequent acquisition will be discussed.
A dialogue will also be opened with potential buyers for the acquisition of
the subsidiary group Vikenco. Vikenco, has been making a profit since 1989
and is one of Norway's leading processing businesses. We may decide to sell
a limited number of licenses in connection with a change in ownership of
Aukra Seafood AS. We will also try to sell the Vikomar company.
CONTACT: PAN FISH
Atle Eide
Phone: +47 70116100/+47 91152977
===========
P O L A N D
===========
PETROLEUM-GEO: Tapping Linklaters as Special English Counsel
------------------------------------------------------------
Petroleum Geo-Services ASA is asking for authority from the U.S. Bankruptcy
Court for the Southern District of New York to employ and retain Linklaters
as Special English and International Coordinating Counsel.
The Debtor reports that it engaged Linklaters since September 2002.
Linklaters has served as counsel to the Debtor on myriad issues, including,
financial restructuring, international bankruptcy issues, numerous English
law matters related to the Debtor's finance agreements (primarily bank
facilities and finance leases) governed by U.K. law, and has been primarily
responsible for the coordination of legal matters relating to the Debtor's
debt restructuring initiative.
The Debtor expects that Linklaters, in its role as special counsel, will
continue to provide services to the Debtor respecting issues that arise
under U.K. law and will continue in its role as international coordinating
counsel on legal matters relating to the Debtor's proposed plan of
reorganization.
The Debtor assures the Court that Linklaters is prepared to work closely
with each professional in this case to ensure that there is no unnecessary
duplication of effort or cost. The matters that Linklaters will advise the
Debtor on are limited to issues that may arise under U.K. law. The Debtor
noted that none of the Debtor's other counsel has the background or
expertise to handle U.K. legal issues, which, as a result of the plan of
reorganization to be proposed by the Debtor, will be pertinent to the
conduct of this case. Further, Linklaters will assist in the international
coordination of legal matters implicated in this case.
Joseph Stephen Campion Windsor, a partner in Linklaters disclose that his
firm will charge the Debtor its current hourly rates, which are:
Robert Elliot Partner GBP475 per hour
Jo Windsor Partner GBP440 per hour
Bruce Bell Managing Associate GBP350 per hour
Laura Hensby Associate GBP225 per hour
Petroleum Geo-Services ASA, headquartered in Lysaker, Norway is a
technology-based service provider that assists oil and gas companies
throughout the world. The Company filed for chapter 11 protection on July
29, 2003 (Bankr. S.D.N.Y. Case No. 03-14786). Matthew Allen Feldman, Esq.,
at Willkie Farr & Gallagher represents the Debtor in its restructuring
efforts. As of May 31, 2003, the Debtor listed total assets of
$3,686,621,000 and total debts of $2,444,341,000.
===========
S W E D E N
===========
SONG NETWORKS: Reports Positive Cash Flow, Improved Profits
-----------------------------------------------------------
Song Networks released this first-half results recently. These are the
highlights:
(a) Revenues were SEK1,160 million (1,149 the corresponding period the
previous year). Revenues from high margin services as data and Internet
increased with approximately 15% compared with the first six months of 2002
while low margin services as voice and other decreased. Revenues for the
second quarter of 2003 were SEK581 million (559).
(b) Gross margin before depreciation was 43.1% (40.4). Gross margin before
depreciation for the second quarter of 2003 was 43.5% (40.7).
(c) EBITDA improved the first six months of 2003 to SEK40 million (-80).
EBITDA for the second quarter of 2003 was SEK26 million (-33).
(d) EBIT for the period improved to -SEK61 million (-585). EBIT for the
second quarter of 2003 was -SEK17 million (-286).
(e) Cash flow for the period was SEK296 million (-155). Cash flow for the
second quarter of 2003 was positive with SEK9 million (-236).
(f) Net result for the period was SEK20 million (-2,209).
(g) Result per share for the period was SEK0.40 (-1,332).
(h) Liquid assets amounted to SEK560 million at the end of the period (344),
including restricted cash. Financial net cash amounted to SEK423 million
(-4,914).
CONTACT: SONG NETWORKS
Principal executive office:
Box 712 SE-169 27
Solna, Sweden
Contact:
Tomas Franzen, CEO
Phone: +46 8 5631 01 11
E-mail: tomas.franzen@songnetworks.net
Joachim Jaginder, CFO
Phone: +46 8 5631 01 99
E-mail: joachim.jaginder@songnetworks.net
Gustav III:s Boulevard 18
Phone: +46 8 5631 00 00
Fax: +46 8 5631 01 01
Home Page: http://www.songnetworks.net
=====================
S W I T Z E R L A N D
=====================
SWISS INTERNATIONAL: Unit Charters Rival to Deliver Cargo
---------------------------------------------------------
In order to meet a stronger demand for air cargo transport, Swiss WorldCargo
has chartered two dedicated Jumbo full-freighters. Boeing 747 operated by
Evergreen International Airlines Inc. flew from Zurich to New York on July
26 and August 11. This is one of the measures by which Swiss WorldCargo is
offsetting the capacity loss that has resulted from the downsizing of the
SWISS network.
Swiss WorldCargo usually transports its consignments in the belly of SWISS'
fleet. In case large volumes of cargo -- that would not fit the belly
capacity -- need to be shipped to a particular destination, a dedicated
charter freighter can be the solution.
About Evergreen Boeing B747F
Headquartered in the USA, Evergreen International Airlines Inc. is a
specialist in providing airlines with full-freighters on wet lease, ad-hoc
or scheduled basis to meet their peak airfreight needs.
The Boeing 747F (F stands for freighter) has a total airfreight capacity of
some 95 tons. In such aircraft type, the space normally occupied by
passenger seats is used to carry cargo containers.
Support of Unique and Swissport
Swiss WorldCargo's initiative was supported by Unique, the operator of
Zurich Airport, and Swissport International Ltd., ground handling partner.
"All-cargo operations," says Elke Kohler, Manager Cargo Marketing Unique,
"strengthens Zurich airport as an outstanding cargo hub and are very
important for the Swiss foreign trade focused economy."
Such operations, the first ever in SWISS' history, mark another milestone
for Swiss WorldCargo in meeting customers' needs also in turbulent times,
and in contributing with additional revenue to SWISS' overall earnings.
For further information, please visit www.swissworldcargo.com
Swiss WorldCargo is the air cargo division of Swiss International Air Lines
Ltd. With its worldwide network of more than 150 destinations in over 80
countries and its broad range of services, Swiss WorldCargo adds genuine
value for its customers and makes a sizeable contribution to SWISS' overall
earnings results.
Evergreen International Airlines is a division of Evergreen International
Aviation, Inc. of McMinnville, Oregon. Evergreen International Airlines
operates a fleet of 10 747 freighters and 7 DC9 freighters. Evergreen
International Airlines provides air cargo services to other airlines,
freight forwarders, the military and governmental organizations.
For further information about Swiss WorldCargo and interview requests,
contact:
Bernd Maresch
General Manager Marketing, Communications and PR
E-mail: bernd.maresch@swiss.com
Phone: +41 1 564 50 50
SWISS RE: Shareholder Restructuring at Gerling NCM Complete
-----------------------------------------------------------
Swiss Re announces that the shareholder restructuring of Gerling NCM and its
establishment as an independent company has been completed. In addition,
Compania Espanola de Seguros y Reaseguros de Credito y Caucion, SA (CyC) and
Seguros Catalana Occidente, SA de Seguros y Reaseguros, Sociedad Unipersonal
will invest in Gerling NCM and purchase from Swiss Re an option to increase
Sociedad Unipersonal's stake in the company. As part of the agreements,
Sociedad Unipersonal will also take over part of Swiss Re's commitment to
purchase subordinated notes from Gerling NCM.
As a result of the shareholder restructuring which closed on August 11,
2003, Swiss Re owns 47.50% of Gerling NCM, Deutsche Bank 35.32%, Sal.
Oppenheim 7.00% and Gerling Beteiligungs-GmbH 3.04%. CyC, the world's
fourth largest credit insurer, has agreed to purchase a 7.0% stake in
Gerling NCM currently held by a Gerling NCM pension fund. Sociedad
Unipersonal has agreed to purchase from the pension fund its remaining 0.14%
in Gerling NCM as well as an option from Swiss Re to acquire an additional
7.94% in Gerling NCM for EUR 52 million. The CyC and Sociedad Unipersonal
related transactions are subject to regulatory approval.
As part of the shareholder restructuring and in order to bolster Gerling
NCM's capital base, Swiss Re and Deutsche Bank committed to underwrite up to
EUR55 million each of an up to EUR110 million subordinated notes to be
issued by Gerling NCM. Sociedad Unipersonal will now assume Swiss Re's
commitment up to EUR52 million for subscribing to such notes.
In order to establish Gerling NCM as a truly independent company, the new
shareholders have agreed on Atradius as Gerling NCM's new name as well as
changes to the Supervisory Board and Management Board. Paul-Henri Denieuil
has been appointed Interim-CEO of the company while Rudolf Kellenberger,
Deputy CEO of Swiss Re, will act as Chairman of Gerling NCM's Supervisory
Board. In addition, Gerling NCM anticipates the integration of its six
European insurance carriers into a single carrier and the redomiciliation of
the holding company to the Netherlands
Swiss Re
Swiss Re is a leading reinsurer and the world's largest life and health
reinsurer. The company is global, operating from 70 offices in 30
countries. Since its foundation in 1863, Swiss Re has been in the
reinsurance business. Swiss Re has three business groups: Property &
Casualty, Life & Health and Financial Services. Swiss Re offers a wide
range of traditional reinsurance products and related services, which are
complemented by insurance-based corporate finance solutions and
supplementary services. Swiss Re is rated "AA" by Standard & Poor's, "Aa1"
by Moody's and "A++" by A.M. Best.
CyC
With EUR 285.6 million premiums written in 2002, CyC ranks fourth among the
major credit insurance companies. CyC, created in 1929, has since held a
leading market position and a strong financial performance reflected in its
A+ rating from Standard & Poor's and Aa3 from Moody's. Current shareholders
are Consorcio de Compensacion de Seguros, a public entity, (45.14%), Grupo
Catalana Occidente, SA (39.35%) and others (15.51%).
Sociedad Unipersonal
Sociedad Unipersonal is a wholly owned subsidiary of Grupo Catalana
Occidente, SA, a company operating in the Spanish insurance market for 140
years. With premiums of EUR 1,298 million in 2002, 20,000 agents and 800
offices in Spain, Grupo Catalana Occidente, SA, the second largest
shareholder in CyC, is one of the leading players in the Spanish insurance
market.
CONTACT: SWISS RE
Investor Relations
Phone: + 41 43 285 4444
===========================
U N I T E D K I N G D O M
===========================
ABBEY NATIONAL: To Establish Customer Outreach Center in Belfast
----------------------------------------------------------------
Abbey National, one of the U.K.'s largest personal financial services
companies, is spending around GBP5.5 million over the next two years in a
new Customer Outreach Center at its Mays Meadow site in Belfast.
The Invest Northern Ireland-backed project, which will create 149 new jobs
over the next two years, was announced by Ian Pearson, NIO Minister for
Enterprise, Trade and Investment. It will make Belfast the main center for
Abbey National's customer outreach program, and will double the number of
people proactively contacting its customers.
The two-phase project will create a Customer Relationship Management
operation, which aims to strengthen relationships with the bank's customers
and, in particular, many customers with whom Abbey National has had limited
contact recently.
Welcoming the investment Mr. Pearson said: "This significant investment will
create a center of Customer Relationship Management expertise in Belfast and
further develop the type of added-value service that Invest NI is keen to
support.
"It offers the opportunity to build capability in this sector and
strengthens Belfast's position as a premier location for financial service
companies, a sector identified as a key target in Invest NI's Information
and Communications Technologies Strategy.
"Abbey National has a very successful track record in its existing call
center and software operations in Belfast and this new operation reflects
the company's confidence in the quality of locally available staff."
Abbey National's Customer Sales Director, Mark Pain, commented: "Abbey
National's new strategy, announced a few months ago, is to have a single-
minded focus on U.K. personal financial services.
"This new Customer Outreach Center is part of the root and branch change
underway within Abbey National. We're confident it will help us get closer
to our customers and help build the foundations for the successful delivery
of our new strategy -- particularly getting the right people in the right
place to serve customers better."
*****
Invest NI has offered selective financial assistance of GBP768,000 towards
the Customer Outreach Center.
The investment will create 149 new jobs in two phases: 63 jobs in year one
and 86 in year two. Current employment is 36.
There are currently 707 employed in the Abbey National's Mays Meadow call
and software center.
AMP LIMITED: Holds Briefing on Six Months Results August 20
-----------------------------------------------------------
AMP Limited will be holding open briefings to discuss its results for the
six months to June 30, 2003. The results will be released to the Australian
Stock Exchange on August 20, 2003.
AMP will hold briefings on August 20, 2003 to discuss the results. Both
will be Webcast live via AMP's website (http://www.ampgroup.com). The media
briefing will be held at 10.00am and an analysts briefing at 12.30 p.m.
In addition, a series of one-on-one meetings with institutional investors
will be held in the weeks following these briefings. The purpose is to
provide context around the 2003 interim results.
A copy of presentation materials to be used in all briefings will be posted
on the AMP website on 20 August 2003.
*****
Moody's recently downgraded AMP Limited's ratings on concerns that the
reduced level of shareholder equity after the demerger of its U.K. and
Australian businesses will increase its overall leverage.
CONTACT: AMP LIMITED
Level 24, 33 Alfred Street
Sydney NSW 2000 Australia
ABN 49 079 354 519
Investor inquiries:
Karyn Munsie Mark O'Brien
Phone: +61 2 9257 7053
AQUILA INC.: Reports Net Loss from Continuing Operations
--------------------------------------------------------
Aquila, Inc. (ILA) reported a second quarter 2003 net loss that reflects
actions taken under the company's ongoing plan to wind down its wholesale
energy business, complete asset sales and restructure certain contractual
obligations.
Aquila's net loss for the quarter was US$80.6 million or US$.41 per fully
diluted share, including US$14.5 million of net income from discontinued
operations, compared to the 2002 second quarter net loss of US$810.0 million
or US$5.69 per fully diluted share, which included US$15.5 million in net
income from discontinued operations.
"While losses were anticipated, our transition plan to strengthen Aquila as
a financially sound owner and operator of utilities in the United States is
progressing very well," said Richard C. Green, Jr., Aquila's chairman and
chief executive officer. "We have achieved several major components of our
plan by selling our Australian assets, exiting the Acadia tolling agreement
and continuing to strengthen our domestic networks business.
"We will continue our restructuring through this year and next," Green said,
"especially our work to address our remaining long-term natural gas
contracts and fixed capacity payments for merchant power plants."
The loss in this year's second quarter is primarily due to restructuring and
impairment charges related to last year's decision to reshape the business
to be a regulated utility. In addition, both operating costs and interest
expense were higher in 2003 due to the company's non-investment grade credit
rating.
Aquila had impairment charges and a loss on the sale of assets totaling
US$103.0 million, primarily due to the termination of a tolling contract.
The company also recorded US$20.8 million in restructuring charges,
including US$17.8 million related to unfavorable interest rate swaps from
which the company fully exited in the second quarter.
Lower results from International Networks reflect the October 2002 sale of
Aquila's interests in New Zealand and the fact Aquila did not recognize
equity earnings from Midlands Electricity in the United Kingdom in the 2003
second-quarter.
Restructuring Charges
Aquila recorded restructuring charges of US$20.8 million in the second
quarter of 2003, and US$71.4 million in the 2002 second-quarter. The 2003
charges included US$17.8 million to exit portions of interest rate swaps
related to construction financing for two merchant power plants in Illinois.
There was also US$3.6 million in severance costs for additional workforce
reductions.
Impairment Charges
Aquila recorded impairment charges and net loss on sale of assets totaling
US$103.0 million in the second quarter of 2003, compared to impairment
charges of US$894.6 million in the 2002 second quarter. In this year's
quarter, Capacity Services incurred a charge of US$105.5 million for the
termination of the Acadia tolling agreement and realized a gain of US$5.1
million on the sale of its gas turbines. International Networks recorded a
US$2.6 million loss on the sale of Aquila's interest in AlintaGas in
Australia.
Asset Sales
Including proceeds from the Australian sale closed in July, Aquila has now
generated total proceeds of US$1.7 billion from the asset sale program it
began in the second quarter of 2002. Proceeds from asset sales will continue
to be used to reduce liabilities and fund working capital needs.
Recently completed and pending sales include:
(a) Australia. In April 2003, Aquila agreed to sell its interests in United
Energy Limited, Multinet Gas and AlintaGas Limited to a consortium
consisting of AlintaGas, AMP Henderson and their affiliates. In May 2003,
the sale of the company's 22.5% interest in AlintaGas Limited was closed and
Aquila received approximately US$97.0 million in cash proceeds in May and
July. Aquila recorded a loss of US$2.6 million from the Alinta sale.
In July 2003, Aquila completed the sale of its 33.8% interest in United
Energy and 25.5% interest in Multinet Gas and received additional cash
proceeds of US$513.0 million. After fees, expenses and taxes, the sales of
the three Australian investments are expected to yield net cash proceeds of
US$477.0 million. Approximately US$200.0 million of the proceeds was used
to retire the borrowings under the 364-day secured credit facility that was
arranged in April 2003. A gain is expected to be recorded in the 2003 third
quarter in connection with the sale of United Energy and Multinet Gas.
(b) Canada. In the second quarter of 2003, the company began a process to
solicit interested buyers for its Canadian network business. Indicative
bids were received in July 2003 and subject to receipt of acceptable offers
from the bidders, Aquila expects to negotiate a definitive agreement in the
third quarter of 2003 and close the sale in the first quarter of 2004,
following the receipt of regulatory approvals and satisfaction of other
closing conditions.
(c) United Kingdom. In May 2003, Aquila agreed to sell its 79.9% interest in
Aquila Sterling Limited, the owner of Midlands Electricity plc, for
approximately US$56.0 million.
Completion of the sale is subject to various conditions, including the
successful redemption of outstanding bonds issued by Avon Energy Partners
Holdings, an Aquila Sterling subsidiary, at 86 percent of their par value
plus accrued interest. If Aquila does not close the sale of this investment
by November 2003, the agreement to sell will terminate unless the parties
agree otherwise.
Domestic Networks
Domestic Networks showed improved 2003 second quarter EBIT of US$10.0
million, compared to a loss before interest and taxes of US$718.3 million a
year earlier, primarily due to 2002 impairment losses of US$692.9 million
from Aquila's investment in Quanta Services, Inc. and US$23.1 million from
communications technology investments. Aquila sold its remaining interest
in Quanta during the first quarter of 2003.
EBIT from utility operations was US$10.9 million in the 2003 second-quarter,
up from US$9.2 million a year earlier, reflecting US$2.1 million in EBIT
from interim rate increases in Michigan and Iowa. In 2002, Domestic
Networks had US$19.9 million of restructuring charges that were recorded in
the second quarter. Negative factors in the 2003 second quarter were
unfavorable weather, higher fuel costs, a reduction in off-system sales and
lower EBIT due to the sale of Domestic Networks' non-regulated wholesale gas
operation in September 2002 and its appliance repair business in January
2003.
Aquila's communications business narrowed its loss before interest and taxes
to US$1.4 million, compared to a loss of US$29.0 million in the 2002 quarter
that included US$23.1 million of impairment charges on communications
technology investments. An increase in customers at Everest Connections
added US$4.9 million to gross profit in the 2003 quarter.
Utility Rate Cases
Domestic Networks was granted increases in rates this year in four of the
seven states in which it operates. In Iowa, a settlement was approved in
February 2003 for a US$4.3 million increase in gas rates. In Michigan, a
gas rate increase of US$9.1 million was approved in March. The increase was
partially offset by a separate depreciation case, which reduced rates by
US$700,000 but had little impact on earnings. In Colorado, the company
settled an electric rate request with an increase of US$16.0 million
effective in June. Minnesota regulators approved a US$5.7 million gas rate
increase in July.
Several additional rate increase requests are pending. In June 2003, the
company filed for gas rate increases in three rate areas of Nebraska
totaling US$9.9 million. It expects interim rates to take effect in October
2003, with hearings to be held on each request and decisions reached by
January 2004. In July 2003, Aquila filed for rate increases totaling
US$80.9 million for its electric territories in Missouri. These increases
were requested primarily due to increased costs of natural gas used to fuel
power plants, necessary capital expenditures since the last rate case,
increased pension costs and lower off-system sales. Hearings are expected
to be held in February 2004. In August 2003, Aquila filed for rate
increases totaling US$6.4 million for its gas territories in Missouri,
primarily to recover the cost of system improvements and higher operating
costs. Hearings are expected in March 2004.
International Networks
International Networks reported EBIT of US$9.1 million for the second
quarter of 2003 compared to US$26.8 million in the 2002 quarter. Equity in
earnings of investments decreased US$19.1 million in 2003 compared to the
2002 second-quarter, primarily due to the October 2002 sale of the company's
interest in UnitedNetworks Limited in New Zealand. UnitedNetworks
contributed equity earnings of US$9.3 million in the second quarter of 2002.
In addition, the 2002 second-quarter included US$8.4 million of equity
earnings from Aquila's investment in Midlands Electricity plc while no
equity earnings were recorded in 2003.
Australia. EBIT from Australian investments declined US$12.5 million in the
second quarter of 2003 compared to the 2002 quarter mainly due to the costs
of foreign exchange options that locked in the value to the company of a
stronger Australian dollar on the Australian sale proceeds.
Canada. Aquila has reclassified the current and prior year operating
results of its Canadian network as discontinued operations due to the
pending sale of these assets.
United Kingdom. Although during the second quarter of 2003 Aquila's share
of undistributed earnings from Midlands Electricity was US$19.9 million,
Aquila did not recognize any of the equity earnings from this investment.
Due to regulatory limitations on cash payments by Midlands to its owners,
the company intends to record equity earnings and management fees only to
the extent cash is received.
Capacity Services
Capacity Services reported a loss before interest and taxes of US$115.6
million for the second quarter of 2003 compared to EBIT of US$20.4 million
in the 2002 quarter. The loss resulted primarily from the termination of
the Acadia tolling agreement, higher gas prices which made it uneconomical
to operate merchant plants, and a US$28.6 million decrease in mark-to-market
gains that occurred in 2002 but did not recur in 2003 due to lower liquidity
and electricity prices in the forward market.
In connection with its merchant power plants, Aquila makes fixed capacity
payments evenly throughout the year. For the second quarter of 2003,
capacity payments increased by US$4.6 million compared to a year earlier as
new plants became operational late in 2002. This additional capacity was
used on a limited basis at prices that were not sufficient to cover the
fixed capacity payments.
In May 2003, Aquila ended its 20-year tolling contract for the Acadia power
plant through a termination payment of US$105.5 million. This was partially
offset by a US$5.1 million gain related to the contract termination and the
sale of turbines previously written down to estimated fair value in 2002.
Equity in earnings of investments increased US$16.4 million mainly due to
increased earnings resulting from mark-to-market gains occurring at the
operating level of one of Aquila's equity investments. These gains are
non-cash, mark-to-market gains that will reverse over time as power is
delivered.
Aquila does not expect Capacity Services to be profitable during the next
two to three years because of the industry's excess generation capacity that
became operational in 2002, the continued construction of additional power
plants and the decreasing liquidity in the marketplace. The resulting
downward pressure on power prices has reduced the value of unsold merchant
generation capacity.
Wholesale Services
Wholesale Services reported EBIT of US$11.5 million in the 2003 second
quarter compared to a loss before interest and taxes of US$191.2 million a
year earlier that included a US$178.6 million impairment charge on
associated goodwill. Aquila began its exit from the wholesale energy
trading business in last year's second quarter and did not add to its
trading portfolio in 2003. The business therefore had limited opportunities
for earnings.
The EBIT results for the 2003 quarter include non-cash earnings of
approximately US$47.7 million related to the trading portfolio.
Substantially all of these earnings relate to long-term gas contracts.
During the quarter, average gas prices rose over the life of these contracts
by US$.63 per million Btu, which caused both the price risk management asset
and price risk management liability related to these contracts to increase
in value. The price risk management liabilities are discounted based on
Aquila's credit standing, while on the receivable side these transactions
are discounted based on the credit ratings of Aquila's counterparties (which
are on average substantially higher than Aquila's rating). As a result,
non-cash mark-to-market earnings were created. In 2002, Aquila recorded
US$34.0 million of similar mark-to-market earnings due to its credit rating
downgrades.
As of June 30, 2003, Aquila has recorded US$110.0 million of these
mark-to-market gains related to gas prices and the widening of the company's
credit spreads compared to its counterparties. The company expects these
gains to be reversed in later periods as contracts settle, its credit rating
improves and/or gas prices decline.
Corporate and Other
Corporate and Other reported EBIT of US$28.8 million for the second quarter
of 2003, up from US$3.2 million in the 2002 quarter. The improved results
are primarily due to US$35.8 million of foreign currency gains in 2003,
reflecting favorable movements in the Australian and New Zealand dollar
exchange rates.
Income tax benefits decreased US$48.2 million in 2003 compared to the second
quarter of 2002, primarily due to the decrease in Aquila's loss before
income taxes in 2003 compared to a year earlier, partially offset by tax
benefits not being recorded on a significant amount of the 2002 losses due
to income tax valuation allowances being provided and certain losses not
being tax-deductible.
Discontinued Operations
In 2002 and early 2003, Aquila sold its Texas natural gas storage facility,
its Texas and Mid-Continent natural gas pipeline systems, including its
natural gas and natural gas liquids processing assets and its ownership
interest in the Oasis Pipe Line Company, its coal terminal and handling
facility and its Merchant loan portfolio. The results of operations of all
those assets have been reported as discontinued operations for all periods
reported.
In the second quarter of 2003, Aquila began a formal process to sell its
Canadian network and began to report the results from that business as
discontinued operations.
Earnings from all discontinued operations totaled US$14.5 million, net of
tax, or US$.08 per diluted share in the second quarter of 2003, down from
US$15.5 million or US$.11 per share in the 2002 quarter.
Additional supplemental information, including income statements by business
segment, consolidated cash flow statement, consolidated balance sheet and
statistical information, is available at http://www.aquila.com. Choose the
"Financial Performance" link in the "Investors" box on Aquila's home page.
Based in Kansas City, Mo., Aquila operates electricity and natural gas
distribution networks serving customers in seven U.S. states and in Canada
and the United Kingdom. The company also owns and operates power generation
assets. At June 30, 2003, Aquila had total assets of US$8.4 billion. More
information is available at www.aquila.com.
"EBIT"
Aquila uses the term "EBIT" (earnings before interest and taxes) as a
performance measure for segment financial analysis. Aquila uses EBIT as a
performance measure as it captures the income and expenses within the
management control of its segment business leaders. Each segment business
leader is responsible for operating results down to earnings before interest
and taxes. Corporate management is responsible for all financing decisions.
The term "EBIT" is not meant to be considered an alternative to net income
or cash flows from operating activities, which are determined in accordance
with generally accepted accounting principles, as an indicator of operating
performance or as a measure of liquidity or other performance measures used
under generally accepted accounting principles. In addition, the term may
not be comparable to similarly titled measures used by other companies.
To See Financial Statements:
http://bankrupt.com/misc/AQUILA_2Q.htm
CONTACT: AQUILA, INC.
Investor Relations
Neala Clark
Phone: 816-467-3562
BRITISH AIRWAYS: Gets Green Light to Open Flights to Iraq
---------------------------------------------------------
British Airways has been given permission to start flights to Iraq. The
airline received confirmation on August 12 from the U.S.-led administration
in Iraq, the Coalition Provisional Authority, that it had been granted
approval to begin air services to Basra.
The airline plans to fly twice a week, via Kuwait, using a Boeing 777
aircraft. A decision will be taken, together with the Coalition Provisional
Authority, to set a date for the resumption of flights.
Geoff Want, director of safety and security, said: "The security of our
customers, staff and operation is absolutely paramount and we will fly to
Iraq only once we are confident that it is safe for us to do so."
Alan Burnett, regional director for the Middle East and Africa, said: "We
are delighted that we have been given the go ahead to start services to
Iraq. Our priority is to establish flights to Basra as soon as we can but
we continue to look at the possibility of starting flights to Baghdad in the
future once the airport is open.
"Air services connecting Iraq with Europe will provide a vital link during
the rebuilding of Iraq and commercial flights will be the cornerstone of the
economic development of the country."
BRITISH SKY: Back in Black with GBP260 Million Profit
-----------------------------------------------------
British Sky released recently these highlights for the year ended June 30,
2003:
(a) Net DTH subscriber growth of 133,000 in the quarter to 6.8
million;
(b) Total revenue increases by 15% to GBP3,186 million;
(c) DTH revenue increases by 21% to GBP2,341 million;
(d) Advertising revenue increases by 13% to GBP284 million;
(e) Operating profit before goodwill and exceptional items
increases by 94% to GBP371 million;
(f) Net operating cash inflow increases by 166% to GBP664
million;
(g) Profit before tax, goodwill and exceptional items of GBP260
million;
(h) Earnings before goodwill and exceptional items increases to
10.5 pence per share.
Tony Ball, Chief Executive of British Sky Broadcasting Group plc, said:
"Over the last five years Sky has grown significantly, doubling its revenues
and almost doubling its DTH subscriber base. We are highly confident of
reaching our 7 million subscriber target by the end of 2003 and, with only
half of households signed up to digital television, there is still plenty of
growth potential in the U.K. We will continue to focus on sustainable
improvements in our operating margin."
To View Full Report and Financials:
http://bankrupt.com/misc/British_Sky_Broadcasting_Group_PLC.htm
CONTACT: BRITISH SKY BROADCASTING
Analysts/Investors:
Neil Chugani
Phone: 020 7705 3837
Andrew Griffith
Phone: 020 7705 3118
E-mail: investor-relations@bskyb.com
Portland:
Tim Allan
Phone: 020 7404 5344
CABLE & WIRELESS: Terminates Key Executive
------------------------------------------
Cable & Wireless announces August 12, 2003 that Adrian Chamberlain, Board
Director and Group Director of Strategy and Business Development, will be
leaving the company on September 3, 2003.
In his nine years' service, Adrian Chamberlain has held a number of senior
line roles, including CEO of the Consumer Division of Cable & Wireless
Communications in the U.K. and Managing Director of the Consumer and
Multimedia Division of Cable & Wireless Optus in Australia.
From December 2002 to June this year, Adrian was CEO, Global Services and
Europe/Asia, and has been instrumental in implementing the restructuring
program of Cable & Wireless' former Global Division by reducing costs and
focusing on generating cash, as well as supporting the strategic review of
the Group undertaken by the new Board.
Following the company's implementation of its strategic review, and the
consequent restructuring and delayering of the business, there is no longer
a suitable role for him within the Group.
Adrian Chamberlain's contractual notice period was one year. He will
receive a cash payment of GBP262,500, equivalent to nine months' salary, in
lieu of notice. He will also receive additional pension credit, equivalent
to nine months' pensionable service, the capital value of which is
GBP90,000. In addition, he will be paid a bonus of GBP75,000 in recognition
of his contribution to the restructuring of Cable & Wireless over the past
year.
Richard Lapthorne, Chairman, Cable & Wireless, said: "The entire Board and I
are grateful for what Adrian has achieved and wish him the very best for the
future."
CONTACT: CABLE & WIRELESS
Investor Relations
Louise Breen
Phone: 020 7315 4460
Virginia Porter
Phone: +1 646 735 4211
Caroline Stewart
Phone: 020 7315 6225
SAFEWAY PLC: Asda's Secret Proposal Delays Commission's Report
--------------------------------------------------------------
The Competition Commission was forced to delay its submission of its report
on the proposed takeover of Safeway from Tuesday to Monday next week after
it emerged that Asda made a secret proposal to influence the Commission's
decision on the matter.
According to the Telegraph, Asda proposed to the Commission a plan that
would clear its way to buy Safeway if it agreed to sell sufficient numbers
of Safeway stores to Wm Morrison -- the one expected to receive the blessing
of the Commission in the bid battle. The go ahead signal for Wm Morrison is
also understood to require the company to sell 40 to 60 Safeway stores.
The commission consulted rival bidders, Wm Morrison, Tesco and J Sainsbury,
after receiving the proposal. The companies answered with a rejection. The
commission would like to follow proper procedures to prevent Asda from
finding grounds to seek a judicial review.
"The commission wants to give them [Asda] a fair hearing, but it is unlikely
to change its conclusions at this late stage," said one senior supermarket
executive, according to the report.
The trip of Wal-Mart's chief executive to Britain days before the
Competition Commission's ruling into the takeover of Safeway last week had
fueled rumors the retailer is helping convince the commission to approve a
takeover of Safeway by Asda. But Asda, which is owned by Wal-Mart, denied
Mr. Scott's visit had something to do with the commission's investigation.
WEST 175: Fails to Strike Deal with Lenders, Suspends Trading
-------------------------------------------------------------
Further to the company's announcement on July 24, the company announces that
it has been unable to agree settlement terms with one of its major unsecured
trade creditors. In these circumstances, the company is requesting a
suspension of its shares from the Official List whilst the company attempts
to achieve a satisfactory settlement with this creditor.
*****
At the request of the company trading on AIM for the under-mentioned
securities has been temporarily suspended from August 12, 2003 7:00 a.m.
pending clarification of the company's financial position.
Common Shares of No Par Value (0-955-520)(USU961151078)
fully paid
If you have any queries relating to the above, please contact AIM Regulation
at the London Stock Exchange on 020 7797 4154
Ref: AIMNOT303
West said last month it has completed the sale of the last division of its
operating business.
"As the company no longer has any trading activities, by mutual agreement
with Paul Burton, the board has now confirmed his resignation as finance
director and company secretary," the company said in a statement.
It added that the firm has a deficit and, at present, is unable to pay its
debts as and when they fall due.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Europe is a daily newsletter co-published by
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Washington, DC USA. Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee
Gonzales, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or publication
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