Thursday 26 August, 1:00 PM BST (Thomson Financial): European markets are
upbeat on today's corporate news with the media sector in the spotlight as
Vivendi Universal has received permission from the French government to file
under a new tax regime that will save around 3.8 billion euros over the coming
years. Shares in ITV are outperforming the sector on a bullish outlook from a
leading broker. Technology stocks are also strong, led by Atos Origin after a
leading broker said it expects robust earnings ahead of its first quarter
results. Chip stocks are edging higher ahead of earnings results from U.S.
based Novellus due after the Wall Street close. Elsewhere, Greek telecom
incumbent OTE has reported a 62% drop in second quarter net profit, mainly due
to a continuing fall in fixed-line revenue and higher operating expenses.
London's FTSE-100 Index has risen by 22.40 points or 0.51% to 4434.00,
while Paris's CAC-40 Index has gained 34.42 points or 0.96% to 3629.68.
Milan's MIB-30 Index has climbed by 161 points or 0.60% to 27,121 and
Frankfurt's DAX Index is trading up by 46.12 points or 1.22% to 3835.00.
* Greek telelom incumbent OTE reported a 62% drop in second quarter net
profit mainly due to a continuing fall in fixed-line revenue and higher
operating expenses. Net profit fell to 45 million euros in the three
months ended June 30 from 117.7 million euros a year earlier, below
market forecasts. Earnings before interest, tax, depreciation and
amortization (EBITDA) fell to 451.1 million euros from 485.9 million
euros a year earlier. Revenues rose 5.7% to 1.3 billion euros helped by
strong mobile sales and Romanian unit Romtelecom helped compensate for a
fall in local fixed-line revenue.
* Vivendi Universal has received permission from the French government to
file under a new tax regime that will save around 3.8 billion euros over
the coming years. The French Finance Ministry said as a result of the new
tax status, Vivendi has made a pledge to help create 2,100 new jobs in
distressed regions of France over the next five years.
* Swiss Re beat expectations as first half earnings increased to 1.4
billion Swiss francs from 691 million francs for the first half of 2003.
Annualised return on equity at 15.6% was above Swiss Re's average
three-year target of 13%. Net premiums earned declined 2% to 14.1 billion
francs and the return on investment was 5.8% compared to 4.8% last year.
Property & Casualty Business Group operating income grew by 79% to 1.5
billion francs, although premiums earned declined by 4% to 7.5 billion
francs due to fewer non-traditional transactions. In the Life & Health
Business, Group operating income increased by 34% to 633 million francs,
with premiums stable at 5.0 billion francs. Financial Services Business
Group contributed operating income of 359 million francs, up 32%
year-on-year as premiums grew by 2% to 1.6 billion francs.
* Fortis managed to surpass market forecasts as its first half net income
tripled to 2.078 billion euros with earnings per share of 1.60 euros
compared to 0.52 euros last year. Net operating profit almost tripled to
1,829 million euros. In the Banking business net operating profit
increased by 36% to 1,157 million euros and in the Insurance business net
operating profit increased by 800 million euros to 766 million euros.
* Scor's net income in the first half of 2004 came to 58.1 million euros
compared to 41.9 million euros in the first half of 2003, up 38.7% but
short of expectations. Operating income amounted to 70.6 million euros,
an increase of 11.4%. However, gross premiums written in the first half
of 2004 totalled 1,308 million euros, down 37% year-on-year and in-line
with corporate guidance. This was largely due to the expected cutback in
premiums issued by the Large Corporate Accounts branch and to the
non-renewal of a major Life reinsurance policy booked in the first
quarter of 2003.
* Ahold posted second quarter net income of 32 million euros compared to
3 million euros last year, primarily caused by lower net interest
expenses related to the early repayment of debt in the second quarter and
during 2003. Net sales amounted to 12.3 billion euros, down 4.9% year-on-
year. Operating income declined to 169 million euros from 222 million
euros last year. Europe Retail and U.S. Foodservice reported higher
operating income while U.S. Retail reported significantly lower operating
income. U.S. Retail and South America were both negatively impacted by
fixed asset impairment charges. Net debt only changed marginally in the
second quarter of 2004.
* Rentokil disappointed as first half pre-tax profits declined by 10.0%
to 180.4 million pounds. Earnings per share declined by 7.5% to 7.26
pence. Turnover increased by 0.6% to 1,200 million pounds. Interim
dividends per share were up 10.3% to 1.93 pence. The company said the
overwhelming common theme was a concern at the operational issues facing
the group - not the make up of the group.
* Hotel group Hilton said its first half profit before taxation, goodwill
amortisation and exceptional items grew by 72% to 189.7 million pounds.
Turnover amounted to 5,634 million pounds compared to 3,969 million
pounds last year and the dividend per share was up to 3.60 pence from
3.40 pence before. Ladbrokes' profit was up 51% to 153.7 million pounds
with strong performances in all channels. EGaming profits were up 95% to
12.1 million pounds with particularly strong growth from the sportsbook
and poker sites. Meanwhile, hotel profits were up 19.6% to 67.1 million
pounds. Looking ahead, Hilton continues to see a renaissance in betting
and gaming, driven by increased TV sports coverage and innovative
technology and will be fully exploited by Ladbrokes. On the hotel front,
it does not anticipate a full recovery before 2005.
* Engineering group Tomkins has unveiled first half pre-tax profits of
101.4 million pounds compared to 94.7 million pounds last year. Operating
profits before exceptional items and goodwill were up to 144.5 million
pounds from 136 million pounds. Sales were slightly down to 1,548 million
pounds due to adverse currency translation effects. All three of its
business groups reported double-digit margins. The Board declared an
interim dividend of 4.83 pence per share, representing an increase of 5%
year-on-year.
* Process solutions group Invensys has posted first half operating
profits of 16 million pounds compared to 17 million pounds last year, in-
line with market forecasts. The operating margin of retained businesses
was maintained at 2.6%. Sales were slightly down to 611 million pounds
from 653 million pounds last year. Net debt was cut by 273 million pounds
to 713 million pounds, and other legacy liabilities, including pension
deficits, reduced by 48 million pounds.
* ABN Amro announced the withdrawal of its ordinary share listing from a
number of stock exchanges. The shares will no longer be quoted on the
London, Frankfurt, Hamburg, Dusseldorf, Zurich and Singapore exchanges.
The bank found that the costs and requirements of these listings
outweighed the benefits. The shares will continue to be listed on the
Euronext and New York exchanges. The introduction of new trading products
by the London and Frankfurt exchanges means that it will still be
possible to trade in the U.K. and Germany.
* Shares in Roche are trading higher after the company submitted a
Marketing Authorisation Application to the European health authorities
for its new cancer drug Tarceva (erlotinib) for the treatment of advanced
non-small cell lung cancer. The application is based on data from a
pivotal clinical trial, which saw a 42% improvement in survival rates
compared to those on placebo.
Simon.Tse@Thomson.com; Thomson Financial
This is Thomson Financial Corporate Group's Europe Market Commentary. The
information herein is believed to be true and accurate. If you have any
questions please e-mail James Sang at james.sang@tfn.com. For more
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SOURCE Thomson Financial Corporate Group
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