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Business

Business Briefs

Volkswagen 2002 net profit crushed by German automobile Crisis; Commerzbank sells stake in leading German brewery; ProSiebenSAT1 earnings fall sharply in 2002; Number of Unemployed Germans still unsatisfactory.

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Volkswagen is Europe's largest automaker

Sales Crisis crushes Volkswagen 2002 net profits

German car maker Volkswagen said Wednesday its earnings had fallen last year as a result of the difficult environment in the automobile sector. VW said in a statement its net profit fell by 11.4 percent to €2.58 billion ($2.8 billion) in 2002, pretax profit was down 9.6 percent to €3.986 billion and operating profit slid by 12.2 percent to €4.76 billion. Revenues fell 1.8 percent to €86.948 billion while deliveries to customers were down by 1.9 percent. For the first time in years, VW sold less than 5 million cars in 2002. The company did not provide an outlook for the current year: The uncertainty about the potential economic fallout from a possible war in Iraq made it impossible to draw up earnings forecasts for the current year, VW chairman Bernd Pischetsrieder, told the Financial Times Deutschland.

Commerzbank sells stake in leading German brewery

Commerzbank has sold its stake of 13.84 percent in leading German brewery Holsten to an institutional investor, a spokesman for Germany's fourth-biggest bank said on Wednesday. A report in the Wednesday edition of the Financial Times Deutschland said the buyer was acting merely as a go-between and planned to sell the stake at a later date, probably to an international brewery group. The business daily said British group Scottish and Newcastle was interested in both Holsten and another German drinks group, Brau and Brunnen. The report also tipped the Belgian group Interbrew, the Dutch firm Heineken, the Danish brewer Carlsberg and US company Anheuser-Busch as potential buyers. Holsten, valued at an estimated €650 to €750 million ($695 to $802 million), commands a nine-percent share of the German beer market.

ProSiebenSAT1 earnings fall sharply in 2002

ProSiebenSAT1, Germany's largest free-to-air broadcaster, said Wednesday its earnings had slumped sharply in 2002 as a result of the recession in the German television advertising market, but stringent cost-cutting measures prevented an even steeper decline. ProSiebenSAT1, which is to be sold by the bankrupt KirchMedia group to German publisher Heinrich Bauer, said in a statement its net profit had dropped by 78 percent to €15 million ($16 million) last year. Earnings before interest and tax were down 54 percent to €73 million. Sales fell by six percent to about €1.9 billion, ProSiebenSAT1 said. Despite the slump, the company performed better than the market as a whole, since the TV advertising market shrank by an estimated eight and 10 percent last year.

German unemployment figures still on the rise

The number of unemployed people in Germany, the biggest economy in the eurozone, appeared to have risen slightly in February, but remained below five million, the head of the Federal Labor Office, Florian Gerster said on Wednesday. According to the labor office's own estimations, January and February are expected to be the peak months of unemployment in Germany. In January, the total number of people looking for work in Germany rose to 4.6 million, or 11.1 percent of the working population. A study presented by the German Federation of Chambers of Commerce (DIHK) predicted Tuesday that the number of people drawing unemployment benefits in Germany would average 4.4 million this year, and would possibly jumping as high as five million during some months.

HypoVereinsbank recovers from disastrous Year 2002

HypoVereinsbank said Wednesday it would not pay a dividend to shareholders for 2002, which it described as the worst year in its history, but said it was cautiously optimistic regarding the current year's outlook. Germany's second-largest bank said in a statement that increased risk provisions, special charges and falling net interest and commission income caused a net loss of €858 million ($918 million) in 2002, the largest loss in HypoVereinsbank's history. Red ink was spattered across HypoVereinsbank's annual accounts at pre-tax level, too, with the bank chalking up a loss of €821 million before taxes, compared with a €1.6 billion profit in 2001. Yet HypoVereinsbank's performance in the fourth quarter 2002 appeared to herald a turnaround in the group's fortunes. From October to December, HypoVereinsbank posted operating profit before risk provisions of €1.2 billion, making it the best quarter of all of 2002 with all earnings components contributing to the increase, a bank executive said.