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Business

Business Briefs

Volkswagen records dramatic losses; OPEC Ministers ensure oil supplies will suffice; Adidas-Salomon profits in 2002 were its best ever.

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VW headquarters in Wolfsburg: Searching for ways out of the gloom

VW Profits Nosedive

Volkswagen’s after tax profits fell by 11.3 percent in 2002 to €2.6 billion, the German car-maker announced at its annual press conference in Dresden on Tuesday.

VW Chairman Bernd Pischetsrieder said unless markets in western Europe and America picked up it would be 2004 before the company would be able to turn around the current malaise at the Wolfsburg-based firm. The company is pinning its hopes on a savings package and a new range of models to lift it out of its current gloom. VW plans to roll out a new range of more than 20 vehicles worldwide, including the new “Golf V” model, which the firm will launch in September. Shares in the company fell sharply after the news was announced, losing more than 10 percent of their value. The leading German stock index, DAX, also reacted badly to the news, falling under the psychologically important 2300 mark.

OPEC: Enough Oil in Event of Iraq War

Members of OPEC -- the global organization dedicated to stability in and shared control of the petroleum markets -- agreed today that the official oil supply limits should remain unchanged, at 24.5 million barrels a day, even in the event of a war with Iraq. At the meeting in Vienna on Tuesday, the Organization of Petroleum Exporting Countries ruled out implementing a formal contingency plan for the suspension of output limits should the United States launch a war on Iraq, saying it can prevent shortages in the event of war.

Saudi Arabia -- the world’s leading oil producer -- said it had “plenty” of spare capacity, which it could use to maintain oil supplies, should a U.S. attack on Iraq stop Iraqi exports. “There will be no shortage of oil,” Saudi Oil Minister, Ali al-Naimi told reporters at the meeting. “The test is, when the need is there, whether we will use the capacity or not and I can assure you we will.” Oil prices appeared not to be greatly affected by the news, with prices for U.S. light crude rising $0.02 to $37.29 a barrel at 15:30 CET.

Adidas-Solomon Profits Soar

Adidas-Solomon says it will follow up record sales in 2002 with further growth and higher profits, despite a struggling world economy. Presenting the sportswear manufacturer’s

full year results, CEO Herbert Hainer said the company expects profits to increase by up to 15 percent in 2003, with sales increasing by up to five percent a year in the medium term. Adidas after-tax profits soared 10 percent in 2002 to €229 million ($253 million), a trend which the company said was partly down to huge growth in Asia -- where the 2002 World Cup was held in Korea and Japan -- where sales of its products rose by 16 percent.

The release of Tuesday's figures was not enough to give shares in Adidas-Solomon a major boost, but the company did buck the trend on the Frankfurt stock exchange. While the German stock index, the DAX, was down one and a quarter percent on Tuesday afternoon, Adidas-Solomon was down less than a third of a percent. And there was more good news for shareholders with the announcement that after three years of paying a dividend of €0.92, this year Adidas-Solomon is paying out €1 per share. That means it's shelling out some 20 percent of its profits in dividends.