Austria's Top Economic News - Week 16-22 May

Monday

Early in the morning, car parts maker Pankl Racing Systems AG reported excellent results for the first quarter of 2011. Sales grew to EUR 29.166m from EUR 25.667m a year earlier. The company's net profit rose to EUR 2.366m from EUR 2.069m. Pankl, which profited from the good economic conditions in the first quarter, said it expects the growth trend to remain in the following quarters.

Statistik Austria announced on Monday that the country's inflation rate rose to 3.3% in April, its highest level since September 2008, from 3.1% in March. The rate was boosted by high prices of oil products and food.

On Monday Bank Austria, the eastern European unit of Italian Unicredit, said it is raising the capital of its subsidiary in Kazakhstan by EUR 198m, while engine maker ATB officially said that its 2010 loss has eaten half of its capital.

However, at the start of the week, all were commenting the words of Andreas Treichl, CEO of Erste Group, that the country's politicians were stupid and cowardly. Of course, most of the Austrian parties were shocked by Treichl's statements, which at the same time drew the support of businessmen and managers in Austria. No one however backed the language used by the top banker.

In the evening, the words of Treichl were shortly overshadowed by the announced by OMV capital increase. The oil major plans to issue up to 27m new shares and to raise up to EUR 900m in proceeds from the move.

Tuesday

Despite that on Tuesday all attention was once again focused on Treichl's words, some other important news also appeared. In the morning Vienna Insurance reported its quarterly results, saying its net profit rose 5.7% to EUR 115.6m. The firm's earnings from ordinary operations grew 7% to EUR 142.8m and VIG said it expects around EUR 508m for full 2011, up by around 10%. Despite a drop in Austria, the premium income went up 2.9% to EUR 2.6bn in the first quarter. For 2011 an increase of between 2% and 4% is projected.

Raiffeisen Bank International (RBI) announced in the afternoon it had placed a bond worth EUR 500m on the capital market.

Wednesday

Wednesday was full with quarter results, with Schoeller-Bleckmann Oilfield Equipment (SBO) being first. The company reported a 81.8% increase in sales to EUR 97.3m. Net profit soared to EUR 11.6m from EUR 2.5m. The results slightly exceeded the projections of analysts. Atrium European Real Estate said its first-quarter pretax profit almost halved to EUR 26.4m. Gross rental income fell 11% to EUR 38.9m. Machinery group Binder+Co announced a 44% rise in sales to EUR 17.34m, while EBIT rose by a threefold.

Sparkassen Immobilien AG, or S Immo, was the last to report results on Wednesday. It revealed a net profit of EUR 5.4m, down from EUR 6m. EBIT grew 60% to EUR 26.6m. Rental income went up 38% to EUR 30.3m.

Among the other news, builder Strabag said it plans a EUR 175m bond with a 4.75% coupon rate and maturity of seven years.

Thursday

Thursday began with office furniture maker Bene announcing EUR 170.8m in sales for fiscal 2010/11, down 4.7% in annual comparison. The company's loss narrowed to EUR 8.2m from EUR 14m. Bene projected an increase in sales for 2011/12, together with a "slightly negative result".

General Motors Powertrain-Austria, the engine maker based in Vienna, will be renamed into Opel Wien with immediate effect, the company also said in the morning.

The whole saga around Erste Group's CEO Andreas Treichl came to a relative closure on Thursday after the manager apologised for his statements from last Friday. Treichl, however, urged the politicians to take measures regarding the banking sector in Austria and eastern Europe and thus to avoid a credit crunch in the region. He also said Erste plans to start returning the received from the state capital help before the end of the first half of 2011.

The financial results reporting season also continued as Linz Textil said it had closed the first quarter with sales of EUR 35.1m, up 20%, and a net profit of EUR 2.43m, up 37%. Bank für Tirol und Vorarlberg (BTV), in its turn, said its net profit rose 21.4% to EUR 13.1m.

And while the clients of MTel, the Bulgarian unit of Telekom Austria, plan a silent protest in front of the Austrian embassy in Sofia, Telekom Austria had its annual shareholders meeting in Vienna. For more than six months, the Bulgarian firm was unable to take control of its software system, resulting, as many say, into delayed, incorrect and overcharged bills...

Friday

Real estate firm Conwert said on Friday its first-quarter sales grew 37% to EUR 126.8m, while EBIT went up 24% to EUR 27.6m. Without taking into account real estate revaluations, the company projects a 15% rise in EBIT for full 2011. After BTV on Thursday, Oberbank, also part of the 3-Banken Gruppe, announced its financial figures on Friday. The bank's net profit soared 30.4% to EUR 28.1m in the first quarter of 2011. BKS, the third bank from the group, revealed a net profit of EUR 10.7m, up 22.1%.

Among the other news on Friday, vaccine maker Intercell said it will seek an authorisation by its shareholders for a conditional capital increase of up to EUR 1.5m. Meanwhile, OMV announced plans to intensify its collaboration with Azerbaijan.