Austria's Top Economic News - Week 25 April - 1 May

As expected after the Easter holidays the business week in Austria started quietly. The good news in early Tuesday was that the KAG's investment funds were exposed with only EUR 700m in disaster-hit Japan (EUR 500m in stock and EUR 200m in bond funds.) Despite that last week engine maker ATB Austria Antriebstechnik announced troubles with its capital, this week it said its sales and earnings in the first quarter of 2011 improved, while order intake came higher than the expectations. Still, no concrete results were given, which is not a good sign after all. Great news came from OMV, which announced first production in Tunisia after the mega deal concerning the buy of Pioneer Natural Resources' business in the country. 

Before the flood of news hit us on Thursday, Wednesday was another calm day. It became once again clear that Russian Sberbank is interested in VBI, the eastern European unit of OeVAG, as Sberbank's CEO said he expects a decision on the matter in the next six months. Meanwhile, Investkredit Bank AG, another OeVAG subsidiary, announced a profit of EUR 59.7m for 2010 compared to a loss of EUR 295.5m for 2009. The positive performance will however not stop the merger between Investkredit and its parent.

Good news came from Zumtobel. The lighting specialist said it expects to grow higher than the average for the market and that its LED products should account for one-third of its business in 2014/15.

Continuing the financial results season, Plaut said its sales rose 20% to EUR 5.3m in the first quarter of 2011 and are expected to rise by between 15% and 20% for full 2011. The EBIT of the IT consultancy soared 60% in the first three months. On Wednesday Flughafen Wien also announced a new financial investor, while SW Umwelttechnik confirmed its 2010 preliminary results.

And so thus came Thursday and Friday bursting with financial results. Erste Group was first, revealing EUR 260.6m in net profit for the first three months of the year, up 2.1%. Operating profit fell 3% to EUR 953.6m. The results came lower than expected despite that credit risk costs decreased 13.4% to EUR 460m.

IT company Quanmax, formerly known as Gericom, reported quarterly sales of EUR 21m, an increase of 30%, while the net profit grew to EUR1m from EUR0.8m. The company is optimistic and projected a further increase in the results for 2011.

Strabag, the construction major in central and eastern Europe (CEE), said its 2010 profit rose 8% to EUR 174.9m and it plans an increase in dividend to EUR 0.55 per share from EUR 0.50 for 2009. Construction output, however, went down 2% to EUR 12.78bn. The builder projects an output of EUR 13.5bn for 2011 and of EUR 13.7bn for 2012. 

Verbund, another major in Austria, reported first-quarter sales of EUR 917.7m, an increase of 13.8%, while the net profit decreased 9.5% to EUR 108.5m. The EBIT of Austria's biggest utility increased 11% to EUR 215.8m. The company projects unchanged results for 2011 if the hydropower conditions remain as average. 

Hit by the escalating situation in Libya, OMV announced its production went down to 304,000 barrels per day in the first three months of the year from 320,000 boe/d in Q4 2010 and 317,000 boe/d in Q1 2010.

High Tech Industries AG, or HTI, said on Thursday it managed to lower its net loss to EUR 3.9m in 2010 from EUR 12.7m in 2009 and turned a profit of EUR 0.8m for Q1 2011. The 2010 revenue rose 8.1% to EUR 193m. The company will move to the prime market of the Vienna Stock Exchange as of May 1.

In another statement, Frankfurt-listed company C.A.T. Oil AG said its 2010 net profit soared to EUR 19.5m from EUR 8.4m in 2009. Sales rose by only 0.3% to EUR 228.8m. The company envisages to distribute 25% of its net profit as a dividend. C.A.T. Oil further said it intends to invest a total of EUR 150m in 2011 and 2012.

On Thursday Telekom Austria, whose clients in Bulgaria have just received simultaneous bills for three months, said it plans to operate in Austria under the A1 umbrella brand in the future.

The last to report results on Thursday were Linz Textil Holding, whose sales were up 20% to EUR 149m in 2010, while net profit skyrocketed to EUR 9.7m from EUR 2.1m, and IT services provider TeleTrader. The latter announced its 2010 net loss widened to EUR 262,000 from EUR 124,000 for 2009 and revenues were up 2% to EUR 6.85m.

The busy Thursday ended on a high note as collapsed A-Tec said it is postponing the release of its financial figures to June 15 from April 29. Clearly, nothing good can be expected from the former business empire of Mirko Kovats. 

Things slowed down on Friday, but only by a notch. Uniqa was clearly under focus as it announced 2010 results, while confectionery maker Manner said it was burdened by the rise of cacao bean prices, and as long as I remember the latter has always been complaining about raw material prices... Anyway, the company with a flagship store near the Stephansdom in Vienna said its 2010 net profit went down to EUR 2.6m from EUR 4.5m. Sales slipped by only 2% to EUR 158.5m. As a conclusion Manner once again said that no decrease in raw material prices can be seen for the current year. 

But let's get back to Uniqa, one of the major insurers in CEE. The company gave final figures for its 2010 performance, which included a 8.4% rise in premiums to the record-high EUR 6.2bn. The shareholders will enjoy a EUR 0.40 dividend per share.

Perhaps no-one paid much attention on the news that Voestalpine got a major order from Siemens in London, as the results of Strabag's main peer Porr (the Bulgarians reading this, please don't smirk at the name) were coming around the corner. Burdened by the economic crisis, Porr said its revenues fell 9.7% and its net profit declined 46.1% in 2010. 

Refractory material specialist (no, not the big one) Rath said it managed to return to profit in 2010 with EUR 1.46m after a loss of EUR 930,000 for 2009. Sales decreased to EUR 74.9m from EUR 77.7m.

Apart from stock listed companies, Friday was also the time for the Austrian Federal Railways (OeBB) to reveal its 2010 results. The company announced a loss of EUR 330m for the year and an increase of 6.4% to EUR 5.14bn in its revenue.

On Friday it also became clear that Warimpex placed a convertible bond worth PLN 39.5m, or around EUR 10m, in Poland and that Fidelity already holds above 10% in lighting specialist Zumtobel.

Towards the end of the day IT services company S&T announced a loss of EUR 49m for 2010, while revenue stood at EUR 351m.

And topically May started with unemployment announcements. Unemployment in the country went on falling for a 14th month in a row and in April the number of unemployment decreased 5.4% to 236,304.

At a statistical level, the week saw the release of overnight stay figures. Statistik Austria said the number of stays in the first five months of the winter season (Nov - March) fell by 0.9%, while in March alone they rose 2.7%. It was also revealed that the number of passengers in Austria's aviation sector went up 7.9% to 24.5 million in 2010.