European Business News 96-08-07

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From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated August 7 8:30 CET

CONTENTS

[01] Italy announces privatisation of telecommunications company STET

[02] Dresdner Bank's first-half operating profit jumps 44%

[03] EC criticises US sanctions on Iran and Libya

[04] KLM doubles its net profit to $162 million dollars

[05] British Petroleum's first half operating profits jump more than 20 percent

[06] Germany joblessness lower than expected

[07] Zeneca shares fall on profit-taking after earnings exceeds expectation

[01] Italy announces privatisation of telecommunications company STET

Officials also are considering splitting it up and selling off chunks separately, it said.

Stet is considered one of the most attractive companies in Italy's vast state-owned business sector. Its privatization was originally scheduled for 1994, then this year, but political instability and bickering have held up the sell-off.

The outline's of Stet's privatization plans were announced following a meeting between Premier Romano Prodi, ministers involved and Stet's overseers.

The government said it was committed to the establishment of a regulatory authority as well as a liberalized telecommunications market ahead of Stet's privatization.

It said it would consider measures to keep key decision-making in the hands of the government, including a core shareholding group or separate class of government-controlled shares with more weight.

'The privatization of Stet has as its main target the creation of a highly competitive company with a hard core of shareholders, primarily Italian, but with the significant participation of foreign partners,' the government said.

[02] Dresdner Bank's first-half operating profit jumps 44%

The bank also said its return on equity before taxes rose to 20% in the first six months of the year, up from 14% a year earlier.

The bank released those figures ahead of a press conference to be held later in the morning. Further Dresdner Bank six-month earnings figures are scheduled for release at 0930 CET.

[03] EC criticises US sanctions on Iran and Libya

Energy Commissioner Christos Papoutsis said the D'Amarto legislation, signed into law yesterday by President Clinton, could devastate Europe's oil industry. The law allows the US to impose sanctions on non-US companies investing in the oil industries of Iran and Libya. Russia says the new law 'contradicts international law'.

[04] KLM doubles its net profit to $162 million dollars

Revenue increased by 6 point 1 percent. But the airline said that much of the profit increase was due to a gain from the sale of preference shares in its US partner, Northwest Airlines.

Operating profit declined to 80 million guilders 48.48 million dollars compared to 99.39 million dollars a year earlier, due to pressure on prices and a rise in costs. KLM predicted a full-year net result 'in the same order of magnitude as realized in 1995-1996.' For the remainder of this year, KLM said it also expects operating income to come in slightly lower than last year.

[05] British Petroleum's first half operating profits jump more than 20 percent

BP said in a statement it expects total hydrocardon production in 1996 to be 3% ahead of 1995's figure as new fields coming on stream more than compensate for declines at more mature fields.

The company said it expects its chemicals business to achieve a 'relatively strong third quarter' with steady demand growth. 'Margins are expected to continue at their current levels.'

[06] Germany joblessness lower than expected

On an unadjusted basis, Germany's jobless rate rose slightly to 10.2% from 9.9%. Labor Office President Bernhard Jagoda said the unadjusted figures make the jobs situation ''look worse than it really is.''

In unadjusted terms, the number of German jobless rose to 3,911,613 in July from 3,784,589 in June. The number of Western German jobless rose to 2, 764,688 in July from 2,665,890 in June, or to 9.0% from 8.7%. Eastern German jobless rose to 1,146,925 in July from 1,118,699 in June, with the jobless rate increasing to 15.4% from 15.0%.

Citing lower hiring due to Germany's traditional summer vacation season, Jagoda said seasonal factors distorted Germany's unadjusted employment figures in July.

The adjusted change for all of Germany was better than had generally been predicted, declining contrary to expectations. A survey of economists by APDJ World Equities Report last week showed that joblessness in all of Germany was estimated on average to have risen by a seasonally adjusted 5, 900 people in July from June.

Germany's July jobless rate was slightly lower than than the unadjusted 10.3% economists had predicted.

[07] Zeneca shares fall on profit-taking after earnings exceeds expectation

Zeneca met or exceeded most expectations with news of 21% rise in pre-tax profit in the first six months of 1996 on the back of a 16% rise in sales.

Soon after the company reported, profit-takers stepped in, traders said, but the fall was also being seen amid a broader downturn in London shares after a drop overnight on Wall Street.

At 0800 GMT, shares in Zeneca were off 16 pence, or 1.10 pence, to 1435.

The profit-taking in Zeneca spread to other drug shares, with majors like Glaxo Wellcome PLC and SmithKline Beecham PLC, both falling just under 1%.

The London market had built up Zeneca shares in afternoon trading Monday, with the numerical rise roughly equal to the price that's been knocked off the share Tuesday. That's another sign that the selling in Zeneca Tuesday morning was profit-driven rather than a statement of negative sentiment.

From the European Business News (EBN) Server at http://www.ebn.co.uk/

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