/raid1/www/Hosts/bankrupt/TCREUR_Public/020726.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, July 26, 2002, Vol. 3, No. 147
Headlines
F I N L A N D
SONERA CORP: Will Respond To Telefonica July 25 Report Release
F R A N C E
ALCATEL: Alcatel Optronics Announces Second Quarter Results
ALCATEL: Announces Second Quarter and First Half Results
ALCATEL: Will Provide Singtel With VoicePlus Services
ALCATEL: Works With Brocade to Offer Network Storage Solution
FRANCE TELECOM: Supplies Voice Services to Club Mediterranee
VIVENDI UNIVERSAL: Issues Chairman, CEO Fourtou's Statement
G E R M A N Y
BABCOCK BORSIG: Insolvent Subsidiaries May Secure Bank Credits
CARGOLIFTER AG: Airship Manufacturer Lays Off 60% of Workforce
D+S ONLINE: Speeds Up Restructuring Program
DIALOG SEMICONDUCTOR PLC: Reports 2Q02 Results
I T A L Y
FIAT SPA: Redundancy Plan May Affect 550 Employees in Italy
N E T H E R L A N D S
UNITED PAN-EUROPE: Bondholders Reach Deal on Recapitalization
S P A I N
TERRA LYCOS: Improves EBITDA By 51% Over 2Q of Last Year
U N I T E D K I N G D O M
ASW HOLDINGS: Steel Manufacturer Will Cut 800 Jobs in Cardiff
BIG FOOD: Q1 2002 Forecasts Profit Warning for Iceland Foods
BIOCOMPATIBLES INTERNATIONAL: Court Approves Capital Reduction
DATAMONITOR PLC: Issues Six-month Interim Results
DATAMONITOR PLC: Appoints Graham Albutt as Non-Exec Director
INVENSYS PLC: Releases Update on Current Trading at AGM
INVENSYS PLC: Issues 2002 Annual General Meeting Results
PACE MICRO: Sonera Chooses Pace-Vega Gateways For VoIP Service
P&O PRINCESS: Releases Results For Quarter Ending June 30, 2002
P&O PRINCESS: Merger with Carnival Secures EU Clearance
STELAX INDUSTRIES: Reaches Pact to Restructure UK Subsidiary
WORLDCOM, INC.: BT Group Eyes International Operations
- - - - - - - -
=============
F I N L A N D
=============
SONERA CORP: Will Respond To Telefonica July 25 Report Release
--------------------------------------------------------------
Telefonica Moviles has published its interim report for April -
June and information on German Group 3G (Sonera 42.8%) earlier
than intended.
Sonera will announce its interim report on July 25, 2002, at
10.00 a.m. Finnish time. Before that Sonera will not comment on
any related questions.
Sonera - www.sonera.com -- is a leading provider of mobile and
advanced telecommunications services. Sonera is growing as an
operator and as a provider of transaction and content services in
Finland and in selected international markets. The company also
offers advanced data solutions to businesses, and fixed network
voice services in Finland and neighboring markets. In 2001,
Sonera's revenues totaled EUR 2.2 billion, and profit before
extraordinary items and taxes was EUR 0.45 billion. Sonera
employs about 9,000 people.
Contact Information:
Jari Jaakkola
Senior Vice President
Investor Relations
Telephone: +358 2040 65170
Email: jari.jaakkola@sonera.com
In the US:
Steve Fleischer
Vice President
Investor Relations & Corporate Communications
Telephone: + 1 973-448-4616
Email: steve.fleischer@sonera.com
===========
F R A N C E
===========
ALCATEL: Alcatel Optronics Announces Second Quarter Results
-----------------------------------------------------------
Alcatel Optronics reported Thursday its second quarter results
with sales down by 83.0% to Euro 25.4 million over the same
period last year. On a sequential basis, sales for the second
quarter declined by 27.6%.
Loss from operations was registered at Euro (50.6) million. On
a pro forma basis, excluding non-recurring charges, loss from
operations during the second quarter amounted to Euro (41.3)
million, while net loss amounted to Euro (42.5) million.
"Second quarter came in as predicted, in a further contracting
environment. While inventories still pollute current demand, we
feel additional turmoil at carriers' level is now very likely to
push out the acceptance and deployment of new-generation systems
and components", said Jean-Christophe Giroux, CEO. "While we're
still committing to technological value and customer service, we
felt it mandatory to take cost-cutting efforts to the next level,
and further rightsize our structure."
"Our worldwide Industrial Redeployment Plan will yield a 40%
reduction in quarterly fixed costs at completion, with 25%-30%
achieved before year-end. Non-recurring charges have been
recorded in Q2 for Euro 144 million, that include, on top of the
Euro 60 million already announced for restructuring, additional
write-offs on inventory (Euro 9 million), goodwill (Euro 63
million) and deferred tax assets (Euro 12 million)."
"In this market environment, visibility beyond the short term is
practically impossible. Today, we are anticipating third quarter
sales to be down sequentially between 20 to 30 percent, with a
contained loss from operations due to the benefits of cost
cutting measures."
Second Quarter 2002
Sales for second quarter 2002 decreased by 83.0 % to Euro 25.4
million compared with Euro 149.7 million in second quarter 2001.
Gross profit/(loss) amounted to Euro (30.3) million compared with
Euro 44.8 million in the same period last year. SG&A amounted to
Euro 8.4 million and R&D amounted to Euro 11.9 million. Loss
from operations was registered at Euro (50.6) million.
Financial loss amounted to Euro (2.1) million.
Restructuring costs amounted to Euro (58.7) million. Other
expenses amounted to Euro (7.7). Net loss was registered at
Euro (186.5) million compared with net income of Euro 11.8
million in second quarter 2001.
Q2 `02 Pro forma P&L
(excluding non-recurring items)
|------------------------+-----------+-----------+-----------|
|in Euro millions | Reported | Non-Rec. | Pro forma |
|------------------------+-----------+-----------+-----------|
|Net Sales | 25.4 | | 25.4 |
|------------------------+-----------+-----------+-----------|
|Gross Profit | (30.3) | (9.3) | (21.0) |
|------------------------+-----------+-----------+-----------|
|Operating Income | (50.6) | (9.3) | (41.3) |
|------------------------+-----------+-----------+-----------|
|Financial income (loss) | (2.1) | - | (2.1) |
|------------------------+-----------+-----------+-----------|
|Restructuring costs | (58.7) | (58.7) | - |
|------------------------+-----------+-----------+-----------|
|Other revenue (expense) | (7.7) | (8.9) | 1.2 |
|------------------------+-----------+-----------+-----------|
|Income Tax | (12.2) | (12.3) | 0.1 |
|------------------------+-----------+-----------+-----------|
|Amortization of Goodwill| (55.2) | (54.8) | (0.4) |
|------------------------+-----------+-----------+-----------|
|Net Income | (186.5) | (144.0) | (42.5) |
|------------------------+-----------+-----------+-----------|
|Notional EPS* | (1.72) | | (0.39) |
|------------------------+-----------+-----------+-----------|
|Notional EPS ($ADS)** | (1.69) | | (0.39) |
|------------------------+-----------+-----------+-----------|
| | | | |
|------------------------+-----------+-----------+-----------|
*This Notional EPS is calculated on the net results of the
Alcatel Optronics division, divided by the notional number of
Alcatel Class O shares (108,586,831)
**EPS (ADS) based on Noon Buying Rate at June 30, 2002 of 0.9856
USD.
Alcatel Optronics designs, manufactures and sells high
performance optical components, modules and integrated sub-
systems for use in terrestrial and submarine optical
telecommunications networks.
Operating state-of-the-art manufacturing plants in North America
and Europe, Alcatel Optronics is a leading supplier of DWDM
lasers, photodetectors, optical amplifiers, high-speed
interface modules and key passive devices such as arrayed
waveguide multiplexers and Fiber Bragg Grating filters.
It also has experience in integrating active and passive
components and modules into sub-systems. The Optronics Division
is part of Alcatel's Optics Group which comprises Alcatel's
world-leading activities in optical networking, including
submarine and terrestrial transmission systems, fiber optics and
optical components. For more information, visit Alcatel
Optronics on the Internet: http://www.alcatel.com/optronics.
ALCATEL: Announces Second Quarter and First Half Results
-------------------------------------------------------
The Board of Directors of Alcatel met yesterday and approved
second quarter 2002 results. Group sales for the second quarter
were down 1.4% at Euro 4,235 million compared to sales of Euro
4,296 million from the previous quarter, and were unchanged on a
comparable basis at Euro4,245 million. Income from operations
totaled Euro (177) million versus first quarter 2002 income from
operations of Euro (343) million [on a comparable basis, first
quarter 2002 income from operations was Euro (333) million].
Quarterly net loss was Euro (1,438) million for a diluted EPS of
Euro (1.20) per A share [$(1.18) per ADS] compared with first
quarter 2002 net loss of Euro (836) million, or diluted Euro
(0.72) per A share [$(0.71) per ADS].
Group sales for the second quarter 2002 were down 33% compared to
restated1 Euro6,363 million one year ago. Restated income from
operations for the second quarter 2001 was Euro 177 million, and
net income was Euro (3,117) million, yielding a diluted EPS of
Euro (2.74) per A share [$(2.70) per ADS].
Key Figures
|--------------------+-------+--------+--+---------+----------|
| Amounts in millions| 2002 | 2002 | | 2001 | 2001 |
| of euros except for| Second| First | | Second | Second |
| EPS | Quarte|Quarter | | Quarter | Quarter |
| | r | | | Restated| Published|
| | | | | * | |
|--------------------+-------+--------+--+---------+----------|
| Net Sales | 4,235 | 4,296 | | 6,363 | 6,767 |
|--------------------+-------+--------+--+---------+----------|
| Income from | (177) | (343) | | 177 | 136 |
| Operations | | | | | |
|--------------------+-------+--------+--+---------+----------|
| Net Income |(1,261)| (720) | | (1,714) | (1,714) |
| pre-Goodwill | | | | | |
|--------------------+-------+--------+--+---------+----------|
| Net Income |(1,438)| (836) | | (3,117) | (3,117) |
|--------------------+-------+--------+--+---------+----------|
| EPS (Class A) in |(1.20) | (0.72) | | (2.74) | (2.74) |
| euros (Diluted) (1)| | | | | |
|--------------------+-------+--------+--+---------+----------|
| E/ADS (Class A) in | (1.18)| (0.71) | | (2.70) | (2.70) |
| $ | | | | | |
| (Diluted) (1) | | | | | |
|--------------------+-------+--------+--+---------+----------|
(1)Quarterly EPS and E/ADS for 2001 and 2002 have been calculated
based on the following outstanding A shares for 2002: 2nd quarter
- 1.16 billion, 1st quarter - 1.15 billion; and for 2001: 2nd
quarter - 1.14 billion. E/ADS has been calculated using the US
Federal Reserve Bank of New York noon Euro/dollar buying rate of
$0.9856 as of June 28, 2002.
* 2001 quarterly and six month results have been restated to
reflect the Group's new structure following the sale of the DSL
modem business in December 2001, the sale of the European
enterprise and services business in April 2002 and the sale of
the microelectronics business in June 2002.
Serge Tchuruk, CEO, said, "Alcatel is focused on restoring its
profit potential in today's adverse environment while preserving
its capability to rebound when markets improve. Second
quarter results reflect on-going actions as the first quarter
operating loss was cut nearly in half at the same level of sales.
This was largely due to an 10% sequential decrease of fixed
costs. Alcatel's ability to withstand the downturn was further
evidenced by the Euro 800 million positive operating cash
flow in the second quarter, which brought net debt to a low of
Euro 1.3 billion. This was again largely the result of a
further Euro 2 billion sequential reduction in working capital.
The further weakening of market prospects appearing in the second
quarter has led Alcatel to intensify restructuring programs in
order to lower its quarterly sales breakeven point to well below
Euro 4.5 billion for the fourth quarter of 2002, with another
Euro 1 billion to be cut during the subsequent four quarters. The
evaluation of future prospects also led us to reassess all
balance sheet items associated with the financial situation of
customers particularly exposed to the slack in long distance
business.
Overall, exceptional provisions for restructuring and reserves
booked and impacting net income in the second quarter amounted to
over Euro 1 billion.
Our strict management of capital employed in operations secured
cash and cash equivalents of Euro4.8 billion at the end of June.
We have also renegotiated the terms and conditions of our credit
and asset securitization facilities. These actions should help
offset the impact of the recent rating agencies downgrades and
should perpetuate the financing of operations throughout 2003 and
beyond.
Business development remains a key priority of Alcatel. The
merger of most of our activities in China into the new Alcatel
Shanghai Bell company was effective July 1st, broadening
Alcatel's already wide geographic reach.
Businesses such as broadband access, cellular infrastructure,
service and applications, and Space are performing relatively
well given current conditions. These adverse conditions
particularly hit the Optics sector on the other hand, which
accounted for nearly all the second quarter operating loss.
Despite the slack in optics, the Group's overall gross margin
continued to improve, reflecting strong advances in the design
efficiency of the newly marketed products .
Alcatel continues to invest significantly in next generation
technologies which are being favorably received by customers as
they well meet their need to combine new revenue stream
generation with operating cost cuts.
Particular emphasis is being placed on enhancing the intelligence
of networks, including optical, cellular and enterprise
networks, while developing their broadband capabilities.
Alcatel expects markets to stay depressed in the second half of
2002, with no sign of recovery in view. Not including the
impact of Alcatel Shanghai Bell, the outlook for the second
half, with a weak third quarter and a seasonally stronger fourth
quarter, is close to the first half in terms of sales, however
with significantly improved income from operations. In spite of
the downgrades of our credit ratings, we maintain our year end
2002 net debt target at below the year end 2001 level,
factoring in some increase throughout the second half."
Second Quarter 2002 Results (unaudited)
-- Net sales: Euro 4,235 million vs. reported Euro 4,296 million
last quarter (down 1.4%) and vs. Euro 4,245 million on a
comparable basis last quarter (down 0.2%).
-- Geographical distribution of sales:
W. Europe: 42%
Other Europe: 8%
USA : 16%
Asia : 19%
RoW: 15%
-Gross margin: 25.6% (25.2% for Q1 2002).
-Selling, general and administration ("SG&A") costs: Euro (728)
million (17.2% of sales).
-Research and development ("R&D") expenses: Euro (532) million
(12.6% of sales).
-Income from operations: Euro (177) million including Euro (45)
million of inventory write-offs vs. reported Euro (343) million
including Euro (33) million of inventory write-offs in Q1 2002.
-Earnings before tax and amortization of goodwill: Euro (1,226)
million and included:
-Net financing expenses of Euro (291) million compared to Euro
(70) million during the first quarter.
-Restructuring costs of Euro (504) million compared to Euro (139)
million in Q1 2002.
-Net other losses of Euro (254) million [composed of Euro 215
million in capital gains and Euro (469) million in provisions]
and compared to a loss of Euro (249) million during the same
period three months ago.
-Net Income Pre-Goodwill: Euro (1,261) million vs. Euro (720)
million in the first quarter.
-Net Income: Euro (1,438) million and included a related tax
charge of Euro (20) million, share in net income of equity
affiliates and discontinued activities of Euro (15) million and
goodwill amortization of Euro (177) million.
-Diluted A share EPS: Euro (1.20) [$(1.18) per ADS] based on an
average of 1,159 million A shares.
-Operating working capital: Euro 3,232 million, a sequential
decrease of Euro 2,094 million:
-Net Inventory: Euro 3,416 million, a sequential decline of Euro
877 million.
-Trade Receivables: Euro 5,357 million, a sequential decrease of
Euro 1,217 million.
-Trade Payables and customers' deposits: Euro 5,542 million,
unchanged sequentially.
-Cash and equivalents: Euro 4,805 million, compared to Euro 4,619
million at the end of Q1 2002.
-Net Debt: Euro 1,264 million (ratio to equity plus minority
interests:
16%).
-Operating Cash Flow: Euro 793 million.
First Half 2002 Results (unaudited)
|----------------------+-------+---------+---------|
| Amounts in millions | 2002 | 2001 | 2001 |
| of euros except for | First | First | First |
| EPS | Half | Half | Half |
| | | Restated| Publishe|
| | | * | d |
|----------------------+-------+---------+---------|
| Net Sales | 8,531 | 12,154 | 12,974 |
|----------------------+-------+---------+---------|
| Income from | (520) | 296 | 222 |
| Operations | | | |
|----------------------+-------+---------+---------|
| Net Income | (1,981| (1,381) | (1,381) |
| pre-Goodwill | ) | | |
|----------------------+-------+---------+---------|
| Net Income | (2,274| (2,907) | (2,907) |
| | ) | | |
|----------------------+-------+---------+---------|
| EPS (Class A) in | (1.92)| (2.56) | (2.56) |
| euros (Diluted) (1) | | | |
|----------------------+-------+---------+---------|
| E/ADS (Class A) in $ | (1.89)| (2.52) | (2.52) |
| (Diluted) (1) | | | |
|----------------------+-------+---------+---------|
(1) Six month EPS and E/ADS for 2001 and 2002 have been
calculated based on the following outstanding A shares: 1st half
2002 - 1.16 billion and 1st half 2001 - 1.14 billion. E/ADS has
been calculated using the US Federal Reserve Bank of New York
noon Euro/dollar buying rate of $0.9856 as of June 28, 2002.
* 2001 quarterly and six month results have been restated to
reflect the Group's new structure following the sale of the
DSL modem business in December 2001, the sale of the European
enterprise and services business in April 2002 and the sale of
the microelectronics business in June 2002.
-Net sales: Euro 8,531 million vs. published Euro 12,974 million
one year ago (-34.2%) and vs. restated Euro 12,154 million one
year ago (-29.8%).
Geographical distribution of sales:
W. Europe: 42%
Other Europe: 7%
USA : 17%
Asia : 18%
RoW: 16%
-Gross margin: 25.4%
-Selling, general and administration ("SG&A") costs: Euro (1,546)
million (18.1% of sales).
-Research and development ("R&D") expenses : Euro (1,141) million
(13.4% of sales).
-Income from operations: Euro (520) million including Euro (78)
million of inventory write-offs vs. published Euro 222 million
including Euro (345)million of inventory write-offs during the
same period one year ago.
-Earnings before tax and amortization of goodwill: Euro (2,028)
million and included:
-Net financing expenses of Euro (362) million compared to
restated Euro (1,165) million during the same period last year.
-Restructuring costs of Euro (643) million compared to restated
Euro (1,235) million during the first half of 2001.
-Net other losses of Euro (503) million [composed of Euro 196
million in capital gains which was offset by Euro (699) million
in provisions] and compared to a gain of Euro 222 million during
the same period one year ago.
-Net Income: Euro (2,274) million and included a related tax
credit of Euro 166 million, share in net income of equity
affiliates and discontinued activities of Euro (119) million, and
goodwill amortization of Euro (290) million.
-Diluted A share EPS: Euro (1.92) [$(1.89) per ADS] based on an
average of 1,156 million A shares.
Business Highlights
|-------------------+--------+-------+--------+--------+--------|
| Segment Analysis | 2002 | 2002 | 2002 | 2001 * | 2001 * |
| Euro in millions | Second | First | First | Second | First |
| | Quarter| Quarte| Half | Quarter| Half |
| | | r | | Restate| Restate|
| | | | | d | d |
|-------------------+--------+-------+--------+--------+--------|
|-------------------+--------+--------+--------+--------+--------
|
| Sales: | | | | |
|
|-------------------+--------+--------+--------+--------+--------
|
| Carrier Networking| 1,969 | 2,085 | 4,054 | 2,986 | 5,782
|
|-------------------+--------+--------+--------+--------+--------
|
| Optics | 1,012 | 1,047 | 2,059 | 2,115 | 3,897
|
|-------------------+--------+--------+--------+--------+--------
|
| e-Business | 603 | 591 | 1,194 | 541 | 1,108
|
|-------------------+--------+--------+--------+--------+--------
|
| Space & Components| 748 | 702 | 1,450 | 920 | 1,860
|
|-------------------+--------+--------+--------+--------+--------
|
| Other & | (97) | (129) | (226) | (199) | (493)
|
| Eliminations | | | | |
|
|-------------------+--------+--------+--------+--------+--------
|
| Total | 4,235 | 4,296 | 8,531 | 6,363 | 12,154
|
|-------------------+--------+--------+--------+--------+--------
|
|-------------------+--------+--------+--------+--------+--------
|
| Income from | | | | |
|
| Operations: | | | | |
|
|-------------------+--------+--------+--------+--------+--------
|
| Carrier Networking| 24 | (119) | (95) | 54 | 40
|
|-------------------+--------+--------+--------+--------+--------
|
| Optics | (176) | (153) | (329) | 208 | 406
|
|-------------------+--------+--------+--------+--------+--------
|
| e-Business | (18) | (28) | (46) | (178) | (309)
|
|-------------------+--------+--------+--------+--------+--------
|
| Space & Components| 31 | 15 | 46 | 71 | 124
|
|-------------------+--------+--------+--------+--------+--------
|
| Other | (38) | (58) | (96) | 22 | 35
|
|-------------------+--------+--------+--------+--------+--------
|
| Total | (177) | (343) | (520) | 177 | 296
|
|-------------------+--------+--------+--------+--------+--------
|
* 2001 quarterly and six month results have been restated to
reflect the Group's new structure following the sale of the DSL
modem business in December 2001, the sale of the European
enterprise and services business in April 2002 and the sale of
the microelectronics business in June 2002.
Business Analysis of the Second Quarter:
Carrier Networking
Second quarter revenue of Euro 1,969 million was down 5.6% from
Euro 2,085 million the previous quarter (down 3.2% from Euro
2,034 on a comparable basis and compared with restated Euro
2,986 million one year ago).
Broadband networking revenues were relatively stable thanks to
DSL sales in the US, China and Europe and improved ATM market
share worldwide. GSM infrastructure continued to hold up well
thanks to commercial successes in Latin America, Asia, the Middle
East and Africa. Applications software and voice switching
recorded sequential growth. Revenues for network design, build
and operational services were slightly down due to contract
slippage in Asia Pacific during the quarter.
Income from operations was Euro 24 million compared with a loss
Euro (119) million during the first quarter of 2002 [Euro (109)
million on a comparable basis] and a gain of restated Euro 54
million for the second quarter of 2001. Profitability was
improved across the board as fixed cost reductions are flowing
through to the bottom line. Significant progress was achieved in
broadband networking, while mobile networking also increased its
operating margin. Advances were also recorded in network
management, services and software applications.
Optics
Revenue of Euro 1,012 million for the Optics segment was down
3.3% from Euro 1,047 million in the previous quarter. Revenue
during the same period last year was Euro 2,115 million.
Terrestrial optical networking revenues were up in Asia Pacific
but mixed in Europe with some additional weakness appearing in
the southern region. Sales in North America and Latin America
remained poor compared to last year. Submarine sales remained at
a very low level, though up sequentially due to increased
billings during the quarter.
Optical fiber sales continued to post a sequential decline as
operators are working through their remaining inventories.
Optronics revenues amounted to Euro 25 million as compared to
Euro 35 last quarter and Euro 150 million one year ago.
Loss from operations was Euro (176) million compared to a loss
of Euro (153) million in the first quarter of 2002. During the
second quarter of 2001, the Optics segment registered income from
operations of Euro 208 million. The deterioration in the
segment's profitability came despite further reductions in fixed
costs and was mainly due to an unfavorable product mix.
Operating margins stabilized for optical fiber as sales volumes
continued to slip. Submarine networking margins also continued to
improve, due to both improved volumes and reduced fixed costs.
Optronics posted an operating loss during the quarter of Euro
(51) million.
Full details of Alcatel Optronics 2nd quarter 2002 performance
are explained in a separate earnings release today.
e-Business
Quarterly revenues of Euro 603 million were up 2.0% from Euro
591 million during the first quarter of 2002. Revenue for the
same period last year was Euro 541 million. Sales of GSM mobile
handsets remained stable sequentially at 3.0 million units
and compared to 1.7 million one year ago. Sales of Genesys
software applications were sequentially flat but somewhat
higher than their year ago level. Voice and data networking
solutions sales were also unchanged from last quarter but down
year on year.
Loss from operations was Euro (18) million and improved from an
operating loss of Euro (28) million for the first quarter of
2002 and restated Euro (178) million for the second quarter
of 2001. Genesys profitability remained essentially unchanged
from the first quarter while the handset activity was close
to breakeven. R&D expenses associated with data networking
product introductions planned for the second quarter of 2002 had
a relatively smaller negative impact on e-business networking
than in the prior quarter, while the voice business was
generating positive operating margin.
Space & Components
Quarterly revenues were up 6.6% to Euro 748 million from Euro
702 million the previous quarter, and were Euro 920 million
during the same period one year ago. Satellite revenues were
strong and compared favorably on a sequential basis as
telecommunication sales held up as forecast.
Components revenues were slightly off, while battery
revenues were relatively unchanged from the previous quarter.
The segment posted income from operations of Euro 31 million as
compared to Euro 15 million in the first quarter of 2002 and
Euro 71 million for the second quarter of 2001. The
sequential improvement was due to higher satellite sales
volumes and lower fixed cost structures in both the battery and
components units.
Upcoming Events/Announcements
October 30, 2002 - Third Quarter 2002 Earnings Release
November 21, 2002 - Analysts' Day
January 30, 2003 - Fourth Quarter and Full Year 2002 Earnings
Release
ALCATEL: Will Provide Singtel With VoicePlus Services
-----------------------------------------------------
Alcatel - www.alcatel.com --, a leading telecom infrastructure
vendor, announced on Wednesday that it has been selected by
Singapore Telecommunications (SingTel) to optimize the Voice
over IP capabilities of its VoicePlus services.
VoicePlus is Singtel's next-generation VoIP service targeted at
resellers of international telephone services and mobile carriers
in the Asia Pacific region.
Under the terms of the contract, Alcatel will provide its IPWay
9100 (Alcatel 5021 Advanced Routing Server), a full component
of the Alcatel VoIP Next Generation Network (NGN) solution,
designed to provide powerful call control features, flexible
policy-based routing functions and advanced digit manipulation.
User acceptance testing of the Routing Server has been completed,
and commercial use will begin in August 2002.
"VoicePlus, with its focus on quality and reliability, is an
important service for SingTel because it enables us to enhance
our packet-based technologies to deliver both traditional
voice services as well as new value-added voice services.
Together with Alcatel and SingTel Aeradio, we hope to bring the
service levels and capabilities of our VoicePlus service to a new
level," said Masagos Zulkifli, a senior director in SingTel's
International Carrier Services Group. SingTel Aeradio is the
system integrator in this IP-based switch project.
Dirk Bailliere, Alcatel's vice president for Voice Networks
activities in Asia Pacific, said, "Being chosen by SingTel, a
strong and reputed world leader in deploying innovative
technologies and services, proves again the readiness of
Alcatel's comprehensive NGN solution offering. We are very
pleased to implement our advanced routing feature server, which
is a major step for Alcatel to grow our NGN business globally
with carriers like SingTel."
Through VoicePlus, Singtel provides quality termination in
Australia, China, Hong Kong, Indonesia, Japan, Malaysia,
Singapore, South Korea, Taiwan, United Kingdom and the United
States.
SingTel is Asia's leading communications company with a
comprehensive portfolio of services that include voice and data
services over fixed, wireless and Internet platforms. Serving
both the corporate and residential markets, SingTel is committed
to bringing the best of global communications to its customers in
the Asia Pacific and beyond. SingTel has extensive interests in
submarine cable and satellite systems, including its co-owned ST-
1 satellite and the pan-Asian C2C cable network.
Its infrastructure development strategy is to ensure that its
networks remain modern and efficient, and continue to meet the
needs of its customers.
The SingTel Group has expanded into overseas markets, with
investments in many countries and territories. In Australia, its
wholly owned subsidiary, SingTel Optus is a leader in integrated
communications -- serving more than five million customers. The
Group's major investments include Advanced Info Service of
Thailand, the Bharti Telecom Group of India, Globe Telecom of the
Philippines and Telkomsel of Indonesia.
SingTel has been recognized Best Asian Telecom Operator by
industry publication, TelecomAsia, for five consecutive
years since 1998. The Group's turnover for the year ended 31
March 2002 was SUSD7.34 billion (USUSD4.02 billion). More
information can be found @ http://www.singtel.com.
The Alcatel 5021 ARS (Advanced Routing server) is part of
Alcatel's Next Generation Network portfolio. Connected to the
Alcatel 5020 Softswitch or other vendors' softswitches, the
Alcatel 5021 ARS extends the basic routing capabilities with a
number of advanced routing features, advanced digit manipulation
capabilities and powerful call control features.
Alcatel designs, develops and builds innovative and competitive
communications networks, enabling carriers, service providers
and enterprises to deliver any type of content, such as voice,
data and multimedia, to any type of consumer, anywhere in the
world. Relying on its leading and comprehensive products and
solutions portfolio, stretching from end-to-end optical
infrastructures, fixed and mobile networks to broadband access,
Alcatel's customers can focus on optimizing their service
offerings and revenue streams. With sales of EURO 25 billion in
2001 and 99,000 employees, Alcatel operates in more than 130
countries.
ALCATEL: Works With Brocade to Offer Network Storage Solution
-------------------------------------------------------------
Alcatel - www.alcatel.com -- the world leader in optical
networking, announced on Wednesday that it will work with
Brocade, the leader in Storage Area Network (SAN) infrastructure,
to offer new carrier class storage networking solutions for
interconnecting SANs over distance.
Brocade SAN infrastructure and Alcatel's Metro DWDM system will
be integrated in a single platform. This will allow large and
medium enterprises to implement business continuance solutions -
such as data mirroring, data replication, electronic tape
vaulting and remote server clustering - to protect critical
business information.
The solution addresses the growing market need for cost
effective, faster and more efficient storage applications through
metropolitan area networks. Customers will be able to choose from
a much broader range of services - made available by their
telecommunication providers - to manage, store and easily recover
their data and applications anytime, anywhere.
Recent tests have successfully demonstrated interoperability of
Alcatel's Metro DWDM system, 1696 Metro Span, and Brocade 2Gbit/s
SAN infrastructure in real world storage data applications to
guarantee business continuance. In case of a disaster, this
capability helps eliminate downtime and data loss by enabling
replication of data over distance. These tests follow successful
trials that verified interoperability between Alcatel's 1696
Metro Span and the Brocade 1 Gbit/s product family.
"We're glad to work with Brocade to help SAN customers realize
the benefits of connecting their geographically diverse SANs
using our metro DWDM system," stated Bernard Le Mou%l, Chief
Technology Officer of Alcatel's optics activities. "Brocade has
proven itself to be an industry leader and we look forward to
leveraging combined solutions to address SAN opportunities around
the globe."
"Brocade is pleased to work with Alcatel to provide our customers
with proven configurations that simplify the internetworking of
SANs across optical infrastructure," said Jeffrey Brooks, Chief
Marketing Officer, Brocade. "The combination of the Brocade
intelligent platform for storage networking with the Alcatel 1696
Metro Span platform can create a reliable, scalable
infrastructure that optimizes SAN manageability and performance
across the metro area and enables true business continuance
through dual redundant fabrics."
Brocade offers the industry's leading intelligent platform for
networking storage. The world's leading systems, applications,
and storage vendors have selected Brocade to provide a networking
foundation for their SAN solutions.
The Brocade SilkWormr family of fabric switches and software is
designed to optimize data availability and storage and server
resources in the enterprise.
Using Brocade solutions, companies can simplify the
implementation of storage area networks, reduce the total cost of
ownership of data storage environments, and improve network and
application efficiency. For more information, visit the Brocade
website at http://www.brocade.com.
Facing the task of storing, managing, administering, and
providing access to an ever-increasing amount of critical data
with limited resources, companies are implementing SANs to help
them keep pace with data growth, while at the same time reducing
the costs of their storage environments.
Brocade SilkWorm fabric switches and software provide the world's
leading intelligent networking foundation for SANs. Using Brocade
fabric switches, companies can network servers with storage
devices through a storage area network, creating a highly
available, manageable, scalable, and secure environment for
storage applications.
According to leading telecom market research firm RHK, Alcatel
was the 2001 world leader in global optical transport -
encompassing terrestrial and submarine applications - with 17%
market share, in terrestrial optical transport with 14.2% market
share and in submarine optical transport with 41% market share,
an unprecedented achievement in the telecom industry.
Alcatel's optics business comprises optical components, optical
fibers, SDH/SONET and DWDM systems, cross-connects, microwave
radio links, network intelligence, and services for both
terrestrial and submarine applications.
FRANCE TELECOM: Supplies Voice Services to Club Mediterranee
------------------------------------------------------------
France Telecom is supplying managed voice services to Club
Mediterranee, France's largest travel and tourism company, using
advanced enterprise communications solutions from Nortel
Networks.
According to France Telecom's announcement in Wednesday, under a
seven-year outsourcing agreement, France Telecom is transforming
the global voice infrastructure of Club Mediterranee into a
single advanced network.
Nortel Networks is the exclusive supplier of enterprise telephony
solutions for Club Mediterranee's new network under subcontract
to France Telecom.
"Outsourcing our telecommunications system is a key part of our
business strategy," said Christian Pilaud, chief technology
officer, Club Mediterranee. "It drives reduced operational costs
and gives us the latest technologies, a higher level of service,
and more flexibility to concentrate on our core business."
"As many of our resorts are in remote locations, we need to have
a consistent level of communications capabilities throughout our
resorts," Pilaud said. "Through past experiences, we learned to
expect that Nortel Networks and France Telecom can deliver a
reliable, high-standard telecommunications network anywhere in
the world."
An integrated Nortel Networks voice system has already been
installed at Club Mediterranee's Paris headquarters. This system
allows its 800 Paris-based employees to interact efficiently with
their colleagues at Club Mediterranee's 120 resorts and 40
regional head offices. The upgraded PBX and new handsets will
also benefit guests making in-room international calls at Club
Mediterranee resorts from West Africa to Polynesia.
In addition, Club Mediterranee's U.S.-based call center in
Scottsdale, Arizona and its Australian call center in Sydney --
collectively supporting 150 agents -- have been upgraded with
Nortel Networks Symposium Call Center Server.
This enables calls to be automatically routed to the agent best
equipped to handle individual guest needs.
"The outsourcing agreement between France Telecom and Club
Mediterranee enables us to bring together the best possible
telephony network along with round-the-clock service to ensure
the consistency this company needs," said Jean Nivoix, director,
Managed Services and Outsourcing Business, France Telecom.
"Nortel Networks is a key ally for us as we develop our carrier
managed services. Their robust, integrated voice and data
solutions can turn various non-uniform networks into one global
network."
This Club Mediterranee agreement is part of France Telecom's
initiative to develop Carrier Managed Services that help
businesses evolve their entire communications strategy. France
Telecom works with various suppliers to provide high-speed
bandwidth services, managed LANs, voice over IP, and content
delivery networks. Each solution is customized for the individual
company.
"When you couple carrier-grade telephony products with a high
standard of management services, the customer gets the best
possible solution," said Michel Clement, vice president, Nortel
Networks France, Middle East and Africa. "In this instance,
Nortel Networks is providing a market-leading solution designed
to evolve with Club Mediterranee as it grows its business."
Nortel Networks voice over IP solutions for enterprises include:
Nortel Networks CallPilot Unified Messaging Services for combined
voice, fax and e-mail accessible from any location; centralized
management services, allowing a network administrator to manage
an entire telephony network from a single site; Symposium IP
Contact Center Solutions; Internet telephones; and Nortel
Networks Succession IP-enabled Meridian 1 Communications Systems.
Club Mediterranee is France's largest travel and tourism company,
with revenues of euros 1,985 million, and the global leader in
all-inclusive vacations, with 120 sea and mountain villages,
villas and cruise ships in approximately 40 countries around the
world. It is also considered the world's largest sports academy.
More information about Club Mediterranee can be found on the Web
at www.clubmed.com.
To support clients in their e-transformation, France Telecom, a
leader in telecommunication services for business, offers a whole
new range of services, from counseling to outsourcing, in the
fields of voice (land and wireless telephony), data (Intranet and
Extranet networks, Internet connection and Web hosting) and image
(transmission and broadcast).
With over 20,000 of the largest French companies in its client
portfolio, France Telecom's turnover represented 9.6 billion
Euros in 2001. France Telecom is also a strategic stockholder of
Equant, an international IP and data leader for multinational
companies. Equant provides network services, externalized
services and global integration services.
Equant deploys a seamless worldwide network, connecting the most
important business centers in over 220 countries around the
world. Equant services 3,700 clients, including two thirds of the
one hundred largest companies in the world and had a 3.06 billion
dollar turnover in 2001.
Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Metro and Enterprise Networks,
Wireless Networks and Optical Networks.
As a global company, Nortel Networks does business in more than
150 countries. More information about Nortel Networks can be
found on the Web at www.nortelnetworks.com.
VIVENDI UNIVERSAL: Issues Chairman, CEO Fourtou's Statement
-----------------------------------------------------------
The Chairman and Chief Executive Officer of Vivendi Universal
(NYSE: V), Jean-Renee Fourtou, today stated:
1. Since my appointment as Chairman and CEO of Vivendi Universal
three weeks ago on July 3, I have emphasized our goal to solve
the company's short- and medium-term financial problems. On July
10, we announced that we had obtained an additional E1 billion
unsecured credit facility from a group of banks. I want to point
out that this facility has not been drawn down and I expect that
it will only be used very partially at the end of August. We are
currently working at putting in place new financing that will
enable us to fulfill our medium-term needs and, thereby,
eliminate any doubts about our financial capacity to meet loan
repayments. We are expecting to achieve that objective by the end
of August.
2. The two committees set up within the Board of Directors--the
strategy and financial committees---are actively pursuing their
work. This will enable us to give details in September of the
strategic direction and the future landscape of Vivendi
Universal. All of the businesses are under review and the assets
and shareholdings that are not core to our strategy are being
identified.
Vivendi Universal is carrying too much debt: no matter what,
lowering the debt burden will require significant asset
disposals. However, we do not intend to rush into any actions
that would damage the company, its shareholders and the
businesses involved.
The plan to create a new Canal+ grouping, which was presented to
the CSA after having been presented to the various personnel
representative organizations and councils within the company, is
an example of this dual approach. The plan would help lower
Vivendi Universal's debt, and should permit Canal+ to grow and
improve its profitability.
3. Vivendi Universal is determined to set an example in terms of
corporate governance and transparency. This is even more
important, since the company has suffered greatly from excessive
rumors and conflicting information.
For these reasons, we want the information that we give to our
shareholders, employees and all our partners in general to be not
only measured, but be very precise. Under these circumstances, I
would ask everyone in contact with Vivendi Universal to obtain
their information from our official spokespeople. They alone have
information that has been approved by the company. Coupled with
the official press releases and regulatory filings that we have
made in the United States and France, these are the only official
sources of information about our company.
4. With this in mind, I want to confirm that, as a result of the
ongoing audit, the non-audited preliminary consolidated results
for the second quarter and first half of 2002, as well as the
level of debt at June 30, the announcement of which was planned
for July 26, are expected to be published on August 14.
Note to Editors: Press releases and other information
referred to in this press release can be obtained through SEC and
other filings, or on the company's web sites at
http://finance.vivendiuniversal.comand
http://www.vivendiuniversal.com.
Contact Information:
Investor Relations - Paris
Laura Martin
Telephone: 917/378-5705
Laurence Daniel
Telephone: +33 (1).71.71.1233
Investor Relations - New York
Eileen McLaughlin
Telephone: +(1) 212.572.8961
=============
G E R M A N Y
=============
BABCOCK BORSIG: Insolvent Subsidiaries May Secure Bank Credits
--------------------------------------------------------------
Insolvent Babcock Borsig's administrator said it is confident
that many of its insolvent subsidiaries has a big chance of
getting bank credits required for the continuation of its
business, a report from Die Welt and Financial Times said.
The report said that a lifeboat company will be created once
banks agree to the provision of credits. This agreement is
expected soon for the company's services division.
CARGOLIFTER AG: Airship Manufacturer Lays Off 60% of Workforce
--------------------------------------------------------------
Insolvent German airship maker, Cargolifter AG will be suspending
60% of its workforce, a report from Financial Times said.
This move is seen as a precursor to redundancies. Fears also loom
that 300 job cuts may be implemented.
Cargolifter's rival Zeppelin Luftschifftechnik GmbH has also
dismissed rumors that a merger will happen with Cargolifter, the
paper said.
D+S ONLINE: Speeds Up Restructuring Program
-------------------------------------------
On account of the poor demand level during the first half of the
year, d+s online AG is stepping up its restructuring program,
which comprises both the production and administrative divisions.
To this end, the company plans to put its workers on short time
at the Hamburg, Parchim and Frankfurt/Oder locations, which will
affect approx. 350 positions (on a full-time basis).
And additional staff cut for operational reasons of approx. 65
positions is planned for the administrative division of the
company.
Once these measures have been implemented, the company expects to
generate a positive cash flow again starting in October 2002.
Contact Information:
Dr. Jorg Schillinger
d+s online AG
Unternehmenskommunikation
Telephone: 040/ 4114-3900
DIALOG SEMICONDUCTOR PLC: Reports 2Q02 Results
----------------------------------------------
* Revenues in line with pre-announcement at EUR 17.1 million
* New production orders for next generation mobile phones
* Two design wins from new wireless clients
* Acquisition of Sarnoff's CMOS imaging business
* Agreement with Bosch to collaborate on High Voltage CMOS
Technology
Dialog Semiconductor Plc -- www.dialog-semiconductor.com --
reported on Wednesday sales of EUR 17.1 million in the second
quarter of 2002. Dialog also received production orders for the
next generation of mobile phones and two design wins from new
wireless clients. The increased research and development expenses
include the cost of a CMOS imaging sensor family for mobile
phones, PDAs, digital cameras and other applications. Included in
the general and administrative expenses are legal fees related to
acquiring this CMOS imaging technology and business from the
Sarnoff Corporation. Net loss was EUR 4.1 million resulting in a
loss per share of EUR 0.09 for the quarter.
The revenues of EUR 17.1 million reflect the ongoing low level of
trading in the semiconductor and wireless industries. Dialog
achieved important milestones during the past three months
despite these weak conditions prevailing.
The acquisition of the CMOS imaging business and related
intellectual property from Sarnoff brings together complementary
skills, which will result in advanced camera on a chip products.
Dialog has proven mixed signal circuit design skills and offers a
high volume fables manufacturing capability.
Sarnoff has developed unique CMOS active pixel sensor (APS)
designs, utilizing patent protected imaging intellectual
property. Major features of the CMOS APS design are an extended
dynamic range (XDR(R)) and individual pixel addressing to reduce
column overload.
The combination of these two features provides natural looking
images, a low level of blooming and a response time close to
human vision standards.
The resulting products can be fabricated using standard foundry
rules. Dialog also entered into an agreement with Bosch, the
world's second largest supplier of automotive technology, to
collaborate on the development of a high voltage CMOS technology
for system on chip (SoC) solutions.
Such technology is important because it enables the integration
of high performance analog circuits, embedded flash memory,
microcontroller, high-density digital logic and high voltage
(40V) circuits on a single chip.
Integrated systems on a chip are progressively capturing a
significant share of the global chip market. The first focus of
the development is the joint qualification of the technology for
single chip integrated circuits (ICs) to control small electrical
motors.
The Company's Interim Report as of June 30, 2002 is available at
www.dialog-semiconductor.com. The group's SEC filing (the full
quarterly report on Form 6-K) can be viewed on the NASDAQ website
www.nasdaq.com as well as on the NASDAQ Europe website
www.nasdaqeurope.com.
Dialog Semiconductor will hold a conference call to detail its
second quarter financial results and the outlook on July 24, 2002
at 4:00 pm UK-time (11:00 am Eastern time).
Dialog Semiconductor Plc - Selected Financial Data
(in thousands of EUR except 3 - months 3 - months
per share and employee data) ended ended Year ended
06-03-02 06-03-01 12-31-01
Earnings data
Revenues 17,051 25,490 100,519
EBITDA (3,286) (101) 3,493
EBIT (operating profit/loss) (7,016) (14,935) (23,199)
Research and development (8,617) (8,421) 31,256
Net income (loss) (4,136) (9,323) (41,679)
Cash flow from operations (1,806) (530) 15,139
Balance Sheet data
Cash and cash equivalents 38,092 9,868 32,626
Shareholders' equity 154,209 191,301 157,706
Total assets 172,275 210,034 178,443
Capital expenditure 1,029 1,061 3,157
Share data
Basic earnings (loss) per share (0.09) (0.21) (0.95)
Number of shares issued
(in thousands, period end) 44,069 44,069 44,069
Other data
Employees (period end) 285 291 287
Investor Relations
Corporate Calendar
October 23, 2002
Release of third quarter results
Dialog Semiconductor develops and supplies mixed signal component
and system level solutions for wireless communications,
automotive and industrial applications.
Dialog's innovative products developed in 100% CMOS are used by
major OEMs (original equipment manufacturers) across the world.
The company focuses on high volume applications where it can
exploit its mixed signal expertise, IP design library and
effective execution from specification to delivery.
The company is headquartered near Stuttgart, Germany with
additional design facilities in the UK, the USA, Sweden, Austria
and Japan.
Dialog Semiconductor Plc is listed on the Frankfurt (Neuer Markt:
DLG), on the NASDAQ (DLGS) and NASDAQ Europe (DLGS) exchanges and
included in the Nemax50 since December 27, 2001.
Contact Information:
Dialog Semiconductor
Birgit Hummel
Neue Stra e 95
D-73230 Kirchheim/Teck - Nabern
Telephone: +49-7021-805-412
Email: birgit.hummel@diasemi.com
=========
I T A L Y
=========
FIAT SPA: Redundancy Plan May Affect 550 Employees in Italy
-----------------------------------------------------------
A document released on Wednesday revealed that troubled carmaker
Fiat SpA may have to resort to 550 more job cuts as part of its
plan to reduce a debt pile and deep losses, a report obtained
from Reuters said.
Earlier, the carmaker had already announced 2,887 job cuts,
mostly blue-collar ones in Italy.
The company issued a document after discussing with unions, that
indicated 550 jobs are likely to go at its Power Train joint
venture with General Motors Corporation (GM), the news outfit
said.
But has to face Italy's metalworkers' union Fiom-Cgil, which
rejected the proposed job reduction plan. Fiom-Cgil's head
reasoned that Fiat did not show enough evidence justifying job
cuts are needed in its restructuring, the daily said.
Other unions have agreed with the company's mobility scheme in
which redundant workers are paid part of their salary from social
security for a period of time, the paper said.
Fiat is currently seeking ways to cut costs and generate money to
slash its debt worth an estimated EUR30 billion, the daily
reported.
Previously, it sold 34% of its Ferrari sports car group to
Milan's Mediobanca.
Fiat's loss-making unit Fiat Auto, analysts expect would be sold
to General Motors in 2004 under a "put" option, Reuters said.
=====================
N E T H E R L A N D S
=====================
UNITED PAN-EUROPE: Bondholders Reach Deal on Recapitalization
-------------------------------------------------------------
UnitedGlobalCom, Inc. -- www.unitedglobal.com -- the largest
shareholder and creditor of United Pan-Europe Communications NV
(UPC), and an ad-hoc committee representing holders (Bondholders)
of UPC's Senior Notes and Senior Discount Notes (UPC Bonds),
announced Wednesday an agreement in principle on a
recapitalization plan for UPC.
As expected, the agreed recapitalization will substantially
delever UPC's balance sheet through the exchange of approximately
USD5.4 billion accreted value of debt into equity of a new
holding company of UPC (New UPC).
The agreement, which is subject to documentation among UGC, UPC
and the ad-hoc committee of Bondholders and certain other
approvals and conditions, consists primarily of the following key
terms:
-- UGC will receive approximately 65.5% of New UPC's equity
for the exchange of its USD1.6 billion in UPC Bonds and its
USD918 million Belmarken Loan;
-- Third-party Bondholders will receive approximately 32.5%
of New UPC's pro forma equity for the exchange of their USD2.9
billion in UPC Bonds;
-- Approximately 2% of the New UPC's pro forma equity will
be available for UPC's existing preferred and ordinary
shareholders, including UGC;
-- In addition, UGC will agree to purchase up to EUR 100
million in New UPC common stock at the consummation of the UPC
restructuring subject to reduction if UPC sells any assets or
raises any non-dilutive capital in the interim. UGC will
purchase the stock at the valuation implied by the restructuring.
The third party Bondholders will have the option to participate
pro rata in the equity issuance; and
-- The third-party Bondholders will have certain board
representation and minority rights.
Gene Schneider, Chairman and CEO of UGC, commented: "This is a
very good transaction for our stockholders. We are excited about
increasing our ownership in our largest and most important
operating business. UPC will emerge from this restructuring with
one of the strongest balance sheets in the European media and
telecom sector at a time when it's operations are achieving
record financial results."
Michael Kramer, a managing director at Greenhill & Company, which
is serving as advisor to the ad-hoc Bondholder committee, added:
"We are pleased to have reached an agreement in principle with
UGC and look forward to completing the documentation in the near
future."
The transaction is expected to close in the first quarter of
2003.
UPC is expected to continue to conduct normal operations during
the implementation of the restructuring which will primarily
affect financial creditors of UPC. Suppliers of UPC are expected
to be paid in the ordinary course of business.
About UnitedGlobalCom
UGC is the largest international broadband communications
provider of video, voice, and data services with operations in 26
countries. At March 31, 2002, United's networks reached, in
aggregate, 18.9 million homes and nearly 13 million customers,
including 11.2 million video customers, 901,500 telephony
subscribers and 845,500 high speed Internet access subscribers.
In addition, its programming business had approximately 43.6
million subscribers worldwide.
UGC's significant operating subsidiaries include UPC, the largest
pan-European broadband communications company; VTR GlobalCom, the
largest broadband communications provider in Chile; and Austar
United Communications, a leading satellite, cable television and
telecommunications provider in Australia and New Zealand.
Contact Information:
Rick Westerman - Chief Financial Officer
Investor Relations / Corporate Communications
Telephone: (303) 220-6647
Email: rwesterman@unitedglobal.com
=========
S P A I N
=========
TERRA LYCOS: Improves EBITDA By 51% Over 2Q of Last Year
--------------------------------------------------------
EBITDA margin was -20%, an improvement of 16 percentage points,
exceeding the Company's previously announced projections.
--Second quarter revenue was equivalent to 174 million constant
first-quarter euros, or 9% more than the first quarter of 2002,
which is in the middle of the Company's projected revenue range
for the period. The exchange rates impacted revenue by -12
million euros for the second quarter of 2002, since 79% of
revenue derives from currencies other than the euro, all of which
have been devalued.
--The current-euro revenue figure for the quarter, which does not
take into account the monetary effect explained, was 162 million
current euros, an increase of 1% over the first quarter of 2002
--Earnings before interest, taxes, depreciation and amortization
(EBITDA) was -32 million euros, an improvement of 33 million
euros, or 51%, over the second quarter of the previous year.
Operating expenses were reduced by 23% during the same period, a
savings of 33 million euros.
--Net income improved 52% over the same period of the previous
year, for a gain of 113 million euros.
--Terra Lycos ended the quarter with 2.3 million paying customers
for access, communications and portal services, growing 439,000
over the previous quarter.
--The company ended the quarter with 301,000 ADSL customers, 125%
more than the second quarter of 2001.
Terra Lycos, the largest global internet network, today announced
its financial results for the second quarter of fiscal year 2002.
Revenue
Terra Lycos - www.terralycos.com -- earned revenue of 162 million
euros in the second quarter, 1% above the previous quarter. This
revenue figure was impacted by unfavorable exchange rates because
of the appreciation of the euro and the fact that 79% of all
revenue derives from currencies other than the euro. Applying the
same average exchange rates as in the previous quarter, the
Company earned 174 million in constant euros an increase of 9%
over the previous quarter and in the middle of the projected
range the Company announced last quarter.
In the second quarter, the media business, including advertising,
integrated marketing solutions, electronic commerce and content
and portal services subscriptions, accounted for 60% of total
revenue, and the access and communications services business
accounted for 40%.
The continuing difficult advertising market, particularly in the
United States, caused media revenue to decline during the second
quarter. However, the Company's media revenue from Spain and
Latin America increased by 17% in the second quarter compared to
the same quarter of 2001.
Terra Lycos continued to form strategic commercial alliances with
leading institutions and companies in other sectors. Examples
include the launch, with Uno-e, of a new line of VISA cards
within the framework of the VISA "Safe Electronic Trade" program;
and the agreement entered into with El Corte Ingles in Spain to
launch the market's leading Food Channel, in collaboration with
the Ministry of Agriculture, Fishing and Food.
The Company is continuing to execute on its "OBP" (Open, Basic,
Premium) strategy by charging for premium services and content.
OBP initiatives generated 16 million euros in revenue this
quarter, 17% more than the first quarter of 2002. Thus,
communications services and portal subscriptions have contributed
to Terra Lycos' diversification of revenue
During the quarter, Terra Lycos designed an organizational model
aimed at creating and developing products to maximize its
position as a global company. Terra Lycos consolidated all global
and product management-related functions under a single manager
and within a single division, known as Global Operations. With
the new structure, the company expects to accelerate growth
through the launch of new products, and at the same time realize
savings through greater cost effectiveness.
Operating Expenses
Terra Lycos continues to increase management efficiency through
improvement in work processes, which enables ongoing gradual
reduction in operating expenses. This quarter, the Company cut
its expenses by 23% compared to the second quarter of the
previous year, a savings of 33 million euros.
Operating Margin - EBITDA
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the second quarter was -32 million euros, the
Company's best performance to date and in line with the positive
evolution of EBITDA since the third quarter of 2000. EBITDA
margin is -20%, an increase of 16 percentage points over the same
period the previous year and an improvement over the Company's
previously announced projections.
Net Income
Net income for the second quarter of 2002 was -103 million euros,
an improvement of 113 million euros over the same period the
previous year, and 27 million euros over the previous quarter.
During the quarter, amortization of goodwill from previous
acquisitions totaled 63 million euros, which represents more than
61% of net income and has no impact on the Company's cash
position.
Cash
Efficient cash management gives Terra Lycos one of the strongest
cash positions in the sector allowing it to finance its
operations as well as take advantage of market opportunities with
a view to ongoing profitable growth. At the end of the period the
Company had 1.9 billion euros in cash, which has also been
impacted by the exchange rates. During the second quarter, Terra
Lycos consumed 44 million euros.
Operating Income
Terra Lycos ended the quarter with 4.1 million access
subscribers, 1.3 million of which are paying subscribers, a 6%
increase over the same period the previous year. Among its
subscribers, 301,000 are ADSL customers, a 125% increase over the
second quarter of 2001, and an 11% increase over the previous
quarter.
In addition to access subscribers, at the close of the second
quarter of 2002 the Company had recurring revenue from its
920,000 communications and portal service subscribers, an
increase of 77% over the previous quarter.
Therefore, at the close of the quarter, Terra Lycos had a
portfolio of 2.3 million paying subscribers for access and
communications services products, as well as portal products and
services, a 24% increase over the previous quarter.
The number of unique users in June 2002 rose 13% over the same
period the previous year to 116 million. Average daily page views
were 416 million.
Joaquim Agut, executive chairman of Terra Lycos, declared that
"the second quarter results, given the adverse market situation,
satisfactorily reflect the way Terra Lycos is advancing toward
profitability. These results, which place us among the world's
Internet leaders, demonstrate our commitment to innovation,
launching products that allow us to capture and retain customers
and obtain new sources of revenue, along with efficient
management based on solid business practices."
About Terra Lycos
Terra Lycos is a global Internet group with a presence in 42
countries in 19 languages, reaching 116 million individual users
per month worldwide. The group, which grew out of the acquisition
by Terra Networks, S.A. of Lycos, Inc., which took place in
October 2000, is one of the most widely visited web sites in the
United States, Canada, Europe, Asia and Latin America, and is the
largest access provider in Spain and Latin America.
The Terra Lycos network of sites includes Terra in 17 countries,
Lycos in 25 countries, Angelfire.com, Atrea.com, Azeler.es,
Bumeran.com, Direcciona.es, Educaterra.com, Emplaza.com,
Gamesville.com, HotBot.com, Ifigenia.com, Invertia.com, Lycos
Zone, Maptel.com, Matchmaker.com, Quote.com, RagingBull.com,
Rumbo.com, Tripod.com, Uno-e.com and Wired News (Wired.com),
among others.
Terra Lycos, headquartered in Barcelona and with operating
centers in Madrid and Boston, as well as elsewhere, is traded on
the Madrid stock exchange (TRR) and the Nasdaq electronic market
(TRLY).
TERRA LYCOS
Consolidated Income Statement
(Figures in millions of euros - Spanish GAAP)
April- June April- June Var.%
2002 2001
-----------------------------------------------------------------
Revenues:
Media 96.4 110.7 -13%
Access and Services 65.3 69.0 -5%
Total Revenues 161.7 179.7 -10%
(a)(constant Euro Q2 01) 178 179.7 -1%
-----------------------------------------------------------------
Cost of Revenues (80.5) (98.5) -18.3%
Gross Profit 81.2 81.2 0%
Gross Profit % 50.2% 45.2% +5p.p.
Operating Expenses:
R&D (27.7) (34.7) -20.2%
Marketing & Sales (55.5) (84.8) -34.6%
General and Administrative(30.4) (27.1) +12.2%
Total Operating Expenses (113.6) (146.6) -22.6%
EBITDA(b) (32.3) (65.5) -50.6%
-----------------------------------------------------------------
EBITDA Margin -20% -36% -16p.p.
-----------------------------------------------------------------
Depreciation/ non-cash
charges (41.8) (48.7) -14.1%
Financial Income (loss) 19.3 38.9 -50.4%
Shares in gains (losses) by
Equity method (18.1) (78.9) -77.1%
Amortization of Goodwill (63.2) (142.6) -55.7%
Extraordinaries and other (1.6) (7.9) -79.5%
Income before taxes (137.8) (304.7) -54.8%
-----------------------------------------------------------------
Corporate Income Tax 32.2 87.8 -63.3%
Minority Interest 2.2 0.9 +144.4%
-----------------------------------------------------------------
Net Income (103.3) (216) -52.2%
-----------------------------------------------------------------
(a) The revenues for Q2 02 at the exchange rate of the same
period of the previous year equals 178 million euros, or 174
millon euros at Q1 02 exchange rate.
(b) EBITDA figure for both periods does not account for leases in
the US, which are included in the amortization figure
-----------------------------------------------------------------
OPERATING RESULTS
Q2 Q2 %
(million users) 2002 2001 Variance
-----------------------------------------------------------------
PAYING
SUBSCRIBERS
Narrow Band Access 1.05 1.14 -8%
Broad Band Access 0.30 0.13 +125%
Communications & Portal
services 0.92 n/a n/a
-----------------------------------------------
TOTAL PAYING SUBSCRIBERS 2.27 1.27 +79%
-----------------------------------------------------------------
FREE
SUBSCRIBERS Narrow Band Access 2.77 3.02 -8%
-----------------------------------------------------------------
TOTAL
SUBSCRIBERS 5.04 4.29 +18%
-----------------------------------------------------------------
UNIQUE USERS 116 103 +13%
-----------------------------------------------------------------
DAILY PAGE VIEWS
(millions) 416 460 -10%
-----------------------------------------------------------------
Contact Information:
Jose Carlos Duran
Investor Relations:
Telephone: +34-91-452-3278
Email: josec.duran@corp.terralycos.com
===========================
U N I T E D K I N G D O M
===========================
ASW HOLDINGS: Steel Manufacturer Will Cut 800 Jobs in Cardiff
-------------------------------------------------------------
ASW Holdings Plc will lay off 800 workers by the end of July, a
report from This is London said.
The daily said the company has not found a buyer since it went
into receivership earlier this July following its failure to
secure continued support from banks.
The job cuts will only affect Babcock's Cardiff plant. About 130
employees at a nail factory and the Contistretch section of the
Cardiff plant will not be made redundant. Its plant at Sheerness,
Kent, will also continue to operate.
ASW, which was formed 20 years ago as a joint venture between
British Steel and manufacturing firm GKN, makes specialist steel
products, particularly reinforcing items for the building sector.
It started facing financial woes when its margins were affected
by a surge in cheaper eastern European imports and an increase in
the price of the scrap used by ASW for recycling.
BIG FOOD: Q1 2002 Forecasts Profit Warning for Iceland Foods
------------------------------------------------------------
Introduction
Following a comprehensive first quarter forecast for the Big Food
Group, it has been established that Iceland Foods will produce a
shortfall in profit at the half year, Big Food announced
Thursday.
Although there has been a decline in market conditions, the
trading performance at Iceland Foods has continued to disappoint.
Booker is making satisfactory progress.
Sales and Profit
The last update on 10 July 2002 covered the thirteen-week period
to 28 June 2002. In the subsequent three weeks, like for like
sales have been:
Group - 1.0%
Booker
- Tobacco - 1.9%
- non tobacco 3.3%
Woodward 12.4%
Iceland Foods - 8.3%
Sales at Iceland Foods have continued to decline, particularly as
a result of a too aggressive move towards a value driven
proposition. Whilst the direction of the change is consistent
with the Group's strategy, the pace and extent of this
repositioning has clearly been greater than our customers would
have liked.
This move required an investment in margin to generate sales and
the targets for both of these elements have not been met. Whilst
the long term strategy of moving to a consistent value
proposition remains appropriate, the Group has reacted to these
trading issues at Iceland Foods by restoring promotional activity
whilst we progressively implement our strategic plan.
It is expected that all of the impacts on sales and profit will
be realized during the first half with Iceland's operating profit
of o8 million for the twenty-four weeks to 13 September 2001
becoming an operating loss of a similar amount for the
corresponding period in 2002/03.
The performance of the new concept stores continues to be
encouraging for the long-term strategic outlook.
Booker's sales performance continues to be positive and its
underlying profitability is in line with expectations as are all
other parts of the Group.
Net Debt
The average net debt for the period 18 June to 19 July 2002 was
o232 million. This remains a positive indicator of the Group's
performance so far and will increase as the investment plans are
fully implemented.
Contact Information:
Bill Grimsey
Chief Executive
The Big Food Group
Telephone: 020 7796 4133
BIOCOMPATIBLES INTERNATIONAL: Court Approves Capital Reduction
--------------------------------------------------------------
The Board of Directors of Biocompatibles announced Thursday that
the High Court yesterday confirmed the Company's application to
reduce its share premium account by approximately o100million.
The amount of 70 pence per share will be paid on Friday, 2 August
2002 to shareholders on the register at the close of business on
Friday, 26 July 2002.
Subject to the reduction of capital becoming effective, the
existing ordinary shares will be sub-divided and consolidated to
allow comparability with the share price before implementation of
the repayment of capital.
Accordingly, shareholders on the register at the close of
business on Friday, July 26, 2002 will receive 9 new ordinary
shares for every 29 existing ordinary shares then held.
The new ordinary shares will replace the existing ordinary shares
and be identical in all respects to those shares, save in respect
of their nominal value which will increase from 5 pence to 16 1/9
pence.
It is intended that the CREST accounts of shareholders who hold
their existing ordinary shares in uncertificated form will be
credited with the new ordinary shares on Monday, 29 July 2002.
Shareholders who hold their existing ordinary shares in
certificated form are expected to be sent a new share certificate
on Monday, August 5, 2002.
It is also expected that dealings in the existing ordinary shares
will cease at the close of business on Friday, July 26, 2002 and
that admission of the new ordinary shares will become effective
and dealings will commence on Monday, July 29, 2002.
In the circular to shareholders dated 5 April 2002, the Board
indicated that it intended to consider future returns of capital
following the release of amounts subject to the escrow and
restricted cash arrangements put in place under the Share Sale
Agreement with Abbott Laboratories.
There can be no certainty as to whether any or all of such
amounts will become available for a further return of capital to
shareholders. In addition, it was expected that any further
returnof capital would require shareholders' approval and
confirmation by the High Court.
The Board would expect to send a further circular to shareholders
to obtain approval at an Extraordinary General Meeting or to
obtain shareholder approval for the use of proceeds within the
business.
The Company will announce its interim results on Thursday, 26
September 2002.
Contact Information:
Biocompatibles International plc
Swag Mukerji
Finance Director
UK Tel: +44 (0) 1252 732 732
Biocompatibles International plc -- www.biocompatibles.co.uk --
is focused on the application of Phosphorylcholine (PC) to
medical devices to improve patient quality of life.
In June 2002, Biocompatibles announced a new development
programme, PC Gel Systems, a gel matrix containing PC
TechnologyTM that potentially can be used in a variety of areas
including embolisation, chemoembolisation, filling of aneurysms
and bulking of tissue to compensate for a loss of shape or
elasticity.
Biocompatibles intends to commence clinical trails for
embolisation in 2003. Embolisation is the blocking of the blood
flow to a tumour or vascular malformation.
PC Technology has been successfully commercialised in a broad
range of products, including the BiodivYsio(R) line of
cardiovascular stents which has been acquired by Abbott
Laboratories and the Proclear(R) family of soft contact lenses,
now owned by The Cooper Companies, Inc. Biocompatibles' sales of
PC TechnologyTM products exceeded o40million in 2001.
Biocompatibles has synthesised PC, which occurs naturally in the
human cell membrane, and has incorporated it into a novel range
of polymers. Patented PC TechnologyTM reduces the body's
response to foreign materials and has demonstrated potential as a
carrier for therapeutic agents.
DATAMONITOR PLC: Issues Six-month Interim Results
-------------------------------------------------
SUMMARY
- Revenue decreased by 18% to GBP15.4m (2001: GBP18.7m)
- Premium Services revenue decreased by 3% to GBP11.8m (2001:
GBP12.2m) now representing 77% of total revenues (2001: 65%)
- EBITDA loss increased to GBP2.3m (2001: GBP0.4m loss)
- Loss before tax of GBP3.4m (2001: GBP0.5m loss)
- Strong cash balance of GBP13.3m
- Cost reduction programmes delivering anticipated savings
Commenting on the results, Mike Danson, Chief Executive Officer,
said:
'We have continued to experience challenging trading conditions
during the first half of the year particularly in the Technology
sector. We have acted rapidly to deal with the reduction in
revenues by managing our costs and making management changes.
Visibility in our markets in the short term remains limited and
we expect our revenue in the second half to be broadly in line
with the first half.
'Over the longer term, the company remains confident that its
focus on subscription products and its spread across sectors will
allow it to grow by attracting new clients and increasing its
Premium Services revenue.'
Datamonitor -- www.datamonitor.com -- is a premium business
information company specializing in industry analysis. Through
proprietary databases and wealth of expertise, the company
provides clients with unbiased expert analysis and in depth
forecasts for six industry sectors: Automotive, Consumer Markets,
Energy, Financial Services, Healthcare and Technology.
Datamonitor's objective is to be the premier global research and
analysis company in each of these six industry sectors. The key
elements of our strategy are:
- To increase sales to our existing customers and to expand our
customer base. Each industry sector has growth potential that
will generate economies of scale as revenues increase against a
relatively fixed cost base.
- To extend our international scope. Although our analysts, our
research base and our products are all international, our
customer base is concentrated in Europe and North America. We
have plans to extend our geographic spread through a number of
initiatives.
- To exploit our intellectual property. Our primary aim is to
reap the rewards from the significant investment our existing
products represent by adding revenue while keeping our cost base
relatively fixed. We will, however, continue to evaluate new
opportunities to expand our business through targeted new product
development.
- To enhance our Internet distribution. Our publishing platform
was designed to provide an ideal platform from which to expand
our Internet distribution. Although the site has only been on
line for a short time at this point, the initial indications are
good Datamonitor's key product and services include:
1. Premium services products:
- Strategic Planning Programmes (or SPPs) and other subscription
products. Products that combine a variety of market reports,
periodic written analysis and briefings on industry trends and
events, forecasting models, supporting data and access to its
analysts. Customers subscribe to these products as an annual
prepaid package.
- Custom solutions. Discrete assignments that Datamonitor
undertakes
on request from its customers as extensions of its customer
relationships.
2. Other information products:
- Market reports and Dashboard. Standardized reports and a
business information service covering essential data on
companies, industries and countries on a global basis.
CHIEF EXECUTIVE'S REVIEW
Market conditions have remained challenging over the first six
months of the year and discretionary budgets continue to be
restricted. This impact has been most pronounced in the
Technology sector, but it has also affected our Financial
Services business.
We are pleased that our Healthcare and Energy businesses have
continued to generate strong revenue growth. We have taken
prompt action to respond to current market challenges by
reducing our cost base and recently announced senior management
changes.
FINANCIAL REVIEW
Revenue in the first half of the year decreased by 18% to
GBP15.4m (2001: GBP18.7m), principally reflecting the continued
decline in the Technology sector and the withdrawal of product
last year in the Consumer and Automotive sectors.
Gross profit in the first half of the year decreased by 23% to
GBP9.2m (2001: GBP12.0m). Gross margin decreased to 60% (2001:
65%) reflecting the fixed elements in cost of sales.
Sales and marketing costs decreased in absolute terms to GBP6.0m
(2001: GBP7.0m) as a result of savings made through an efficiency
review.
Excluding GBP0.6m of one off costs connected with the recent
management changes and the cost reduction programme, general and
administrative costs decreased in absolute terms to GBP5.0m
(2001: GBP5.5m).
EBITDA loss increased to GBP2.3m (2001: GBP0.4m) as a result of
our high operational gearing. Our operating loss also increased
to GBP3.6m (2001: GBP1.1m), also impacted by a higher
depreciation charge as a result of higher levels of capital
expenditure in 2001.
The loss before and after tax was GBP3.4m (2001: GBP0.5m). This
represented a loss per share of 4.9p (2001: 0.7p).
We still have a strong cash balance at the half year with net
cash of GBP13.3m at 30 June 2002 (31 December 2001: GBP18.8m).
The reduction in net cash was primarily due to the funding of
operating losses and the increased working capital requirement as
a result of falling deferred revenues, which have decreased by
approximately GBP1.2m since 31 December 2001 to GBP8.1m (30 June
2001: GBP9.3m).
Cash was also impacted by the acquisition of shares by the
employee share trust (GBP0.8m) and one off costs relating to
management changes and the cost reduction program (GBP0.6m).
Capital expenditure in the first half of the year was GBP1.6m,
but is expected to be significantly lower in the future.
OPERATIONAL REVIEW
We have recently put in place a number of initiatives to protect
revenues in the short term; these include strengthening our
customer databases, improving the capability of our sales teams
and deepening customer relationships through selling additional
content to our existing customers.
Our electronic publishing platform, soft launched in November
2001 and actively marketed over this first half, has started to
realize some direct revenue gains by improving reach (measured by
traffic and customer registrations) and customer satisfaction
(through both the improved functionality and the new range of
content).
In addition we have achieved a number of cost benefits such as
our increased ability to carry out on line, rather than paper
based, surveys.
Premium Services
Revenue from our Premium Services (Strategic Planning Programmes
(SPPs), Other Subscription Products and Custom Solutions)
decreased by 3% to GBP11.8m (2001: GBP12.2m). Premium Services
now represent 77% of our revenue, above the long-term target that
we set at the time of the IPO.
Strategic Planning Programmes and Other Subscription Products
Our subscription products benefit from high renewal rates and
deeply embedded customer relationships. Our aim is to continue to
build this high-quality revenue stream by exploiting the research
and analysis base within our existing broad range of SPPs and
Other Subscription Products to add revenue to the relatively
fixed cost base.
The development of our Other Subscription Products means that the
distinction between these products and our SPP's is becoming less
clear and therefore we are taking this opportunity to provide
greater information on both SPP's and Other Subscription
Products.
Revenue from the sale of SPP's and Other Subscription Products
increased by 7% to GBP9.1m (2001: GBP8.5m). However, sales of
these products declined in the period.
At 30 June 2002 we had 1,110 SPP and subscription contracts
(2001: 1,092). Average contract value fell marginally, by 3% to
GBP15,400 (2001: GBP15,900).
Average contracts per customer fell by 3% to 1.21 (2001:1.25).
Some of our Other Subscription Products are made available to
academic institutions and other organizations at discounted
rates.
Excluding these contracts (which have a contract value of less
than GBP10,000) we had, at June 30, 2002, 617 SPP and
subscription contracts (2001: 698). Average contract value of
these contracts increased by 11% to GBP25,200 (2001: GBP22,800).
Average contracts per customer increased by 6% to 1.37 (2001:
1.29). Within this, SPPs (our branded continuous advisory
services) continue to be our largest selling product area with
revenue increasing to GBP6.7m (2001: GBP6.6m).
Average contract value increased by 13% to GBP25,900 (2001:
GBP23,000). Average contracts per customer increased by 6% to
1.43 (2001:1.35). The total number of SPP contracts was 469 at
June 30, 2002 (2001: 580), reflecting the sharp decline in our
Technology and consolidation in both the Financial Services and
Healthcare sectors.
Our renewal rate fell to 56% at 30 June 2002 (65% at 30 June
2001). This reduction was caused by lower renewals in the
Technology and Professional Services sectors, excluding these
sectors the renewal rate was 66% (2001: 66%).
Custom Solutions
Demand for Custom Solutions, discrete assignments undertaken on
behalf of clients, improved from the second half of last year,
but has not recovered to the levels experienced in the comparable
period. First half revenue decreased to GBP2.7m (2001: GBP3.7m)
reflecting the budget pressures that affected many of our
customers.
Other Information products
Revenue from the sale of reports and distribution agreements
declined during the first half to GBP3.5m (2001: GBP6.5m) and now
represents 23% of revenue.
This reduction in revenue has been more pronounced than
anticipated as discretionary budgets continue to be restricted,
particularly in the Technology and Financial Services sectors.
A number of customers from whom we received up front distribution
fees in 2001 have now gone out of business. However, we have
continued to develop the relationships with the blue chip
distributors that were signed in the second half of 2001 and we
are confident that these distribution agreements will provide a
sound basis for future revenue growth.
Cost Savings
In response to continued challenging market conditions, we have
taken prompt action to reduce our cost base.
The company has already started to benefit from the cost
reduction measures announced in the last quarter of 2001, which
have now delivered the expected annualized costs savings of
GBP2.2m. In addition to these actions, we announced in June that
we had taken additional measures in the first half of 2002 to
reduce total annual costs by a further GBP2.0m in a full year.
These cost savings were achieved through a targeted redundancy
program and a series of measures to reduce our non-headcount
costs in the general and administrative areas.
Board Changes
As announced in the trading update on 12 June 2002, the Company
has made changes in its senior management. On 1 July 2002 I was
re-appointed Chief Executive Officer, following the resignation
of Tom Gardner.
In addition, Ian Pratt has resigned as a Director of the Company
with effect from 23 July 2002, but will continue as a Chief
Financial Officer until after the recruitment of a successor and
an appropriate transition period. A search is underway to find a
successor.
Effective July 23, Bradley Hanson, a non-executive Director
appointed by Reuters in 1998 has also resigned from the Board and
will be replaced by Graham Albutt.
Graham is President of the Business Technology Group at Reuters,
which consists of 4,000 staff worldwide. Prior to this
appointment Graham was Chief Information Officer at Reuters.
Graham's broad experience of the business information industry,
gained over 15 years at Reuters, will be of considerable benefit
to us. Graham will join the audit and remuneration committees.
Geoffrey Dunn, one of the Company's three non-executive
directors, has resigned with effect from September 1, 2002 in
order to concentrate on his other activities.
We have initiated a search for a non-executive Chairman.
Prospects
Visibility on the second half is limited and revenues will be
dependent on some major contract renewals being achieved; on this
basis, the Company expects that revenue in the second half of the
year will be broadly in line with that of the first half.
In light of sustained challenging market conditions, we have
acted rapidly to deal with the reduction in revenues by
continuing to manage costs tightly across the business.
The actions taken on costs, which will start to be felt
immediately in the second half of the year, will allow us to
return to our path to profitability.
Although visibility in our markets is still limited, the Company
remains confident that its focus on subscription products and its
spread across sectors will allow it to grow, over the longer
term, by attracting new clients and increasing premium services
revenue.
Mike Danson
Chief Executive Officer
24 July 2002
The company's financial review, consolidated profit and loss
statement and balance sheet may be viewed at:
http://bankrupt.com/misc/monitor1.pdf
DATAMONITOR PLC: Appoints Mr. Graham Albutt as Non-Exec Director
----------------------------------------------------------------
Datamonitor plc announces that Graham Albutt has been appointed
non-executive Director to the Board by Reuters Group PLC.
This appointment will be effective from July 23, 2002. Graham
Albutt replaces Bradley Hanson, a non-executive Director
appointed by Reuters Group PLC in 1998, who has resigned from the
Board.
Graham is President of the Business Technology Group at Reuters,
which consists of 4,000 staff worldwide. Prior to this
appointment Graham was Chief Information Officer at Reuters
America. Graham's broad experience of the business information
industry, gained over 15 years at Reuters, will be of
considerable benefit to us. Graham was a director of Cambridge
Technology Partners between 1999 - 2000. Graham will join the
audit and remuneration committees.
There are no disclosures to be made in respect of paragraph 6.F.2
(b) to (g) of the Listing Rules of the UK Listing Authority.
Contact Information:
Mike Danson
Chief Executive Officer
Datamonitor Plc
Telephone: 020 7675 7000
INVENSYS PLC: Releases Update on Current Trading at AGM
-------------------------------------------------------
Invensys plc - www.invensys.com --, the global leader in
production technology and energy management, on Wednesday gave an
update on current trading at its Annual General Meeting.
Addressing shareholders at the Meeting, Chairman Lord Marshall
said:
"In our preliminary results at the end of May, we highlighted
early signs of recovery in orders from the automation and
controls sectors, particularly in the US. This was balanced by
continuing weakness in global technology markets, indicating that
economic recovery remained fragile.
"In overall terms, we have seen no change in the trading
environment since our statement at the end of May. As we said at
the time, US commercial construction is affected by over-capacity
and IT services are weak. However, some of our consumer-driven
businesses demonstrate continuing improvement and certain of our
Industrial Businesses - together with Rail Systems and parts of
Power Components - are seeing signs of greater activity.
"Assuming these conditions continue, we expect trading in the
first half to be around the levels of the previous six months, in
line with market expectations.
"At the same time, our programme of investment in new
capabilities and processes is well underway and we expect
benefits to begin to emerge in the second half."
In proposing the resolution to the Meeting for the re-election to
the Board of Kathleen O'Donovan, Lord Marshall said,
"You will remember that in my remarks last year, I referred to
Kathleen having expressed her wish to stand down once post-merger
work was complete, and expressed our pleasure that she had agreed
to stay on and work with Rick. Your Board and Executive
Management are focused on ensuring continuity of the excellent
job she is doing for us. Therefore in proposing this resolution,
I want you to know that we are planning for this by seeking to
recruit a Senior Vice President Finance. As and when this is
achieved and after a reasonable period of working with Kathleen,
the intention is that this person would replace Kathleen as
Finance Director."
Invensys plc, the international production technology and energy
management Group specialises in helping customers to improve
their efficiency, performance and profitability.
Invensys has over 75,000 employees and operates in over 80
countries, with its headquarters in London, England.
INVENSYS PLC: Issues 2002 Annual General Meeting Results
--------------------------------------------------------
Invensys plc confirms that all resolutions proposed at the AGM of
the Company held on 24 July 2002 were passed and the results of
the poll are as detailed in the table as follows:
http://bankrupt.com/misc/voting.pdf
Invensys plc -- www.invensys.com -- further confirms that two
copies of the resolutions passed as special business at the AGM
have been submitted to the UK Listing Authority, in accordance
with paragraphs 9.31 and 9.32 of the Listing Rules.
These resolutions will shortly be available to the public for
inspection at the UK Listing Authority's Document Viewing
Facility that is situated at:
The UK Listing Authority
25 The North Collonade
Canary Wharf
London E14 5HS
Telephone: 020 76761000
PACE MICRO: Sonera Chooses Pace-Vega Gateways For VoIP Service
--------------------------------------------------------------
Sonera - www.sonera.com --, Finland's leading provider of mobile
and advanced telecommunications will launch a new Voice Over
Internet Protocol (VoIP) telephony service on July 1 2002, using
VoIP gateways from Vegastream, part of the Pace Micro Technology
Group.
Using the Pace Vega100 VoIP gateway on their DSL network, Sonera
will deliver 'next generation' telephony services for the
residential market. Sonera's 'Puhekaista' or 'Voice Highway'
service will provide telephony via the PC, videoconferencing,
instant messaging, electronic phonebook, 'buddylist' with
presence information and network gaming.
The Pace Vega gateway links Sonera's traditional circuit switched
network to a next generation VoIP network. The gateway converts
voice into data packets for transportation over Sonera's network
using Internet Protocol (IP). Sending voice as data packets
enables Sonera to maximise the capacity of its network and
leverage investment in broadband through new, revenue-rich on-
demand features.
Sonera is one of 80 telecommunication companies worldwide now
deploying or trialing Pace Vega gateways. "The strengths and
benefits of VoIP are rapidly gaining attention," said Andy Trott,
Divisional CEO for Pace, "as telcos see opportunities to provide
richer services that compete with cable-based Internet service
providers who are rapidly expanding voice services."
According to industry analysts Frost & Sullivan, VoIP has
suffered from unfulfilled hype for several years but is finally
ready to live up to its potential, with anticipated sales of VoIP
gateways set to reach USD2.9bn in 2006.
"Sonera's deployment of VoIP services across Finland will
significantly raise the profile of VoIP technology," added Andy
Trott for Pace. "Sonera is renowned for its innovation and
forward-thinking whilst Finland is among the most mature
broadband and mobile markets in the world, with penetration rates
of mobile telephony at almost 80%. This powerful combination
means Sonera's VoIP service will be viewed as a test case by
telcos worldwide, of how next generation teleco services and
technologies can spur fresh growth.
"At the same time, Sonera's selection of Pace Vega gateways
testifies to Pace's expertise in designing and developing VoIP
technology. Pace engineers have worked closely with Sonera over
the past two years to develop bespoke technology solutions that
meet their specific technological and commercial needs. "
Jari Hakalin, Director of Sonera added: "Sonera has a huge base
of residential voice customers who are a ready market for next-
generation media services. By utilizing Pace's VoIP gateway
technology, we are able to meet this market demand, retain
existing customers and provide fresh, innovate services that
enhance the return on our investment in broadband."
Voice Over Internet Protocol (VoIP) is the method by which voice
is digitized and sent through the Internet in digital packets
rather than in the traditional circuit-committed protocols of the
public switched telephone network (PSTN).
Pace Micro Technology plc -- www.pace.co.uk -- is a pioneer of
digital technology for the home and has helped build the global
market for pay television services. Pace was the largest European
supplier of home gateways (set-top boxes) during 2000.
Its analogue and digital technology has been installed in over
thirteen million homes worldwide since it was founded in 1982.
The company is now actively involved in all digital platforms -
satellite, terrestrial, cable, wireless and xDSL - through
alliances with broadcasters, network operators and technology
partners in the UK, USA, Europe, Latin America, Australasia and
the Far East.
Pace's head office is in Shipley West Yorkshire, with further
offices in Bracknell, Cambridge, the USA and Hong Kong. The
company's shares are traded on the London Stock Exchange (PIC).
Vegastream is part of the Pace Micro Technology plc group, with a
mission to develop world beating, low-cost high-performance voice
over internet protocol (VoIP) products based upon international
communications standards.
Pace's Vega VoIP technology enables Network Operators to benefit
from integrated telephony services that will protect their
investment and enhance their business by providing a 'gateway'
between traditional and 'new world' telecommunications.
Sonera Corporation is a leading provider of mobile and advanced
telecommunications services. Sonera is growing as an operator in
addition to being a provider of transaction and content services
in Finland and selected international markets.
The company also offers advanced data solutions to businesses and
fixed network voice services in Finland and neighboring markets.
In 2001, Sonera's revenues totaled EUR 2.2 billion and profit
before extraordinary items and taxes was EUR 0.45 billion.
P&O PRINCESS: Releases Results For Quarter Ending June 30, 2002
---------------------------------------------------------------
Key points for the quarter *
* Operating profit increased by 6% to USD117.6 million (Q2 2001:
USD111.2 million), despite the disruption to the booking cycle
resulting from the events of September 11
* Pre-tax profit increased by 5% to USD98.9 million (Q2 2001:
USD93.8 million)
* Earnings per share/ADS ahead of expectations at 13.6c/USD0.54
(Q2 2001: 12.9c /USD0.52), an increase of 5%
* Passenger cruise days increased by 11% with occupancy at 101%
* Like for like reduction in net revenue yields of 6%, better
than the 7% reduction forecast in our previous trading update in
April
* Underlying unit costs reduced by 8%
2002 Outlook
* For the Group, overall like for like yield reduction for the
third quarter forecast at 6%, and for the year as a whole 5%.
This is at the upper end of the 5% to 6% range given at the time
of our last trading update in April 2002
* In North America, the proportion of Princess Cruises'
cumulative capacity booked for the year remains ahead of 2001,
with lower average yields for Q3. Encouragingly, yields and
bookings for Q4 are in line with the position this time last
year, which was before the events of September 11 disrupted the
booking cycle for Q4 2001
* Since our last trading update, pricing for bookings on Princess
Cruises has remained in line with the same period in 2001 and
booking volumes have, to date, not been significantly affected by
the recent political and economic uncertainties
* Booking position remains positive in UK and Australia
* In Germany, bookings for the established AIDA brand, with its
doubled capacity, have been strong. The new A'ROSA brand's
riverboats have booked well, although demand for the ocean cruise
product on A'ROSA Blu has not been as strong
* On track to achieve the underlying unit cost reduction target
of 7% for the year
* Expect to meet or exceed analysts' current expectations for
full year earnings of 40c-41c per share/USD1.60-USD1.64 per ADS,
excluding merger related costs
* comparisons are with the second quarter of 2001
Peter Ratcliffe, Chief Executive Officer of P&O Princess Cruises,
commented:
'Despite the disruption to our booking cycle from the events of
September 11, we have had another good quarter, increasing
profits over the equivalent quarter of the previous year. Price
reductions have been less than we forecast and we have been able
to absorb these reductions through continued unit cost
efficiencies.
'It is particularly pleasing to have been able to report year
over year an increase in earnings in each of the three quarters
since those tragic events of September 11. Great credit is due to
all our staff for making these results possible by operating more
efficiently whilst continuing to maintain the quality of the
vacations provided to our passengers.
'We continue to be encouraged by the resilience of our business
in North America. Bookings have maintained a good pace and to
date have not been significantly affected by recent political and
economic uncertainties. With our trading position in Europe and
Australia also remaining positive, the Group continues to benefit
from its global diversification.
'Given this positive booking position and with our cost
efficiency programs on target we believe that we can meet or
exceed the market's expectations for our full year earnings.
'We expect that by the end of September we will have received
decisions from all regulators on both our merger with Royal
Caribbean and the takeover proposal by Carnival. In the meantime,
we continue to focus on the optimization and development of our
own business. Our newly introduced multi-brand strategies in
the UK and Germany are maximizing our growth potential in these
two important markets. In North America, the growth and
modernization of our fleet are giving us the revenue potential
and cost structure to create significant value, and we
remain confident of the long term growth prospects for the
Princess brand.'
Contact Information:
P&O Princess Cruises plc
Caroline Keppel-Palmer
Telephone: +44 20 7805 1214
P&O Princess Cruises plc is a leading international cruise
company with some of the strongest cruising brand names: Princess
Cruises in North America;
P&O Cruises, Swan Hellenic and Ocean Village in the UK; AIDA and
A'ROSA in Germany; and P&O Cruises in Australia. It is a leading
provider of cruises to Alaska, the Caribbean, Europe, the Panama
Canal and other Exotic destinations.
The current complement of 19 ships and two river boats offering
31,130 berths is set to grow in the next two years with six new
ocean cruise ships and one river boat on order.
P&O Princess Cruises has approximately 20,000 employees worldwide
and carried over one million passengers in 2001, generating a
revenue of approximately USD2.5 billion (approximately GBP1.7
billion). Headquartered in London, P&O Princess Cruises' ordinary
shares are quoted on the London Stock Exchange and as ADSs on the
New York Stock Exchange (under the symbol 'POC').
P&O's latest profit and loss statement may be viewed at:
http://bankrupt.com/misc/PL.pdf.
Like for like is defined as movements in net revenue yields after
adjusting for changes in exchange rates and changes in the mix of
cruises.
Net revenue is defined as gross revenue (turnover) from the sale
of cruises and on board revenue less the cost of sales (primarily
travel agent commissions) and the flight component of a fly-
cruise.
Occupancy is calculated by dividing the achieved pcds by the
offered pcds. Since the former includes upper berths whereas the
latter includes only lower berths, the occupancy can exceed 100%.
Passenger cruise days (pcds) means the number of passengers who
could be carried on board (defined by lower berth capacity)
multiplied by the available cruise days.
Cruises that begin in one accounting period and end in another
have their pcds apportioned accordingly; the financial results
are treated similarly. Figures include all ocean going vessels
and riverboats operated by the Group.
Underlying unit cost movements are defined as movements in the
total of unit vessel operating costs and unit selling and
administrative expenses after adjusting for changes in exchange
rates, fuel prices and certain one-off costs (separately
identified in the relevant announcement).
Vessel operating costs and selling and administrative expenses
broadly represent the difference between total net revenues and
EBITDA (earnings before interest, tax, depreciation and
amortization).
Commentary on second quarter results
Passenger cruise days in the quarter were 11% higher than in the
same quarter in 2001. In North America, Princess' passenger
cruise days increased by 13% due to the introductions of Golden
Princess in May 2001 and Star Princess in February 2002, offset
mainly by the transfer of Crown Princess to Germany.
For Europe and Australia, passenger cruise days increased by 7%
due to the introduction into the German market of AIDAvita in May
2002 and A'ROSA Blu (formerly Crown Princess) in June 2002, and
the two A'ROSA riverboats.
For the fleet as a whole, occupancy for the quarter was 101%, the
same as in the second quarter of 2001.
Net revenue yields, including onboard revenue, were 6% lower on a
like for like basis than for the second quarter in 2001. This was
partially offset by favorable exchange movements which resulted
in the absolute change in yields being a decline of only 5%.
The reduction in yields was attributable to Princess and was
significantly affected by the disruption to bookings from the
events of 11 September.
The yield performance was better than our forecast given three
months ago, with ticket yields for all markets being ahead of
expectations, and a strong on board revenue performance during
the quarter.
Gross revenues for the quarter decreased by 1%, reflecting the
lower net revenue yields and a lower air/sea mix for Princess
offset by the increase in passenger carryings and favorable
exchange rates.
Underlying unit costs were 8% lower than in the second quarter of
2001, with the full benefit being received from cost reduction
initiatives taken during 2001 and fleet changes also reducing
costs.
In addition to the underlying cost reductions, direct operating
costs also fell due to the lower air/sea mix, lower commission
costs due to the lower yields, offset by exchange movements
and higher fuel prices.
It should be noted that the reported figures for the second
quarter of 2001 included USD7 million of office relocation costs,
the effect of which has been excluded from the calculation of the
movement in underlying unit costs.
Total operating profit for the quarter was USD117.6 million
against USD111.2 million in the second quarter of 2001, with the
reduction in net revenue yields being more than offset by the
combination of higher passenger carryings and lower unit costs.
Interest costs increased to USD18.9 million due to the higher
borrowings after the deliveries of Golden Princess, Star Princess
and AIDAvita, partially offset by the benefits of lower interest
rates.
Profit before tax for the quarter was USD98.9 million, an
increase of 5% over the second quarter of 2001. The tax rate was
5%. After tax, profits were USD94.0 million against USD89.1
million and earnings per share/ADS were 13.6c/USD0.54 compared
with 12.9c/USD0.52 for the second quarter of 2001.
The dividend for the quarter will be 3.0c per share, payable on
September 17, 2002 to shareholders on the register on August 16,
2002.
Unless they have elected otherwise, ordinary shareholders will
receive their dividend in sterling, converted at the exchange
rate on September 2, 2002.
Elections to receive dividends in US dollars must be made by 27
August 2002. Holders of ADSs will receive their dividend of
USD0.12 per ADS in US dollars.
On the balance sheet, ships increased during the quarter with the
delivery of AIDAvita. Similarly net borrowings increased to
USD1,888.2 million due mainly to the delivery payment for
AIDAvita plus stage payments on other ships under construction
being made, offset by operating cash inflows.
The Group's liquidity, in the form of cash and committed undrawn
facilities, is currently around USD700 million. In addition, the
Group has export credit facilities totally USD1.5 billion
available to finance the new build program.
Commentary on results for the year to date
In the first half of 2002, passenger cruise days increased by 12%
over those in the first half of 2001. Within this, Princess'
passenger cruise days increased by 18%, due mainly to the
introduction of Golden Princess in May 2001 and Star Princess in
February 2002.
Europe and Australia passenger cruise days grew by
2% mainly due to the introduction of AIDAvita in Germany in May
2002 offset by the ending of the charter of Arkona in February
2002.
Net revenue yields, including on board revenue, were 7% lower on
a like for like basis than for the first half of 2001. Underlying
unit costs were 9% lower with savings being made in both direct
operating costs and in selling and administration costs.
Operating profit for the first half was USD159.8 million against
USD143.9 million in 2001. Princess' operating profit increased by
7% to USD119.0 million with the increase in passenger carryings
and unit cost savings more than offsetting the decline in net
revenue yields.
Europe and Australia's operating profits increased by 25% to
USD40.8 million with improved yields, lower unit costs and
overall favorable exchange rates.
The interest charge increased to USD35.0 million due to the
increase in borrowings following the delivery of new ships,
offset by lower interest rates.
Profit before tax increased by 12% to USD126.0 million.
The tax rate for the first half of the year was 5%, in line with
the rate originally reported for the first half of 2001. As
reported with last quarter's results, the adoption of Financial
Reporting Standard No. 19 'Deferred Tax' (FRS19) has resulted in
a restatement of the 2001 comparatives which now include an
additional one off credit of USD96.8 million in the first half
due to the entry into tonnage tax (see note 2).
After tax and minority interests, profits were USD119.7 million
against USD107.0 million as originally reported for the first
half of 2001, restated to USD203.8 million following the adoption
of FRS19.
Basic earnings per share/ADS were 17.3c/USD0.69 compared with
15.4c/USD0.62 as originally reported for the first half
of 2001, restated to 29.4c/USD1.18.
Outlook
Since the trading update issued with our first quarter results on
April 25, bookings for Princess have continued at a good pace and
to date have not been significantly affected by the recent
political and economic uncertainties.
With less capacity left to be sold, booking volumes for current
year sailings have been below those in the same period last year,
but this has enabled us to achieve prices above last year's
levels.
Sailings for the third quarter are essentially fully booked; with
the previous disruption to bookings caused by the events of 11
September resulting in cumulative yields being below those
achieved for the third quarter of 2001.
For the fourth quarter, the proportion of capacity booked is
ahead of this time last year, with cumulative yields unchanged
year over year. Of course, from the position a year ago, the
fourth quarter of 2001 was subsequently impacted by the events of
September 11.
It remains early in the booking cycle for sailings in the first
quarter of 2003 but at this stage Princess is in a good position,
with the proportion of capacity booked ahead of this time last
year, at cumulative yields marginally below the position a year
ago.
We are encouraged by this position as again bookings for the
first quarter of 2002 were subsequently impacted by the events
of September 11.
In the UK the booking position continues to be positive. Third
quarter sailings are essentially fully booked, at good yields.
With the capacity increase from the replacement of Victoria by
Oceana (currently Ocean Princess) in November, we have further to
go for the fourth quarter than at this time last year, and
this will put some pressure on yields for that quarter. The same
applies for first quarter 2003 sailings.
In Australia, bookings for Pacific Sky continue to
be strong.
In Germany, the two AIDA ships have booked very well for the
summer period, with the winter program about to be launched.
A'ROSA Blu is well booked for the initial summer season when the
ship is in northern Europe, although some extra promotional
activity has been necessary as we establish the new brand.
Bookings for the sailings from September onwards commenced later
than would normally be the case following the ship's redeployment
away from the east coast of the United States as a result of the
events of September 11.
This will put pressure on yields in the fourth quarter, as will
the significant increases in capacity for both brands. The two
new riverboats, also operating under the A'ROSA brand, have
booked well for their initial summer season.
For the Group as a whole, we anticipate that net revenue yields
for the third quarter will be around 6% lower, on a like for like
basis, compared with the third quarter of 2001.
With the 2001 comparative reflecting the effects of the events of
September 11, we expect yields in the fourth quarter of 2002 to
show a year over year increase, with improved yields from
Princess offsetting likely yield pressure in the UK and Germany
due to the growth in these businesses at a
seasonally weak time of the year.
For the year as a whole, our current expectation is that net
revenue yields for the Group, on a like for like basis,
will show a reduction of around 5% against 2001.
Cost reductions have continued to come through strongly. Unit
cost reductions for the remainder of 2002 will not be as high as
those achieved in the first two quarters as we will be comparing
with quarters in 2001 that also showed significant reductions.
For the year as a whole, we remain on track to achieve our target
of a 7% reduction in underlying unit costs. The lower air/sea mix
for Princess and changes in fuel prices and exchange rates will
also affect the reported cost figures.
Analysts' forecasts for current year earnings have risen since
our first quarter results three months ago and are now centered
on the 40-41c per share (USD1.60-USD1.64 per ADS) range.
Based on our current booking position and recent booking trends,
and assuming no unforeseen developments, we expect to meet or
exceed this level. This does not allow for the financial
consequences from completion of either our merger with Royal
Caribbean or the proposed takeover by Carnival.
It also does not allow for costs that would still be incurred if
neither transaction completed. We now estimate that such costs
would be around USD35 million, of which approximately USD26
million had been incurred and were being carried as a prepayment
at 30 June 2002.
Business Developments
The second quarter saw a significant expansion of our German
business. The second AIDA vessel, AIDAvita, came into service in
May, doubling the capacity of that clubship brand. That month
also saw the introduction of the two new riverboats, A'ROSA Bella
and A'ROSA Donna, on the Danube.
During June, the A'ROSA brand's first ocean cruise ship, A'ROSA
Blu (formerly Crown Princess), came into service following her
re-fit at Lloyd-Werft.
In the UK, we have moved forward rapidly with the preparations
for our new product, Ocean Village, aimed at a younger passenger
looking for a relaxed and informal vacation in the sun. The
summer 2003 deployment, based in Majorca, has been announced,
charter flights and hotels arranged, and the brochure launched.
Plans for the conversion of Arcadia, currently part of the P&O
Cruises fleet, to become Ocean Village's first ship are being
finalized.
In the meantime, we are continuing to prepare for the significant
expansion of our two existing UK brands. Oceana (currently Ocean
Princess) and Adonia (currently Sea Princess) join the P&O
Cruises fleet, and Minerva II (the former Renaissance vessel, R8)
replaces Minerva I for the Swan Hellenic brand, all within the
next 12 months.
In Australia, Pacific Sky, which doubled our capacity in that
market, is now well established. In the short term we have been
focusing on growing sales in Australia onto our international
products sold there, principally world cruises on P&O Cruises UK
ships and Princess' south Pacific and Alaska itineraries.
These sales allow us to capture part of the premium segment in
Australia, in addition to the contemporary segment served by
Pacific Sky.
Princess continues to expand and enhance its product offering.
The positioning of the post-panamax Star Princess on the west
coast has proved to be very successful, again demonstrating the
ability to deliver the Princess product on large, cost effective
ships in destination trades. In accordance with this strategy,
for summer 2003, we will have two post-panamax ships, Star
Princess and Diamond Princess, in Alaska.
They will be based in Seattle, rather than Vancouver, and with
weekend departures, introducing another product alternative
for our customers.
The other two post-panamax ships currently in the fleet, Grand
Princess and Golden Princess, will both be positioned in the
Mediterranean for summer 2003, with Princess returning to the
summer Caribbean in 2004 after the delivery that year of two more
post-panamax ships, Sapphire Princess and the new Crown Princess.
During the quarter, Princess opened its fifth wilderness lodge in
Alaska at Copper River. The new lodge is proving popular with
passengers and has enabled us to continue to expand and grow our
cruise tour offerings in Alaska.
Princess continues to explore opportunities to expand its product
offering in Alaska and elsewhere.
Over the next year, the Princess fleet will go through
significant changes. Following on from the transfer of Crown
Princess to Seetours in Germany in this last quarter, Ocean
Princess and Sea Princess transfer to the UK fleet and Pacific
Princess leave the fleet.
Three newbuilds will join the fleet, Diamond Princess and the two
latest design panamax ships from Chantiers de l'Atlantique, Coral
Princess and Island Princess, both of which will have some 75% of
their cabins with balconies.
Within the space of little more than 12 months, by the time that
Diamond Princess and Island Princess are delivered in May 2003,
these changes will have increased the proportion of balconies in
the Princess fleet from 41% to 52%, significantly enhancing the
revenue earning potential of the Princess brand.
For 2003, this positive influence, combined with a booking season
not affected by the events of September 11, should place Princess
in a good position to counter any pressure that results from the
significant increase in industry supply growth in North America
next year and any negative influence that may develop as a result
of recent political and economic uncertainties.
In accordance with our strategic objectives set out at the time
of our demerger, we have brought down the cost structure of the
business significantly, aided by fleet changes and the growth in
the business.
Having reduced underlying unit costs by 5% in 2001, we remain on
target for unit cost reductions of another 7% in 2002. This has
been achieved despite absorbing additional overhead and promotion
costs in Germany as we have prepared for our significant
expansion in that market.
Although they will not continue at the same pace, we expect to
continue to achieve unit cost savings in 2003 and beyond as
additional new ships are delivered and we continue to grow the
business.
This will be helped by unit overhead and promotion costs in
Germany returning to more normal, ongoing levels once the
expansion rate slows, although this benefit will be offset to
some extent by higher costs in the UK as we develop the new Ocean
Village brand.
We are favorably disposed to adding more vessels to the Princess
fleet. We expect the cruise segment of the North American
vacation market to continue to grow and we believe that the
Princess brand continues to attract a share of demand
significantly in excess of its share of total industry capacity.
However, for a number of commercial reasons, we do not expect to
exercise the options we have for two more panamax ships from
Chantiers de l'Atlantique before July 31, 2002, the date on which
these options currently expire.
Royal Caribbean Combination and Carnival Proposed Takeover
On November 20, 2001, we announced that we had agreed to combine
with Royal Caribbean Cruises under a dual listed company
structure.
On December 16, 2001, Carnival made a pre-conditional offer to
acquire P&O Princess. This offer was most recently revised on
February 7, 2002.
Competition authorities are reviewing both the combination with
Royal Caribbean and the proposed takeover by Carnival
Corporation.
On June 19, 2002 the UK government approved the merger with Royal
Caribbean, in accordance with the recommendation of the UK
Competition Commission's report on the industry and the
transaction.
This follows on from the clearance from the German government,
received in January 2002, and completes the regulatory
clearances required for the Royal Caribbean transaction from
European regulators.
The European Commission is nearing completion of its review of
the Carnival takeover proposal. A decision will be announced by
19 August 2002, and is expected to come earlier than this.
The United States' Federal Trade Commission is examining both
transactions. Its detailed reviews of both transactions are
ongoing. Our current expectation is that these reviews will both
be completed by the end of the third quarter.
The group's latest consolidated latest balance sheet may be
viewed at: http://bankrupt.com/misc/PO.pdf.
P&O PRINCESS: Merger with Carnival Secures EU Clearance
-------------------------------------------------------
The European Commission in Brussels announced on July 24 the
clearance of the proposed combination of P&O Princess and
Carnival.
The EC's decision concludes that the proposed concentration would
not lead to the creation of dominant positions which might impede
effective competition in any European markets.
The decision reflects the ease with which new operators can enter
into or expand cruise operations and the rapid growth of the UK
and German markets forecast for the coming years.
"We are obviously very pleased with the conclusions reached by
the European Commission," said Micky Arison, Chairman and Chief
Executive of Carnival. "The Commission undertook an in-depth
review of the proposed transaction, hearing arguments from all
parties. While the process was nerve-racking at times, the
Commission's thorough analysis of the large amount of material
and submissions resulted in the right outcome. This decision is
consistent with the national competition authorities' views
reached in Germany and the UK on the proposed P&O Princess/Royal
Caribbean combination.
We hope that in light of our clearance in Europe, P&O Princess
will now meet with us as soon as possible. We clearly have the
superior financial proposal and today's news confirms what we
have indicated all along: that both transactions are similarly
situated and equally deliverable from a regulatory perspective."
Both combinations also remain under review by the Federal Trade
Commission in the US. A decision is expected for both
transactions on a similar timetable, which Carnival believes will
not be before mid-September.
Terms used in this announcement have the same meaning as in the
announcement dated February 7, 2002.
Merrill Lynch International and UBS Warburg Ltd., a subsidiary of
UBS AG, are acting as joint financial advisors and joint
corporate brokers exclusively to Carnival and no-one else in
connection with the Increased Offer and will not be responsible
to anyone other than Carnival for providing the protections
afforded to clients respectively of Merrill Lynch International
and UBS Warburg Ltd. as the case may be or for providing advice
in relation to the Increased Offer.
STELAX INDUSTRIES: Reaches Pact to Restructure UK Subsidiary
------------------------------------------------------------
Stelax Industries Ltd., announced Wednesday that it had signed a
Letter of Intent and Understanding with Nick Miller of Kingston
Smith & Partners, the Administrative Receiver as agent of Stelax
U.K. Ltd., and the major debt holder of Stelax U.K. and its
associated group companies.
The Letter of Intent sets out the principal terms for the
purchase of all the assets of Stelax U.K., and forgiveness of all
debts related to the Stelax group companies, subject to
consummation of formal contracts.
Harmon Hardy, Chairman of Stelax Industries Ltd., stated: "The
cooperative support of the Receiver and the group's major debt
holder in structuring the above Letter of Intent sets out the
basis for Stelax Industries to acquire from the Receivers the
assets of Stelax U.K. and establish a balance sheet with no major
current liabilities. The completion of the arrangements contained
in this Letter of Intent should then permit Stelax to move
aggressively ahead in its established market."
The companies' year end financials have been delayed in order for
the companies' U.K. auditors to determine the proper U.S. GAP
accounting to reflect the administrative proceedings of the U.K.
subsidiary. The release of the final report should be within the
next week.
WORLDCOM, INC.: BT Group Eyes International Operations
------------------------------------------------------
Parts of WorldCom's international operations are being eyed by BT
Group if they would be put up for sale, a report from Financial
Times said.
Citing, BT Ignite chief executive Andy Green, the daily said the
Mr. Green confirmed that he would be interested in bidding for
parts of WorldCom but not the entire European network. BT Ignite
is the services division of BT Group.
In addition, Mr. Green rejected rumors that BT is ready to offer
tens of millions of pounds to any deal, saying that an
acquisition would only concern "an absolutely trivial sum of
money," the paper said.
As of the moment, WorldCom has not indicated that it would be
selling its international operations and has held talks with BT
regarding the matter. Also, despite its interest in bidding for
the operations, BT still expressed its hope that WorldCom would
emerge from Chapter 11 intact, the daily said.
However, BT also disclosed that it had been in talks with
WorldCom customers. As a result, BT has already won some business
from WorldCom, the paper said.
Previously, WorldCom has expressed its confidence in staying
intact. It would not be forced to dispose its European
operations.
But despite this, WorldCom's international operations have
already gained potential investors, such as, Kohlberg Kravis
Roberts, Apax and Carlyle Group, among others, the paper said.
The beleaguered company is said to have already earmarked several
of its business for sale, its stakes in telecoms companies in
Brazil and Mexico hoping to cut its USD32bn (GBP20bn) debt
burden, the daily reported.
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
Larri-Nil Veloso, Maria Lourdes Reyes and Jean Claire Dy,
Editors.
Copyright 2002. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Europe subscription rate is USUSD575 per half-year,
delivered via e-mail. Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are USUSD25 each. For subscription
information, contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *