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Swedish report Swedish report
by Euro Reporter
2008-10-04 09:28:28
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A structural SAS deal

Scandinavian Airlines (SAS) has confirmed that it is discussing so-called “structural deals” concerning its future, even while there were reports that the German national carrier Lufthansa is examining a possible takeover, news which sent SAS stocks skyrocketing. SAS is partly-owned by the Swedish, and Norwegian and Danish governments who hold 21.4 percent, and 14.3 percent each, respectively, while the rest is held by private shareholders. The SAS Group, operator of joint carrier Scandinavian Airlines, on September 12 confirmed it was “evaluating various structural possibilities” after a brief halt in trading of its shares, Deutsche-Presse- Agentur (dpa) reported. “SAS is conducting talks about a possible structural solution,” the group said, adding that “no decision has been taken.”

The statement did not mention who SAS was conducting talks with. Before trading was halted, SAS shares climbed 10 percent on speculation that Lufthansa of Germany was considering a bid for the SAS Group. Lufthansa has in the past often been linked to SAS. In common with several airline groups, SAS has posted losses over record-high fuel prices and a drop in passenger traffic. The group recently posted second-quarter pre-tax loss of USD 16.8 million and has introduced a series of belt-tightening measures including reducing its aircraft capacity by 33 planes for the whole group and slashing some 2,500 jobs. At the end of the quarter, the SAS Group had 25,683 employees.

So fasten your seatbelts!


Income tax cuts

Sweden’s centre-right government plans to cut income tax by 15 billion Swedish crowns (1.61 billion Euro_ in its autumn budget to boost jobs and to counteract the global slowdown, Prime Minister Fredrik Reinfeldt said. The government has already introduced two rounds of income tax cuts since it came to power two years ago, but Reinfeldt said that more needed to be done to encourage those on welfare to move into work. Measures have been given more urgency by a slowing economy, which in the second quarter failed to grow at all compared with the first three months of the year.

“The most effective way to get Sweden back to work is to continue to cut income taxes, and that is what we will do also in the autumn budget, to the extent of 15 billion crowns,” Reinfeldt said. He said this would mean around 250 crowns per month more in the wallet of the average wage earner. Unemployment was 8.1 percent in June, swelled by school leavers. With high jobless benefits and other forms of social support and income taxes among the highest in the world, critics said Swedes lack the incentive to work.

Let’s hope others in Europe will follow, households need some help and that help doesn’t include more tax!


And of course some news from …IKEA

There’s still long lines in their parking lots and going out the door with carts piled high with goods, and that’s meant record sales this financial year, but furniture retail giant IKEA said it expects lower demand in several key markets. IKEA posted global sales of some 21 billion Euros for the financial year that ended August 31 and said it was the best in the group’s history, Sweden’s financial daily Dagens Industri reported. Chief Executive Anders Dahlvig attributed the strong sales to the 22 new department stores that were opened in the US, Europe, China and Russia. Since 1999 the furniture giant’s global sales have almost tripled. During the recent financial year, growth amounted to seven percent, compared to a 14 percent rise the previous financial year.

“The drop was partly an exchange-rate effect,” Dahlvig said, elaborating that with constant exchange rates, growth would have been at 10 percent. Regardless, the global economy also had an impact on the company, he added. “We have underestimated the downturn which is very much linked to the crisis in the housing sector,” he said, noting the ripple effect on sales of furniture and soft furnishings. Scandinavia, Asia and Eastern Europe also failed to offset the downturn in main markets such as Germany, the US and Britain, he said. IKEA, founded by Ingvar Kamprad in 1943, is not a listed company and does not disclose its profitability, but Dahlvig said the group had “strong finances.”

Checking my sitting room I’m afraid I have done a lot for this …good year's results!!!

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