Novartis profits down 10%
Drug maker Novartis AG yesterday reported a 10 percent drop in second-quarter net profit owing to currency fluctuations and higher financing costs, but said underlying growth was helped markedly by advances in its pharmaceuticals division. Its after-tax profit in the second quarter dropped to US$2 billion from US$2.3 billion during the same period last year. Profit for the first six months was US$4 billion, down 12 percent from the year-earlier figure because of the currency fluctuations and the costs of financing the takeover of Alcon, the eye care company, Novartis said.
BT to recall jobs
British telecoms operator BT is to recall to the UK at least 2,000 call-center jobs based in India, the Times reported yesterday. The newspaper said BT chief executive Ian Livingston had revealed the plan on Wednesday in response to a question asked by a shareholder at the group’s annual general meeting. In recent years, big British companies have outsourced thousands of call-center jobs to India to cut costs but have faced criticism from Britain-based customers unhappy at the level of service received. BT’s move to repatriate some of its jobs was not “about customer service,” said a group spokesman, quoted by the Times. “It is about the effective deployment of our resources,” he said.
Rio Tinto pulls analysts
Mining giant Rio Tinto Ltd has pulled researchers who follow China’s steel industry out of the country after four employees were detained on spying allegations during iron ore price talks, news reports said yesterday. The employees left on Wednesday, the Australian Financial Review and China’s 21st Century Business Herald said. The Herald said they went to Singapore or Australia. Neither said how many people were involved or gave other details. A Rio spokeswoman in Melbourne, Amanda Buckley, declined to comment. The Herald, citing an unidentified member of China’s negotiating team, said the Chinese had switched to talking with Brazil’s Vale about prices because “there is no one at Rio that we can talk to.”
Lufthansa plans cost cuts
Lufthansa, the leading German airline, announced plans to cut costs to save 1 billion euros (US$1.4 billion) per year from 2011, a spokeswoman said yesterday. “We confirm” a report earlier in the day by the business daily Handelsblatt, which said the plan, dubbed “Climb 2011,” would focus on passenger transport activities, spokeswoman Claudia Lange said. “Our passenger costs must fall,” and details will be released in the coming weeks, she said. A letter sent by Lufthansa chief executive Christoph Franz to the airline’s staff warned that “air traffic is mired in the worst crisis in its history.”
MUFG to raise US$3.9bn
Japan’s biggest lender, Mitsubishi UFJ Financial Group (MUFG), said yesterday that it would tap investors for ¥370 billion (US$3.9 billion) in capital to strengthen its financial base. The group plans to issue preferred stock on July 29 that cannot be converted into common shares, a statement said. Including the latest sale, MUFG will have raised about ¥1.46 trillion in new capital since the global financial crisis erupted last year. Late last year the group issued ¥990 billion in shares. In March this year it sold ¥97.4 billion in preferred securities.