17 October 2003 10:48
Business news in brief
BP upgrades Russian reserves sevenfold LORD Browne, chief executive of BP, has made a dramatic sevenfold upgrade to
the size of the company's Russian oil reserves. In an eagerly-awaited presentation to City analysts, he revealed
that BP's Russian venture could contain as much as 30 billion barrels of oil compared with just 4.1 billion
currently recorded under US accounting standards. The upgrade stems from a detailed analysis of the oil assets owned by
BP's 50 per cent Russian venture, TNK-BP. Capital spending is likely to be stepped up to US dollars 1 billion (GBP
600 million) a year from dollars 850m in the short term. BP bought the Russian stake in August for dollars 8.8bn.
Universal Music job cuts to total 1,350 UNIVERSAL Music, the world's largest record company, will cut a total of
1,350 jobs in a restructuring drive the company said is aimed at saving GBP 119 million a year in response to the
protracted slump in music sales. The heavy redundancies at Universal, which controls nearly 30 per cent of the US music
market, is the latest sign of a crisis in the record industry, which blames a three-year slump in sales on internet
song-swapping and home CD-burning. Universal began trimming its payroll earlier this year, eliminating about 550 posts
around the world. But it plans to cut another 800 jobs, including 190 in North America, between this week and early
2004. N Brown shake-up beginning to pay off HOME shopping group N Brown said measures to improve its performance were
starting to bear fruit with half-year sales up 2 per cent at GBP 231 million. N Brown said its figures represented an
"out-performance against our peer group", although margin changes meant profits fell by 7.7 per cent to GBP
25.1m. The firm lost a quarter of its value in January after it warned that profits had been affected by a disappointing
trend in catalogue sales. Since then, the company said improvements to sourcing and the creation of more fashionable
ranges have revived its fortunes. Growth is expected from the autumn and winter ranges, which have restored a wider
range of choice. AMP holds door open on UK trade sale AMP, the Australian financial services group, said it would still
consider a trade sale of its troubled UK operations - even as it won court approval for their controversial demerger.
Chairman Peter Willcox said: "Our door is open. We are continuing to talk to people." In demerger documents
Willcox confirmed that conditional proposals had been submitted for AMP's UK arm, which comprises the northern
hemisphere operations of Henderson Global Investors, its fund management arm, and four closed life funds - NPI, Pearl,
London Life and National Provident. But he said offers would have to be improved if they were to be preferred over the
demerger, which is set to incur A dollars 214 million (GBP 88 million) in costs. Nokia's cuts sales forecast for Q4
NOKIA, the world's biggest mobile phone maker, said it sold almost 25 per cent more mobile phones in the third
quarter of this year than last, as it revealed a 35 per cent rise in earnings for the three months to September. It
raised its forecast for total handset sales to a record 460 million this year, but shares fell as it cut its
fourth-quarter estimates. Chairman and chief executive Jorma Ollila said volumes had grown by as much as 15 per cent for
the industry as a whole in the third quarter, with Nokia racing ahead at 23 per cent - resulting in a steady rise in
market share. But turnover, including sales of network equipment, was down 5 per cent at GBP 4.1 billion during the
three months. Nokia shares closed off 4 per cent. 442 to design GBP 500,000 Tullibardine complex EDINBURGH-based
consultancy 442 has won the contract to design the GBP 500,000 Tullibardine Distillery retail outlet, restaurant and
visitor attraction in Perthshire. The Leith design agency, which started life in November last year, will help to
develop and launch an innovative new retail brand based around the traditional values of whisky. David Dunn, 442's
design director, said: "Our strong commercial focus and modern retail experience is what appealed to the client
team." The project at Tullibardine Distillery forms part of a 50,000 sqft multi-million pound retail development at
Blackford, near Gleneagles in Perthshire. BA strike averted as swipe card row settled BRITISH Airways engineers have
narrowly voted to accept a pay offer and the introduction of swipe cards, ending the threat of industrial action.
Members of Amicus backed the deal by 1,514 to 1,192 votes - a result, which showed the "deep frustration" felt
by workers, according to the union. Bob Shannon, national officer of Amicus, said: "The company should have learnt
an important lesson through all this - they have to carry their employees with them through agreement, not
imposition." The agreement covered introduction of swipe cards, which led to a strike by check in staff at Heathrow
in the summer, and consolidation of holiday pay. Pilkington shares down on profit warning SHARES in Pilkington Tiles
nudged down from 3.5p to 3.375p after chairman Tony Palmer warned that full-year profits would be less than expected.
The tile-maker posted a pre-tax loss of GBP 599,000 for the six months to September, against a loss of GBP 765,000 last
time. Sales rose to GBP 15.35 million from GBP 12.82m, helped by a restructuring of its ceramics business. The group
said its proposals to address the pension fund deficit have now been accepted and the scheme was closed on 31 August,
2003. At 1 September, the scheme had a deficit of GBP 3.9m compared to GBP 4.2m at 30 November 2002.
[UKIR [UK & Ireland Intelligence Wire]] |
RUSSIA IN FACTS
