Siemens warns of lean times

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The Independent Online
SIEMENS, Europe's biggest electronics company, issued a clear warning yesterday by saying it would have to make 'major efforts' to maintain the DM3.2bn ( pounds 1.3bn) net profits it made last year.

Announcing a 2 per cent increase in net income for the first quarter, which ended in December, Heinrich von Pierer, president, told the annual press conference in Munich the company must 'prepare for lean times following five consecutive years of growth in net income'.

Siemens expects sales to grow to around DM84bn this year, but the outlook for profits appears at best flat.

Stressing that the group 'would be well advised not to underestimate the streamlining efforts' of its competitors, Mr von Pierer confirmed that the process of job cuts would be accelerated in 1993, bringing the current employment total of 410,000 down to under 400,000.

While infrastructure activities, especially telecommunications and power generation, continued to perform strongly, information technology, comprising conductors and Siemens-Nixdorf computers, remained a serious loss- maker and is expected to lose more than DM1bn this year. The division's restructuring should be completed by the end of 1993, but Karl-Hermann Baumann, finance director, said: 'We will not see financial improvements because of the difficult market conditions.'

Mr von Pierer said Siemens would have to contend with 'sustained weak business' in its core electrical interests. 'We cannot expect a decisive economic upswing in 1993.'

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