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Investor plunges into the red in second quarter

Investor, Northern Europe's biggest industrial holding company, fell into the red in the second quarter with a net loss of 3.52 billion kronor ($585 million) due to the global economic turndown.

Published: 10 July 2008 15:00 CEST

In the same period a year earlier, Investor reported a net profit of 19.3 billion kronor.

“The second quarter was another turbulent period in the financial markets. After a solid start, the markets experienced sharp declines towards the end of the quarter,” Investor's chief executive Börje Ekholm said in a statement.

“The credit squeeze and a general economic slowdown in the developed countries, combined with concerns about rising inflation, troubled the markets considerably,” he said.

Investor's net asset value totalled 138.8 billion kronor at the end of June compared to 182.5 billion at the end of June a year earlier.

Per share, net asset value fell from 203 kronor at the end of December 2007 to 182 kronor on June 30th.

Among Investor's main holdings are Swiss-Swedish engineering group ABB, Anglo-Swedish pharmaceutical group AstraZeneca, Swedish bank SEB, industrial equipment manufacturer Atlas Copco, and the world leader in telecoms networks, Ericsson.

Investor, which is controlled by the influential Wallenberg family, has also been one of the main shareholders in Swedish truckmaker Scania.

Among its holdings, only Scania and aviation and defence group Saab had a positive impact on earnings, Investor said.

Scania had a positive impact on earnings of 3.2 billion kronor, while SEB had a negative impact of 6.51 billion.

Investor said it believed however it was in a good position to face the market turbulence thanks to its strong financial health.

“Our balance sheet will be even stronger when we receive the proceeds from the divestiture of our shares in Scania to Volkswagen,” Ekholm said, adding that the transaction was to be completed during the third quarter.

Berlusconi cools AC Milan takeover talk

AC Milan owner and president Silvio Berlusconi has admitted he has no "desire" or "need" to sell AC Milan. Photo: Giuseppe Cacace/AFP

Berlusconi admitted in an interview with La Gazzetta dello Sport on Saturday he has been in talks with Chinese Head of State Xi Jinping about possible investment from the country in the seven-time European champions.

But two weeks after it was announced a majority stake in the club would soon be sold to Thai businessman Bee Taechaubol, Berlusconi continues to keep fans guessing as to his intentions for the once mighty Rossoneri.

The former two-time Italian prime minister conceded the arrival in the sport of wealthy investors from oil-producing nations such as Qatar had compounded his fight to keep Milan, one of the world's top clubs, on a level playing field with their European rivals.

But despite Milan's recent fall from grace that is likely to see them once again miss out on European football next season, his plans to sell the club he steered to unprecedented success in Europe during their 1990s heyday appear to have cooled.

“Right now I don't know how the situation could develop,” Berlusconi told the Italian sports daily when asked about recent negotiations with investors from China.

“Beyond the rapport we created in political terms, Xi (Jinping) has shown the utmost respect for Italian football.

“But let's be clear: I have no desire, intention or need to sell Milan.

“Although it is true that since the arrival of petrodollars and investors from Qatar, it has become very difficult for family-run clubs to support such an economic burden.”

A fortnight ago Berlusconi was said to be on the verge of selling a 51 percent stake in the club to Bee, the executive director of a south-east Asian private equity group, for an estimated €500 million ($550 million).

That deal appears to have been put to one side, at least temporarily, but Berlusconi hinted his search for potential partners who could bring significant investment without him being forced to give up a majority stake is still ongoing.

He added: “If my family can't resolve the club's problems on its own, then I will have to to find investors capable of contributing to the relaunch of Milan.

“If we can't find buyers, it's up to me to try and relaunch the club. If we do bring in new investors who want me to remain in my role, then I will collaborate with those who do come in to help take Milan back to the position we deserve to be in.”

Milan's city rivals Inter are already in the hands of Asian owners, Indonesian tycoon Erick Thohir having bought a 70 percent stake in the Serie A giants in November 2013.

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