Young Norwegians slow to pay their bills
A collection agency in Oslo told newspaper Aftenposten this week that claims against Norwegians aged 18 to 25 have risen by more than 50 percent in the past two years. Cases rose from 115,621 to 174,142 at collection firm Lindorff, and managing director Heidi Skaaret had two explanations: “For some companies, young customers make up an attractive group for the long term, and it’s easy for them to get credit. In addition, we see that young people are accustomed to high levels of consumption, and aren’t as good at saving as earlier generations were.” Collection claims among the general public were up nearly 43 percent from 2007 to 2009. Another firm, Kredinor, reported a 64.4 percent jump in cases involving young persons, compared to 17.2 percent for the general population.
(Written February 12, 2010)
A collection agency in Oslo told newspaper Aftenposten this week that claims against Norwegians aged 18 to 25 have risen by more than 50 percent in the past two years. Cases rose from 115,621 to 174,142 at collection firm Lindorff, and managing director Heidi Skaaret had two explanations: “For some companies, young customers make up an attractive group for the long term, and it’s easy for them to get credit. In addition, we see that young people are accustomed to high levels of consumption, and aren’t as good at saving as earlier generations were.” Collection claims among the general public were up nearly 43 percent from 2007 to 2009. Another firm, Kredinor, reported a 64.4 percent jump in cases involving young persons, compared to 17.2 percent for the general population.
(Written February 12, 2010)
Bank rewards all employees with bonus
Even during a year with a global finance crisis, Norway’s largest bank performed so well that all employees are getting at least NOK 10,000 (about USD 1,700) in a bonus, reports Norwegian Broadcasting (NRK). DnB NOR, which is partially state-owned, earned pre-tax operating profits of NOK 18.7 billion in 2009 before write-downs, which turned out to be less than expected. The operating net was up from NOK 15.6 billion in 2008 and chief executive Rune Bjerke wanted to share the wealth. The state will also get its share of a proposed dividend per share of NOK 1.75, up from zero last year. Fourth-quarter pre-tax profits amounted to NOK 2.6 billion, exceeding analysts’ expectations of NOK 1.9 billion, reports TDN Finans. The bank’s results were fueled largely by profits rolling in from its securities division, DnB NOR Markets. DnB NOR Markets boss Ottar Ertzeid, who has presided over an operation where earnings have doubled since he took charge eight years ago, attributed the strong results to “special markets and swings that have been extraordinary.” Full-year bottom-line results for DnB NOR were down, to NOK 7 billion from NOK 8.9 billion in 2008, though, partly because of write-downs on its Baltic operations. And Bjerke warned that “the danger isn’t over,” indicating that shipping loans can lead to losses in the months ahead.
(Written February 11, 2010)
Even during a year with a global finance crisis, Norway’s largest bank performed so well that all employees are getting at least NOK 10,000 (about USD 1,700) in a bonus, reports Norwegian Broadcasting (NRK). DnB NOR, which is partially state-owned, earned pre-tax operating profits of NOK 18.7 billion in 2009 before write-downs, which turned out to be less than expected. The operating net was up from NOK 15.6 billion in 2008 and chief executive Rune Bjerke wanted to share the wealth. The state will also get its share of a proposed dividend per share of NOK 1.75, up from zero last year. Fourth-quarter pre-tax profits amounted to NOK 2.6 billion, exceeding analysts’ expectations of NOK 1.9 billion, reports TDN Finans. The bank’s results were fueled largely by profits rolling in from its securities division, DnB NOR Markets. DnB NOR Markets boss Ottar Ertzeid, who has presided over an operation where earnings have doubled since he took charge eight years ago, attributed the strong results to “special markets and swings that have been extraordinary.” Full-year bottom-line results for DnB NOR were down, to NOK 7 billion from NOK 8.9 billion in 2008, though, partly because of write-downs on its Baltic operations. And Bjerke warned that “the danger isn’t over,” indicating that shipping loans can lead to losses in the months ahead.
(Written February 11, 2010)
Results roll in: Statoil disappoints, Norwegian soars, REC dives…
Quarterly and full-year profit reports are rolling in for Norwegian companies this week and they were showing mixed results. On Thursday, Norway’s biggest company Statoil reported fourth-quarter operating results of NOK 33.5 billion, down from NOK 37.8 billion in the same quarter last year, and analysts were disappointed. Statoil blamed its weaker figures on a major fall in gas prices. Norwegian Air, meanwhile, reported its best annual profits ever, just days after rival SAS reported huge losses (see below). The discount airline logged a big jump in operating revenues, and fourth-quarter profits of NOK 7.6 million, compared to losses last year. Full year net was up to NOK 50 million, nearly twice as high as Reuters’ analysts expectations. Results of once-high-flying solar firm REC, however, sparked headlines of “full collapse” and “complete breakdown” in Norwegian papers on Thursday. It went from NOK 4.4 billion in pre-tax profits in 2008 to NOK 2.5 billion in losses last year. Operating losses in the fourth quarter alone amounted to NOK 1.8 billion. Prices for their wafers used in solar panels took a dive, hitting the bottom line hard. Meanwhile, Norwegian telecoms firm Telenor was “relieved” that 2009 wasn’t as bad as feared. The company logged a slight rise in operating revenues, from NOK 96.2 billion to NOK 97.6 billion, while pre-tax profits fell from NOK 19.4 billion to NOK 15.2 billion. Its fourth-quarter results were better than expected and shareholders (including the Norwegian state) can share a dividend of NOK 4.1 billion, or NOK 2.50 per share. There was no dividend in 2008, but now Telenor is returning to a policy of paying out a dividend equal to between 40 and 50 percent of net profits, reports newspaper Dagens Næringsliv.
(Written February 11, 2010)
Quarterly and full-year profit reports are rolling in for Norwegian companies this week and they were showing mixed results. On Thursday, Norway’s biggest company Statoil reported fourth-quarter operating results of NOK 33.5 billion, down from NOK 37.8 billion in the same quarter last year, and analysts were disappointed. Statoil blamed its weaker figures on a major fall in gas prices. Norwegian Air, meanwhile, reported its best annual profits ever, just days after rival SAS reported huge losses (see below). The discount airline logged a big jump in operating revenues, and fourth-quarter profits of NOK 7.6 million, compared to losses last year. Full year net was up to NOK 50 million, nearly twice as high as Reuters’ analysts expectations. Results of once-high-flying solar firm REC, however, sparked headlines of “full collapse” and “complete breakdown” in Norwegian papers on Thursday. It went from NOK 4.4 billion in pre-tax profits in 2008 to NOK 2.5 billion in losses last year. Operating losses in the fourth quarter alone amounted to NOK 1.8 billion. Prices for their wafers used in solar panels took a dive, hitting the bottom line hard. Meanwhile, Norwegian telecoms firm Telenor was “relieved” that 2009 wasn’t as bad as feared. The company logged a slight rise in operating revenues, from NOK 96.2 billion to NOK 97.6 billion, while pre-tax profits fell from NOK 19.4 billion to NOK 15.2 billion. Its fourth-quarter results were better than expected and shareholders (including the Norwegian state) can share a dividend of NOK 4.1 billion, or NOK 2.50 per share. There was no dividend in 2008, but now Telenor is returning to a policy of paying out a dividend equal to between 40 and 50 percent of net profits, reports newspaper Dagens Næringsliv.
(Written February 11, 2010)
Norwegians flying more often
Just as Scandinavian Airlines (SAS) was reporting more heavy losses came reports that traffic through Norwegian airports actually rose in January, after falling back sharply during the finance crisis year of 2009. New figures from Norway civil aviation authority Avinor showed a 4.2 percent increase in passenger counts for the month, to 2.7 million, compared to January of 2009. The number of passengers flying abroad rose the most, by 5.9 percent, while domestic air traffic was up 3.6 percent. The January figures remain less than in January 2008, when 2.8 million went flying. Norway’s main gateway airport, OSL Gardermoen, recorded a 6.2 increase, with equal growth in overseas and domestic passengers.
(Written February 10, 2010)
Just as Scandinavian Airlines (SAS) was reporting more heavy losses came reports that traffic through Norwegian airports actually rose in January, after falling back sharply during the finance crisis year of 2009. New figures from Norway civil aviation authority Avinor showed a 4.2 percent increase in passenger counts for the month, to 2.7 million, compared to January of 2009. The number of passengers flying abroad rose the most, by 5.9 percent, while domestic air traffic was up 3.6 percent. The January figures remain less than in January 2008, when 2.8 million went flying. Norway’s main gateway airport, OSL Gardermoen, recorded a 6.2 increase, with equal growth in overseas and domestic passengers.
(Written February 10, 2010)
Analysts give SAS three more years
The future for Scandinavian Airlines (SAS) remained the subject of much speculation on Tuesday, after the long-troubled carrier reported a huge fourth-quarter loss and sought new capital from its shareholders. Several analysts claimed SAS likely won’t survive in its present form beyond 2014, because there’s a limit to the cost-cuts it can make in the face of severe competition from lower-cost rivals. Some told newspaper Aftenposten they expect a “controlled reorganization” of SAS, perhaps starting with a bankruptcy declaration that would allow formation of a new company without state ownership, with many of its same routes and employees and a restructured fleet of aircraft. “It’s not possible to cut your way to profitability,” analyst Hans Erik Jacobsen of First Securities said. Another option is for Star Alliance partner Lufthansa to finally step in “and pick up the remains of SAS,” said Espen Andersen of the Institute for Strategy and Logistics at business college BI. Opposition politicians weren’t enthusiastic about a proposal from the government to pump another NOK 5 billion into SAS to keep it aloft. “It’s time for the Norwegian state to sell off its shares in SAS,” said Harald Nesvik of the Progress Party. Svein Flåtten of the Conservatives said his party colleagues were “even more skeptical” about a government bailout than they were when SAS sought fresh capital last year as well. Terje Aasland of the ruling Labour Party, however, claimed “the alternative is worse.”
(Written February 10, 2010)
The future for Scandinavian Airlines (SAS) remained the subject of much speculation on Tuesday, after the long-troubled carrier reported a huge fourth-quarter loss and sought new capital from its shareholders. Several analysts claimed SAS likely won’t survive in its present form beyond 2014, because there’s a limit to the cost-cuts it can make in the face of severe competition from lower-cost rivals. Some told newspaper Aftenposten they expect a “controlled reorganization” of SAS, perhaps starting with a bankruptcy declaration that would allow formation of a new company without state ownership, with many of its same routes and employees and a restructured fleet of aircraft. “It’s not possible to cut your way to profitability,” analyst Hans Erik Jacobsen of First Securities said. Another option is for Star Alliance partner Lufthansa to finally step in “and pick up the remains of SAS,” said Espen Andersen of the Institute for Strategy and Logistics at business college BI. Opposition politicians weren’t enthusiastic about a proposal from the government to pump another NOK 5 billion into SAS to keep it aloft. “It’s time for the Norwegian state to sell off its shares in SAS,” said Harald Nesvik of the Progress Party. Svein Flåtten of the Conservatives said his party colleagues were “even more skeptical” about a government bailout than they were when SAS sought fresh capital last year as well. Terje Aasland of the ruling Labour Party, however, claimed “the alternative is worse.”
(Written February 10, 2010)
‘Sad day’ for offshore industry after Aker loses Goliat job
Stock in offshore firm Aker Solutions took a dive and labour unions were furious after Aker lost a bid to build a floating production and supply unit (FPSO) for the Goliat gas and oil field in the Barents Sea, about 85 kilometers north of Hammerfest. Italian oil company Eni owns 65 percent of the license for the field, with Statoil owning the rest, and Eni awarded the FPSO contract to Hyundai of South Korea, saying it followed all international bidding rules. Hyundai offered to do the job for NOK 6.9 billion, much less than Aker Solutions’ bid, and that set off criticism over Korean subsidies. Norwegian labour unions were furious the job went to a foreign firm, and they blamed the Norwegian government for “not doing their job” in creating conditions that would have allowed Aker to make a lower bid, or pressured Eni to award the contract locally. Government ministers were as disappointed as the labour leaders, who said it was “a sad day” for Norwegian suppliers in the offshore industry. Newspaper Dagens Næringsliv reported the contract could have provided around 7,000 full-time-equivalent jobs at Aker Solutions’ yards in Egersund and Stord. Oil and Energy Minister Terje Riis-Johansen noted, however, that 50 percent of the development of Goliat, valued at NOK 28 billion, will go to Norwegian firms. Sevan of Norway designed the FPSO that Hyundai now will build.
(Written February 9, 2010)
Stock in offshore firm Aker Solutions took a dive and labour unions were furious after Aker lost a bid to build a floating production and supply unit (FPSO) for the Goliat gas and oil field in the Barents Sea, about 85 kilometers north of Hammerfest. Italian oil company Eni owns 65 percent of the license for the field, with Statoil owning the rest, and Eni awarded the FPSO contract to Hyundai of South Korea, saying it followed all international bidding rules. Hyundai offered to do the job for NOK 6.9 billion, much less than Aker Solutions’ bid, and that set off criticism over Korean subsidies. Norwegian labour unions were furious the job went to a foreign firm, and they blamed the Norwegian government for “not doing their job” in creating conditions that would have allowed Aker to make a lower bid, or pressured Eni to award the contract locally. Government ministers were as disappointed as the labour leaders, who said it was “a sad day” for Norwegian suppliers in the offshore industry. Newspaper Dagens Næringsliv reported the contract could have provided around 7,000 full-time-equivalent jobs at Aker Solutions’ yards in Egersund and Stord. Oil and Energy Minister Terje Riis-Johansen noted, however, that 50 percent of the development of Goliat, valued at NOK 28 billion, will go to Norwegian firms. Sevan of Norway designed the FPSO that Hyundai now will build.
(Written February 9, 2010)
Statoil considers selling off its gas stations
Norway’s Statoil is further distancing itself from an earlier strategy of being an integrated oil company active in all functions from exploration to retailing. Now it’s announced it plans to evaluate “a new ownership structure” for its energy and retail operations. That suggests Statoil wants to spin off its large chain of gas stations into their own stocklisted company, meaning Statoil likely would no longer be their owner and the station names may change. All told Statoil has more than 2,300 gas stations in Norway and northern Europe, with a major presence in Sweden, Denmark, Poland, Lithuania, Latvia, Estonia and Russia. Analysts welcomed the plan but Statoil’s chief founder, Arve Johnsen, protested as did several franchise holders, station managers and customers.
(Written February 4, 2010)
Norway’s Statoil is further distancing itself from an earlier strategy of being an integrated oil company active in all functions from exploration to retailing. Now it’s announced it plans to evaluate “a new ownership structure” for its energy and retail operations. That suggests Statoil wants to spin off its large chain of gas stations into their own stocklisted company, meaning Statoil likely would no longer be their owner and the station names may change. All told Statoil has more than 2,300 gas stations in Norway and northern Europe, with a major presence in Sweden, Denmark, Poland, Lithuania, Latvia, Estonia and Russia. Analysts welcomed the plan but Statoil’s chief founder, Arve Johnsen, protested as did several franchise holders, station managers and customers.
(Written February 4, 2010)
New Swedish shopping center plan upsets Norwegian authorities
Plans to expand a small Swedish retail complex located around 50 meters from the Norwegian border have upset Norwegian authorities, who fear the new shopping center at Långflon, just south of the popular Trysil ski resort, will hurt retailers on the Norwegian side of the border. That’s because prices in Sweden are much lower than in Norway, as are taxes, and Norwegians already flock over the borders at Svindesund, Ørje and Magnor to do their shopping. Norwegian highway officials fear more traffic on narrow roads in the area, township officials as far away as Hamar and Elverum fear competition for their own shopping centers, and even cabinet minister Erik Solheim has gotten involved, telling newspaper Aftenposten that the new Swedish shopping center “will hurt trade all over Hedmark County.” Swedish officials shrug off the criticism, saying the Norwegians are exaggerating the situation. They say their new shopping center will be small in comparison to those already attracting cross-border trade. The Norwegian authorities may also do well to review their own high-tax policies, which send their citizens over the border in the first place.
(Written February 4, 2010)
Plans to expand a small Swedish retail complex located around 50 meters from the Norwegian border have upset Norwegian authorities, who fear the new shopping center at Långflon, just south of the popular Trysil ski resort, will hurt retailers on the Norwegian side of the border. That’s because prices in Sweden are much lower than in Norway, as are taxes, and Norwegians already flock over the borders at Svindesund, Ørje and Magnor to do their shopping. Norwegian highway officials fear more traffic on narrow roads in the area, township officials as far away as Hamar and Elverum fear competition for their own shopping centers, and even cabinet minister Erik Solheim has gotten involved, telling newspaper Aftenposten that the new Swedish shopping center “will hurt trade all over Hedmark County.” Swedish officials shrug off the criticism, saying the Norwegians are exaggerating the situation. They say their new shopping center will be small in comparison to those already attracting cross-border trade. The Norwegian authorities may also do well to review their own high-tax policies, which send their citizens over the border in the first place.
(Written February 4, 2010)
Trade surplus among the largest in the world
Only five countries in the world have a trade surplus bigger than Norway’s, report news magazine The Economist and newspaper Aftenposten, and one of them isn’t entirely comparable. “Little Norway,” as the locals often refer to their own country, ranks as just the 116th in the world when measured in terms of population (currently around 4.8 million). Measured in monetary terms, however, Norway’s trade surplus of NOK 325 billion (around USD 55 billion) ranks 6th in the world, behind Saudi Arabia, China, Germany, Russia and Ireland. The Irish trade surplus is fueled largely by multinational firms that set up production sites in Ireland because of tax advantages, boosting export income at a time when Ireland’s own domestic economy suffered a downturn that led to reduced imports. Ireland’s trade surplus doesn’t necessarily boost its own revenues or economy, Aftenposten notes, while Norway’s trade surplus is based largely on its oil and gas exports that have pumped up the country’s economy for years. Few countries in the world thus sell so much overseas and buy so little back as Norway. Nearly 60 percent of Norway’s export revenues derived from oil and gas sales, the rest mostly from seafood, electricity, aluminum and other metals products. Only 15 percent of export revenues are generated by manufactured goods, since Norway has high labour costs. Øystein Olsen of state statistic bureau SSB noted that Norway’s large trade surplus reflects the country’s political decision to save oil and gas revenues for future generations. “If Norway’s exports and imports were in balance, it would mean we were using up the value of our oil and gas,” Olsen said. “That would be alarming.”
(Written February 3, 2010)
Only five countries in the world have a trade surplus bigger than Norway’s, report news magazine The Economist and newspaper Aftenposten, and one of them isn’t entirely comparable. “Little Norway,” as the locals often refer to their own country, ranks as just the 116th in the world when measured in terms of population (currently around 4.8 million). Measured in monetary terms, however, Norway’s trade surplus of NOK 325 billion (around USD 55 billion) ranks 6th in the world, behind Saudi Arabia, China, Germany, Russia and Ireland. The Irish trade surplus is fueled largely by multinational firms that set up production sites in Ireland because of tax advantages, boosting export income at a time when Ireland’s own domestic economy suffered a downturn that led to reduced imports. Ireland’s trade surplus doesn’t necessarily boost its own revenues or economy, Aftenposten notes, while Norway’s trade surplus is based largely on its oil and gas exports that have pumped up the country’s economy for years. Few countries in the world thus sell so much overseas and buy so little back as Norway. Nearly 60 percent of Norway’s export revenues derived from oil and gas sales, the rest mostly from seafood, electricity, aluminum and other metals products. Only 15 percent of export revenues are generated by manufactured goods, since Norway has high labour costs. Øystein Olsen of state statistic bureau SSB noted that Norway’s large trade surplus reflects the country’s political decision to save oil and gas revenues for future generations. “If Norway’s exports and imports were in balance, it would mean we were using up the value of our oil and gas,” Olsen said. “That would be alarming.”
(Written February 3, 2010)
