Arab Today, arab today spanish firms cut prices halt dividends to face downturn
Last Updated : GMT 20:08:40
Arab Today, arab today
Arab Today, arab today

Spanish firms cut prices, halt dividends to face downturn

Arab Today, arab today

Arab Today, arab today Spanish firms cut prices, halt dividends to face downturn

Madrid - AFP

Telefonica suspends dividend payments, Mango cuts prices and Santander boosts its debt provisions: Spanish companies are stepping up measures against an economic crisis that has no end in sight. In a surprise announcement Wednesday, Telefonica said it had scrapped its dividend and share buy-back programme for 2012, and slashed pay for top managers by 30 percent, in response to the deepening downturn at home. \"This exceptional decision will immunise the company from debt market liquidity conditions by having debt maturities covered till the end of 2013,\" said Telefonica chief executive Cesar Alierta. Telefonica and other large Spanish companies are racing to slash debt piles built up during a decade-long boom that ended in 2008 when the property market collapsed, and have been struggling to access funding on global markets. \"The majority of Spanish companies are heavily indebted, the debt of those that make up the Ibex-35 share index is higher than their market capitalisation, which means that what they owe is higher than what they are worth,\" said analyst Daniel Pingarron of brokerage IG Markets. Telefonica alone has a debt mountain of 57 billion euros ($67 billion). \"It is true that these measures will hurt the credibility of the company with its shareholders, but these measures will allow it to save up to 10.2 billion euros over the next two years,\" Spanish bank Bankinter said in a note. Business daily Expansion said \"Telefonica had grabbed the bull by the horns\", adding the company \"shows the path that other Spanish firms, which are also affected by a very adverse financial and economic environment, must take.\" Spain, the eurozone\'s fourth-largest economy, is struggling with its second recession in four years and the debt crisis that has pushed its banking system to the brink. Last week the government predicted the Spanish economy would remain in recession until 2014. It forecasts that output will shrink by 1.5 percent this year and a further 0.5 percent next year before posting modest growth in 2014. The economic downturn, combined with government austerity measures such as higher taxes and pay cuts for public sector workers, has led to a sharp drop in consumer spending. Telefonica\'s revenues in Spain, where one in four people are out of work, dropped 13 percent in the second quarter, compared to a 6.0 percent drop in Europe overall. Revenues in Latin America increased 6.0 percent. In response companies are slashing prices. Spanish retailer Mango, which employs British supermodel Kate Moss in its latest ad campaign, announced in March that it would cut average prices of its spring-summer collection by 20 percent to attract more customers. El Corte Ingles, one of Europe\'s largest department store chains, followed Mango\'s example last month and cut prices on 5,000 food and drugstore items by 20 percent. Banks meanwhile are boosting their provisions under government orders to cover possible losses resulting from bad real estate loans. Santander, the biggest eurozone bank by capitalisation, said Thursday it had set aside almost all of its second quarter earnings as provisions. It posted a net profit for the period of 100 million euros, down from 1.39 billion euros in the second quarter of last year. \"The provisions we are making will allow us to put real estate write-offs in Spain behind us by the end of this year,\" said Santander Chairman Emilio Botin. Given Spain\'s bleak economic prospects, Spanish companies are stepping up their operations abroad, especially in fast-growing Latin America where a common language and culture give them an advantage. \"They are absolutely right to do so. Especially for the construction firms because it is obvious that here, following the collapse of the property bubble, they are not going find big opportunities,\" said Pingarron. \"All companies are looking to internationalise and enter emerging markets, mainly South America,\" he added.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today spanish firms cut prices halt dividends to face downturn Arab Today, arab today spanish firms cut prices halt dividends to face downturn

 



Arab Today, arab today
Arab Today, arab today Fadi Kataya explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Messi visit will contribute in tourism

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Mental conflict endures

GMT 07:36 2017 Friday ,24 February

Mental conflict endures

GMT 21:36 2017 Wednesday ,22 February

Opec needs to prolong cuts to eliminate surplus

GMT 16:32 2017 Wednesday ,22 February

US Treasury chief tells IMF to monitor currencies

GMT 16:08 2017 Wednesday ,22 February

Qatari banks merger to rebalance financial sector

GMT 05:57 2017 Wednesday ,22 February

Britain risks clash with EU over RBS bailout

GMT 05:26 2017 Wednesday ,22 February

Singapore carbon tax would hit refiners, help renewables

GMT 05:18 2017 Wednesday ,22 February

Chinese PM: US should avoid ‘trade war,’

GMT 20:59 2017 Tuesday ,21 February

Economy good, but homes in German cities overpriced
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Wafaa Amer is happy for Sherihan’s return

GMT 07:36 2017 Wednesday ,22 February

Wafaa Amer is happy for Sherihan’s return
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday