Spain Business Brief - Wednesday October 28 2009

Spain Business Brief - Wednesday October 28 2009
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By h.b. - Oct 28, 2009 - 1:08 PM

EFE

Three percent fall in profit at Santander

Banco Santander has announced profits for the first nine months of the year at 6.740 billion €, 3% down on last year at the same time. However the bank is now placing 2.247 billion aside as a provision for bad debt. A statement from Santander said the numbers allowed them to meet their objective of repeating the profit of 8.876 billion made last year. Santander says however that bad debt has reduced to stand at 3%.

Fewer tourists have been coming to Spain and for less time, but they have been spending more per day.
New numbers released today by the Ministry for Industry, Trade and Tourism show the total spend by the lower number of visitors in September was 5.017 billion €, 8.5% down on the same month last year. The average daily spend remains stable at 94 €, although it jumped to 102 € in September.
However the number of tourists visiting the country over the first nine months of the year is 9,8% down on last year at 42.1 million. Total spending was down 7.5% compared to last year.

The Mercadona supermarket chain has promised to continue reducing prices, with the company chairman, Juan Roig, considering the recession is here for the long term. He said admitting that was key to getting out of the recession, and claimed that prices in his stores have fallen by 16% so far this year.
Meanwhile Dia has announced that to mark its 30th anniversary they will be reducing prices by as much as 70% on its 350 top lines. The price reductions will last for a month.

Despite press reports otherwise, the Spanish Prime Minister, José Luis Rodríguez Zapatero, has said that he would not oppose Rodrigo Rato becoming the new Chairman of Caja Madrid savings bank. Rato is the favoured candidate of PP leader Mariano Rajoy. Earlier press reports said Zapatero was against him because of the way he abandoned his post in the International Monetary Fund.

NH Hotels have announced they have moved into the red, blaming low occupancy levels and a fall in the business traveler sector for the 65.1 million € loss for the year so far. The company says it hopes to recover thanks to its merger with Hesperia which has taken the number of establishments to 400. NH Hotel shares fell 8.6% on the market on the release of the results.

Steel makers Arcelor Mittal have also moved into the red, moving from a 7.9 billion profit to a loss of 697 million for the year to the third quarter. The company says it expects prices and demand to recover before the end of the year.

An estimated 40,000 passengers were affected by the two day strike by Iberia cabin crew on Monday and Tuesday this week, while plans for a second 48 hour stoppage remain in place for November 10 and 11, and more dates are threatened by the unions. A total of 438 flights were cancelled in this week’s stoppage.

Meanwhile the Lara family, the owners of the Planeta Group, have sold their 14% shareholding in the low cost airline Vueling, at 11 € a share, picking up 47 million €. The move increases the Iberia shareholding in the airline to 45%. The Lara family was one of the founders of Vueling which completed its merger with Clickair earlier this year.

Staying with aviation related matters, the BAA, the British Airports Authority is responsible for a 700 million € loss for the Spanish parent company, Ferrovial. The company says the sale of Gatwick and changes to the pension plan will improve the losses which are up 71% compared to the same period, the first nine months of the year, last year.

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