European MNCs incurring losses

The European Debt Crisis is taking a major toll of the European multinationals which derive most of their revenue from the domestic European markets. The crisis which has now continued for most than 2 years shows no signs of abating. The unemployment has kept on rising in the periphery (Spain, Greece, Italy and Portugal) and the economic pain is being felt by these giant companies as well. As customers lose their purchasing power and look for cheaper options, company sales have sunk. Even the better off northern European economies have not been immune. Germany, the European powerhouse is also feeling the effects as the GDP slows down and investor sentiment goes down. Already the global slowdown has resulted in huge layoffs by American MNCs who have fired thousands to cut costs. Now European MNCs like Vodafone, SAS and E.On are closing plants and firing more thousands to retain margins in the face of declining topline.

E.On sees loss as electricity prices go down

Utility E.ON AG on Tuesday said it swung to a net loss in the third quarter of 2012 as it recorded significant impairment charges on thermal power plants across Europe because of rock-bottom wholesale electricity prices and muted energy demand.

Vodafone revenues go down by 20% in southern Europe resulting in $9 billion writedown

The nearly $9.3 billion charge pushed Vodafone, based in Newbury, England, to a £1.9 billion loss in the six months through Sept. 30 after a £6.6 billion profit a year earlier.

In the six months through September, Vodafone said its total revenue fell 7.4 percent to £21.8 billion from £23.5 billion a year earlier. In southern Europe, the declines were twice as steep, with revenue falling 18.1 percent to just under £5 billion. Revenue fell by 18.4 percent in Italy and 19.3 percent in Spain, Vodafone said. About half of the declines stemmed from the weakening of the euro against the pound, which eroded the value of Vodafone’s earnings in the single-currency bloc.

SAS to Shed 6,000 Staff in ‘Final Call’ to Keep Flying

Loss-making Scandinavian airline SAS will sell some of its assets and shed 6,000 staff to secure government-backed loans and stay in business after years of struggling with high costs. “This truly is our ‘final call’ if there is to be a SAS in the future,” said Chief Executive Rickard Gustafson after launching a new rescue plan for the airline, founded in 1951, which has not made a full-year profit since 2007.