Mannesmann AG, the German telecommunications, automotive and engineering conglomerate has had a mixed first quarter. The news is that sales across the group are up by 14% but don’t expect bigger profits from the telecommunications division this year. Telecommunications was enormously profitable in 1996, contributing 94% of Mannesmann’s $589m total profit from operating activities on just 12% of the group’s revenues. And now the company plans to invest heavily in this sector with a proposed budget of $5bn over the next 5 years. The cash is principally for expansion of the group’s D2 mobile phone network. Managing board member Klaus Esser warned investors that profits from the telecommunications sector would be flat this year as a result of this investment but improvements elsewhere should help group profits to grow.