Former Ing C Olivetti & Co SpA director general Renzo Francesconi who resigned after less than two months in the post – has been telling the press that the future for Olivetti looked very difficult and he did not agree with some of the company’s half year results – You can make make compromises over strategic plans but you really can’t do that with figures and the accounts, he said, signaling that the company’s mid-year results did not accurately reflect the depth of Olivetti’s financial crisis. Olivetti is taking his remarks as a stain on its honor that has to be avenged, and has reached for its lawyer, insisting that all is in order with the accounts. However Consob, the Milan stock exchange regulator, is taking Francesconi remarks much more seriously, and it called him in for a meeting with Olivetti’s legal representative and management – and in the meantime suspended trading in the shares until it had had clarification. The biggest disappointment in financial circles yesterday however was at how little came out of the conference call with analysts intended to quell turbulent markets. Chief executive Francesco Caio said the loss-making personal computer company would not now reach break-even in 1996. He declined to be drawn on any figures or conclusion – the market wants him to sell or close it. Instead, Caio stressed strategic rather than operational issues, although he highlighted that two of Olivetti’s five companies made profits in the first half of 1996 – the systems and services division, now 65% of group sales, made an operating profit of $32m, and office equipment maker Lexikon made a $26m operating profit. The 41.3%-owned Omnitel Pronto Italia SpA cellular phone consortium, widely seen as Olivetti’s best hope for the future increased the number of subscribers to its network to 500,000 by the end of August. Caio warned that the planned partial flotation of Lexikon will not be possible for 1996 and would be put back to next year. But the prospects for the company are only worsening, because Olivetti’s manufacturing unions are threatening an all-out strike if the company abandons the personal computer business.
