Lego to build up presence in Mideast with Dubai office

Lego sees growth potential in the Middle East. (AP)
Updated 07 March 2018
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Lego to build up presence in Mideast with Dubai office

LONDON: The Danish toy company Lego is planning to ramp up growth in the Middle East with the opening of an office in Dubai toward the end of this year, according to the company’s CEO Niels Christiansen. 
“The market there is already big, it is already growing … We believe we can accelerate that by now putting people on the ground in Dubai who can develop the region further,” he said at a press conference on March 6.
His comments come as the toy brick-maker announced that its 2017 profits were down compared to the previous year, with full-year net profit dropping to 7.8 billion Danish kroner ($1.3 billion) compared to 9.4 billion kroner in 2016. 
Revenues decreased by 8 percent to 35 billion kroner in 2017 compared to 37.9 billion kroner last year.
The reduced revenues were partly blamed on too much inventory already sitting in shops and warehouses that needed to be sold off. Global consumer sales were flat in 2017, moving upward in the final months of the year benefiting from the Christmas season. 
“2017 was a challenging year and overall we are not satisfied with the financial results,” Christiansen said. 
“However, we ended the year in a better position. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. In 2018, we will stabilize the business and invest to build sustainable growth in the longer term,” he said. 
He said there was “no quick-fix” to the company’s fortunes. “It will take some time to achieve longer-term growth,” he said. 
While revenues declined in the company’s established markets of North America and Europe, Lego saw “significant” revenue growth in China. 
The company is planning to further expand in the country, and last year signed a partnership deal with one of the country’s largest Internet companies, Tencent, to work together to develop online games for Chinese children.


Air Berlin’s administrator sues Etihad for up to €2 billion

Updated 30 min 45 sec ago
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Air Berlin’s administrator sues Etihad for up to €2 billion

  • Carrier has until end of January to respond to claims
  • Etihad owned a 29 percent stake in Air Berlin

LONDON: The administrator of German airline Air Berlin is suing Abu Dhabi-based Etihad for up to €2 billion in damages, a Berlin court heard on Friday.
The administrator alleges that the Abu Dhabi airline did not meet its financial obligations to Air Berlin, in which it was the majority shareholder.
“The claims are for payment of $500 million and the establishment that the defendant is obliged to pay further damages. The Chamber has provisionally set the amount in dispute at up to €2 billion,” the court said in a statement, Reuters reported.
"We confirm that we have received a claim filed at the Berlin Regional Court by the insolvency administrator of Air Berlin," Etihad said in a statement to Arab News. "We believe that the claim is without merit and will defend ourselves vigorously against it."
The carrier has until the end of January to respond to the claims, according to the court.
Etihad owned a 29 percent stake in Air Berlin as part of its so-called “equity alliance” strategy.
Etihad told Air Berlin in April 2017 that it would provide funding to the German budget carrier for the next 18 months.
However the Abu Dhabi-based airline later said it would no longer provide funding as Air Berlin’s business had deteriorated at an unprecedented pace.
The administrator claims this sealed the fate of the German airline as its fundling lifeline was cut.
Unlike regional rivals Emirates and Qatar Airways, Etihad grew its business through a strategy of taking stakes in often struggling regional carriers, some of which were also heavily unionized. The carrier described such deals as “equity alliances” and they came to define the tenure of former chief executive James Hogan.
However the strategy ran into serious problems after it was forced to absorb massive losses from its investment in Air Berlin, Alitalia and other carriers.
But the airline is now reviewing that strategy after being forced to absorb huge losses from its investments in carriers such as Alitalia and Airberlin.
Like its regional rivals, the Abu Dhabi carrier has cut jobs over the last two years.