2nd Jun 2021 08:00
(Alliance News) - Stock prices in London were seen opening flat on Wednesday following a lacklustre US close overnight and amid a lack of major corporate news or economic data.
In early company news, central and eastern Europe-focused airline swung to an annual loss and said it expected to see further losses in financial 2022 unless virus restrictions are permanently lifted. Larger peer Ryanair reported the first good news on passenger traffic since the pandemic began.
Airtel Africa sold a Tanzanian tower portfolio for USD175 million. Bloomsbury Publishing proposed a special dividend after upbeat annual results.
IG futures indicate the FTSE 100 index is to open 9.04 points higher at 7,089.50. The blue-chip index closed up 57.85 points, or 0.8%, at 7,080.46 Tuesday.
Wizz Air swung to an annual loss as lockdown restrictions curtailed its operations, and its called for a permanent lifting of travel curbs.
For the financial year ended March 31, Wizz Air swung to a pretax loss of EUR566.5 million from a profit of EUR294.1 million the year before on revenue of EUR739.0 million, down 73% from EUR2.76 billion. Ancillary revenue fell by 67% to EUR412.6 million, representing 56% of total revenue.
Wizz Air said that in financial 2021 passengers carried fell 75% to 10.2 million from 40.0 million the year prior.
Looking ahead, Chief Executive Officer Jozsef Varadi said he expects the carrier to fly around 30% of capacity in the first quarter of financial 2022.
Further, Varadi said that unless there is an "accelerated and permanent lifting of restrictions", he expects a reported net loss during 2022. For 2023, Varadi sees a strong trading environment and plans to operate at full capacity as the pandemic subsides.
Varadi said: "We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as Covid-19 restrictions have remained in place longer than anticipated. Therefore, [financial 2022] will continue to be a transition year. Whereas the recovery pattern continues to be difficult to forecast, the trends are encouraging and we are ready as ever.
"We have prepared the company to be an even more formidable player and to take advantage of the next phase of market opportunities that await post pandemic. The investments we have made in our fleet and in our network over the past 12 months will soon yield results."
Ryanair said it flew 1.8 million passengers in May, up from 1.0 million in April and from just 70,000 a year ago. It said it operated 12,000 flights during May with a 79% load factor. On a rolling annual basis, Ryanair flew 30.2 million passengers, down 75% from 121.1 million a year before.
Airtel Africa said it sold a tower portfolio to a joint venture company owned by a subsidiary of SBA Communications Corp for USD175 million.
Airtel Africa said the tower portfolio in Airtel Tanzania comprises 1,400 towers which form part of the its wireless telecommunications infrastructure network. Under the terms, Airtel Tanzania will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with SBA.
The transaction is the latest strategic divestment of the tower portfolio as the company focusses on an asset-light business model and on its core subscriber-facing operations, Airtel said.
"Around USD60 million from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the government of Tanzania, as per the settlement described in the Airtel Africa IPO prospectus document published in June 2019. The balance of the proceeds will be used to reduce debt at group level," the company added.
Bloomsbury Publishing said it delivered record results and hailed the popularity of reading as a "ray of sunshine" during a "very dark year" brought about by the pandemic.
For the financial year ended February 28, pretax profit was up 31% to GBP17.3 million from GBP13.2 million the year before on revenue of GBP185.1 million, up 14% from GBP162.8 million.
Bloomsbury declared a total dividend of 8.86 pence per share, an 8% increase on the 8.17p the year before. It also proposed a special dividend of 9.78p.
CEO Nigel Newton sad: "The popularity of reading has been a ray of sunshine in an otherwise very dark year. In an outstanding year for Bloomsbury, we delivered record results with sales up 14% to GBP185.1 million compared to the industry which was up 2%.
"Since the year end, we have achieved another key step in the delivery of our long-term growth strategy expanding our Non-Consumer business, with the acquisition of the Red Globe Press list. Acquiring these complementary lists accelerates our digital growth and our significant presence in humanities and social sciences academic publishing. Considering the ongoing momentum and strength of our business, Bloomsbury expects revenue to be ahead and profit to be comfortably ahead of market expectations" in the new financial year.
The publisher put those financial 2022 expectations at profit before tax and highlighted items of GBP17.4 million, which compares to GBP19.2 million in financial 2021, on revenue of GBP177.5 million.
The Japanese Nikkei 225 index closed up 0.5%. In China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 0.5%. The S&P/ASX 200 in Sydney closed up 1.0%.
In the US on Tuesday, Wall Street ended mostly lower, with the Dow Jones Industrial Average up 0.1%, but the S&P 500 and Nasdaq Composite both down 0.1%.
Analysts at Danske Bank said: "Equities were mostly higher in Tuesday's trading, although US equities lost steam during the day and closed mixed. Value was back in fashion and what is more - small caps outperformed heavily. The cyclical vs defensive trade was more modest, as growth intense cyclical sector underperformed, which made US a big under-performer. This is more or less spot on of how we expect markets to pan out during summer, both on sector, style and regional levels."
The bank added: "Growth is driving markets lower in Asia as well this morning, with most markets dropping but value-intense Japan higher...futures point to roughly unchanged markets."
The dollar was higher against major counterparts. The pound was quoted at USD1.4152 early Wednesday, down from USD1.4178 at the London equities close Tuesday.
The euro was priced at USD1.2218, lower from USD1.2248. Against the yen, the dollar was trading at JPY109.71, up from JPY109.40.
The UK on Tuesday reported zero daily deaths from Covid-19 for the first time since last July, despite a recent rise in cases linked to the Delta variant.
According to the latest government figures, 127,782 people in the UK have died within 28 days of a positive test since the start of the pandemic - the worst death toll in any European country.
The UK has had 4.5 million cases in total. Tuesday's zero daily deaths came after the government reported just one Covid death across the UK on Monday, a public holiday.
Brent oil was quoted at USD70.51 a barrel Wednesday morning, down from USD71.11 late Tuesday. Gold was trading at USD1,896.18 an ounce, marginally lower against USD1,899.75.
The OPEC group of oil-producing countries and its allies agreed Tuesday to maintain planned production increases, as pandemic-hit demand for crude recovers.
The 23-nation OPEC+ alliance implemented sharp output cuts to support prices after the coronavirus pandemic crushed the global economy last year. But since early May the cartel has started implementing more generous production increases as oil prices have recovered and the health situation improves in developed economies.
At the end of a short meeting on Tuesday which lasted barely half an hour, the group agreed to continue rises up until July adding up to 1.2 million barrels per day, to which will be added a further million bpd which had been voluntarily withdrawn by Saudi Arabia.
The economic calendar on Wednesday has German retail sales at 0700 BST and EU producer prices at 1000 BST.
By Arvind Bhunjun; [email protected]
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