24th Feb 2015 11:28
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The world's largest miner BHP Billiton Group, comprising of BHP Billiton Ltd and BHP Billiton PLC, said its first-half profit nearly halved year-on-year, despite growth in production, owing to the impact of volatile commodity markets. The company slashed capital and exploration expenditure, as well as declared a 5% increase in interim dividend of 62.0 cents. The Melbourne, Australia-based mining giant reported attributable profit of USD4.27 billion or USD0.80 per share for the first half, 47% lower than USD8.11 billion or USD1.52 per share in the same period last year. Excluding exceptional items, underlying attributable profit for the first-half was USD5.35 billion or USD1.01 per basic share, compare to USD7.76 billion or USD1.46 per basic share in the prior-year period.
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Royal Dutch Shell said it is withdrawing its application for the proposed Pierre River oil sands mine in northern Alberta, Canada, so that it can "focus attention on its existing oil sands operations." Oil sands are a combination of clay, sand, water, and bitumen, which is a heavy black viscous oil that can be recovered. "The Pierre River mine remains a very long-term opportunity for us, but it’s not currently a priority,” said Lorraine Mitchelmore, president of Shell Canada and vice president of heavy oil.
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GKN reported lower pretax profit for 2014, hit by a lower valuation of its foreign exchange contracts in its accounts, although profit rose excluding this thanks largely to a lack of restructuring charges that weighed on its 2013 results. The engineer of components for the aerospace and auto markets reported a pretax profit of GBP221 million for 2014, down from GBP484 million in 2013, as it booked a GBP232 million impact from the mark to market valuation of forward foreign exchange contracts. However, its pretax profit excluding this mark to market valuation and other exceptional items, its preferred measure of profitability, rose to GBP601 million, from GBP578 million, after it booked GBP25 million in restructuring charges in 2013.
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Meggitt also reported lower profits for 2014, hurt by a range of factors including adverse exchange rates, disposals, research and development spending and higher sales of less-profitable products, but it said it had returned to organic revenue growth in the second half of the year and its order book has increased. The engineer of components for the aerospace, defence and energy markets also raised its final dividend, a move it said reflects its continuing confidence in its prospects. Meggitt reported a pretax profit of GBP208.9 million for 2014, down from GBP269.4 million in 2013, as revenue fell to GBP1.55 billion, from GBP1.64 billion.
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Persimmon joined peer Bovis Homes in reporting a big rise in profit for 2014 driven by higher home sales at higher average prices, and said 2015 had got off to a solid start. Persimmon expects a slight slowdown in the market around May's General Election, but said the improving UK economy and increased mortgage lender support for the Help to Buy scheme would drive the market for 2015 as a whole. Persimmon reported a pretax profit of GBP467.0 million for 2014, up from GBP337.1 million in 2013, as revenue rose to GBP2.57 billion, from GBP2.09 billion. Legal completions rose 17% to 13,509 homes, while its average selling price rose 5.3% to GBP190,533.
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Mondi reported higher profits for 2014, driven largely by cost-cutting and other measures aimed at boosting margins, and said it is confident of "making further progress" in 2015 thanks to the investments it has been making in the business. The South Africa-based paper and packaging company reported a pretax profit of EUR619 million for 2013, up from EUR499 million in 2013, even though revenue dropped to EUR6.40 billion, from EUR6.48 billion. It raised its full-year dividend to 42.0 euro cents, from 36.0 cents in 2013.
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The future of Just Retirement as a listed company depends on shareholders, according to Chief Executive Rodney Cook, who told reporters that the annuity provider would participate in industry consolidation if it improves value. Just Retirement, which floated on the London Stock Exchange in November 2013, remains majority-owned by Avallux Sarl, an entity controlled by private equity firm Permira, which holds a 62% stake in the company, with a 38% free float. On Tuesday, Just Retirement reported resilient first-half results, as the market awaits the introduction of new pensions and savings rules in April this year.
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Croda International reported a fall in 2014 pretax profit, with sales falling as weak consumer demand in key markets hit its personal care business, commodity markets volatility dragged back its industrial chemicals unit and the strength of sterling weighed on its reported results. FTSE 250-listed Croda said its pretax profit for the year to the end of December was GBP229.4 million, down from GBP250.1 million a year earlier. Sales for the year fell to GBP1.05 billion from GBP1.08 billion a year earlier, hit by a fall in its personal care sales and by industrial chemicals revenue, as well as the strength of sterling which weighed on overseas sales when translated into the currency. At constant currencies, sales for 2014 rose to GBP1.11 billion.
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Shares in Elementis were trading lower after the company posted a rise in pretax profit and sales in 2014 and hiked its dividend, but said the strong performance in its specialty products business it being held back by flat trading in its chromium arm and weakness in its surfactants unit. The FTSE 250-listed specialty chemicals company's shares were down 2.0% to 278.75 pence, one of the worst performers in the FTSE 250, after it said its pretax profit for the year to the end of December was USD141.9 million, up from USD136 million last year. Sales for the year rose to USD790.4 million, compared to USD776.8 million last year, as a strong performance in its specialty products unit was offset to a degree by the performances in its chromium and surfactants businesses, though Elementis said both performed in line with its expectations.
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NMC Health announced a deal to buy up an 86.4% stake in Barcelona-based fertility treatment clinic Clinica Eugin for EUR143 million, as it posted a rise in pretax profit for 2014. The private healthcare provider in the United Arab Emirates posted a pretax profit of USD77.5 million, up from USD69.1 million, as revenue rose to USD643.9 million from USD550.9 million and it posted a higher depreciation charge. NMC proposed a total dividend per share for the year of 5.4 pence, up from 4.4 pence a year before.
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Ashmore Group reported a 37% rise in first-half pretax profit to GBP110.7 million despite reporting a 15% fall in the assets it manages over the course of the six months. In a report on the six months to the end of December 2014, the emerging markets asset manager said that pretax profit rose due to "rigorous control" of operating costs, higher performance fees, and a stronger dollar, all of which combined to offset a decline in management fee income. Assets under management fell to USD63.7 billion from USD75.0 billion over six months, contributing to a fall in first-half net management fees to GBP133.0 million from GBP149.8 million in the corresponding period last year.
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Aer Lingus, the Irish airline that's backing a takeover attempt by International Consolidated Airlines Group, reported that it swung to a pretax loss in 2014 as it made a large one-off payment into its pension scheme, although operating profit rose as it reported growth in passenger numbers and average fares. The Irish flag carrier reported a pretax loss of EUR111.5 million for 2013, compared with a profit of EUR39.6 million in 2013, as it made a EUR190.7 million payment into the pension scheme following a settlement agreed between the airline, unions, the pension trustees and the Irish pension authority.
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MARKETS
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London stocks trade flat to lower as investors await the decision by Greece's creditors on the country's economic reform proposals and US Federal Reserve Chair Janet Yellen's semi-annual Congressional testimony on monetary policy.
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FTSE 100: flat at 6,912.24
FTSE 250: down 0.2% at 17,130.34
AIM ALL-SHARE: down 0.1% at 712.29
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GBP-USD: down at USD1.5445
EUR-USD: down at USD1.1306
GOLD: down at USD1196.98 per ounce
OIL (Brent): down at USD58.91 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK Chancellor of the Exchequer George Osborne is to meet the chief executive of Oil and Gas UK, the organisation that represents the UK offshore industry, on Wednesday to discuss what action is needed by both industry and government to "ensure the long term success of the sector." Oil and Gas UK has conducted a survey to show its member companies' upcoming plans for exploration, investment and production in the UK, predominantly in the North Sea, and the organisation said the industry is "facing a difficult period as a result of falling oil prices." The survey "provides striking evidence of how rising costs, taxes and inadequate regulation have taken their toll on the UK industry’s international competitiveness," and "highlights the urgency with which measures are needed to secure new investment and address the collapse in exploration," said Oil and Gas UK in a separate statement.
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The German economy gained momentum towards the end of 2014 as initially estimated driven by foreign demand and household spending, detailed results published by Destatis showed. Gross domestic product grew 0.7% in the fourth quarter from last quarter, when it was up 0.1%. The sequential growth came in line with the preliminary estimate published on February 13. The calendar-adjusted GDP advanced 1.4% on a yearly basis following third quarter's 1.2% increase. At the same time, adjusted for price variations, GDP rose 1.6% versus 1.2% in the previous quarter. Annual numbers also matched initial data.
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Eurozone harmonized consumer prices declined the most since July 2009 as initially estimated at the start of 2015, final data from Eurostat showed.The harmonized index of consumer prices in the 19-nation currency bloc fell 0.6% year-on-year in January, following a 0.2% drop in December. The rate came in line with the flash estimate published on January 30. This was the second consecutive fall in prices and the lowest since July 2009. On a monthly basis, the index declined 1.6% in January.
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Greece will submit new economic reform proposals on Tuesday in a bid to secure a four-month extension to the European share of its bailout, with Finance Minister Yanis Varoufakis blaming the one-day delay on the country's international creditors. Athens had been asked to come up with a detailed list of reforms by midnight on Monday, as part of an agreement reached last week with eurozone finance ministers to extend the country's bailout until June and receive loans to repay its debts. But with less than four hours to go until the deadline, Prime Minister Alexis Tsipras' office issued a statement saying that Athens would send the list off on Tuesday, ahead of a Greek cabinet meeting at 12 pm (1000 GMT). Eurozone finance ministers are then expected to hold a teleconference in the afternoon to discuss the proposals submitted by the new leftist government. According to the statement from Tsipras' office, its six-page list of proposed reforms will include measures to fight tax evasion and corruption, cut down on bureaucracy and address the humanitarian crisis Athens says has been created by Greece's six-year recession. Late Tuesday morning, Eurogroup President Jeroen Dijsselbloem confirmed a conference call on Greece will be held at 2 pm.
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Members of Opec have discussed holding an emergency meeting if crude continues to slide, the Financial Times reports, citing an interview with Nigeria’s oil minister. The comments by Diezani Alison-Madueke come three months after the cartel’s decision to hold production at 30 million barrels a day, even as the oil price has plunged since mid-June, and is a sign of their growing alarm over the impact of a lower oil price on their economies, the FT reports.
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The pro-Russian separatists in eastern Ukraine said that they are starting a full-scale unilateral withdrawal of their heavy weapons from the front line, while fresh talks on implementing a ceasefire began in Paris. The self-declared Donetsk People's Republic plans to withdraw 96 artillery howitzers, militia leader Eduard Basurin said according to the rebel-run Donetsk News Agency. He added that the rebels already withdrew 20 units over the past days. Ukraine said Monday that it won't withdraw its heavy weapons, citing continued ceasefire violations by the separatists. On Tuesday, the military operations centre said that separatists opened fire 12 times on Ukrainian positions.
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The next round of talks between Tehran and six world powers on the Iranian nuclear programme is expected on March 2 in Geneva, the US and Iran said. Some progress was made in the latest round of nuclear talks between Iran, the US and other world powers that ended Monday in Geneva, Iranian Foreign Minister Mohammad Javad Zarif said. "However, we still have a long way to go until an agreement," he said after talks with US Secretary of State John Kerry, noting that a new round would start likely next Monday in Switzerland, according to Iranian media.
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US President Barack Obama warned that this week's looming expiration of the Homeland Security Department budget would put national security at risk unless the opposition-led Congress passes new spending authority. The civilian department's budget expires Friday. Conservative Republicans, who hold majorities in both chambers of Congress, have sought to use the homeland security budget to counter a November executive order by Obama to protect up to 5 million illegal immigrants from potential deportations.
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Related Shares:
BHP Billiton PLCBovis HomesNMC.LAshmoreMGGT.LPersimmonCroda InternationalElementisGKN PLCMondiJRG.L