9th Feb 2022 11:01
(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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GlaxoSmithKline met expectations with its 2021 results as it said the demerger of its consumer health business is on track for this year. Revenue for 2021 nudged up to GBP34.11 billion from GBP34.10 billion the year before, marginally ahead of market forecasts for GBP34.08 billion. The Brentford, England-based pharmaceutical firm noted that sales, while stable year-on-year on a reported basis, were up 5% at constant exchange rates. Covid-19 sales contributed 4 percentage points to growth. Pretax profit declined to GBP5.44 billion from GBP6.97 billion. Adjusted pretax profit came in at GBP8.09 billion, in line with analyst expectations. Glaxo declared a dividend of 23 pence for the fourth quarter, bringing the year's total to 80p, in line with the year before. Pharmaceutical turnover in 2021 was GBP17.73 billion, up 4% on a reported basis up 10% higher at constant currencies. Consumer Healthcare turnover was GBP9.61 billion, down 4% on a reported basis but remained stable at constant exchange rates. For Consumer Healthcare, Glaxo said it is on track to demerge the business mid-year. It will provide a medium-term outlook for the division at a capital markets day later this month.
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Pfizer forecast more than USD50 billion in 2022 sales for its Covid-19 vaccine and therapeutic on Tuesday as the pharmaceutical giant reported a more than doubling of annual profits on strong sales of its inoculation. Pfizer, whose vaccine developed with German company BioNTech was the first approved in the US to counter the deadly virus, sees slightly lower 2022 revenues for the vaccine compared with the just-finished year, but a big infusion of revenues from Paxlovid, the company's pill for Covid-19. Chief Executive Albert Bourla described 2021 as a "watershed year" for Pfizer, adding that the company's efforts in the pandemic "have fundamentally changed our company forever." Still, shares fell Tuesday following the results, which lagged estimates in terms of fourth-quarter revenues.
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Carmaker Toyota Motor said that, despite negative factors such as constraints on supply due to the shortage of semiconductors and the spread of Covid-19, it had achieved higher sales and profits. For the nine months to December 31, Toyota reported net income of JPY2.384 trillion, around GBP15.22 billion. This was up 59% from JPY1.499 trillion during the same period the previous year. Sales revenue was up 19% to JPY23.267 trillion from JPY19.525 trillion. Looking forward, Toyota said it expects 2022 full-year net income of JPY2.490 trillion and sales revenue of JPY29.500 trillion. In 2021, the company reported net income of JPY2.282 trillion and sales revenue of JPY27.215 trillion.
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Honda Motor's profit dropped 32% in the last quarter amid rising material costs and a shortage of computer chips. The Japanese car maker reported a profit for the three months to December of JPY192.9 billion, about GBP1.1 billion, down from JPY284 billion a year before. The Tokyo-based company said quarterly sales slipped 2% to JPY3.7 trillion, about GBP23.6 billion. Like the rest of the world's car makers, Honda's manufacturing has also been affected by delays due to coronavirus restrictions. Japan's top car company, Toyota, reported a similar drop in profit. Honda said it expects the challenges to persist. Rising material costs are also a problem, but the company said cost-cutting efforts have allowed it to raise its profit projection.
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Commonwealth Bank of Australia lifted its interim dividend and reported a surge in profit. In the six months to December 31, the Sydney-based financial services firm posted total operating income of AUD12.21 billion, about USD8.65 billion, up 2.0% from AUD11.96 billion a year earlier. Pretax profit increased 22% annually to AUD6.69 billion from AUD5.49 billion. The first half showing was "strong" in what was a low interest rate environment, CBA said. CBA's CET1 ratio dipped to 11.8% at the end of December, from 13.1% in June. The company said this was partly down to a AUD6 billion off-market share buyback. It still has a "strong capital position", however, CBA said. Continuing with shareholder returns, CBA lifted its interim dividend by 17% yearly to AUD1.75 per share.
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Talks between mutual insurers Royal London and LV= over a potential merger have ended with both sides walking away. The mutuals started discussions shortly after an attempted takeover of LV= by private equity firm Bain Capital in December failed to win enough support from its 1.2 million members. But on Wednesday, Royal London appeared to suggest it had been misled by LV= over the company's need to merge or risk going bust, whilst LV= said the different business models made a merger impossible. Royal London Chief Executive Barry O'Dwyer said: "Mutuals are owned by their customers and are run for their benefit. "Our offer to preserve LV='s mutuality through a merger with Royal London was based on an understanding that LV= did not have a viable future as an independent company." LV= said a deal would not be possible because "our different mutual models mean such a merger would not be in the best interests of LV= members."
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French telecoms firm Iliad, owner of internet service provider Free, has submitted a bid to buy Vodafone's Italian unit, a company spokesman told AFP on Tuesday, confirming a report by the financial news agency, Bloomberg, without disclosing any financial details. Iliad, owned by telecoms billionaire by Xavier Niel, entered the Italian mobile market in 2018 where it has since built up a market share of 11% and has subsequently also moved into the fixed line sector. It is targeting revenue of around EUR1.0 billion in Italy this year. Vodafone Italia holds a share of 29% in the mobile market in Italy and a 16% share in fixed-line telephony.
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Irish packaging maker Smurfit Kappa reported annual profit growth despite battling cost inflation in 2021. Revenue for 2021 amounted to EUR10.11 billion, up 18% from EUR8.53 billion the year before. Pretax profit jumped 22% to EUR913 million from EUR748 million. While input costs remain at elevated levels, the Dublin-based firm expects to recover these in the year ahead. Smurfit Kappa raised its final dividend by 10% to 96.1 cents.
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Housebuilder Barratt Developments raised guidance for home completions for its full financial year, after a strong first half. Total home completions for the Leicestershire, England-based property developer were down 11% to 8,067 in the six months that ended December 31 from 9,077 a year before. Revenue was down 9.9% to GBP2.25 billion in the first half from GBP2.49 billion in the comparative period of financial 2021. However pretax profit remained fairly flat, edging up 0.6% to GBP432.6 million from GBP430.2 million the previous year. Operating margin increased by 230 basis points to 19% from 17%. Barratt declared an interim dividend of 11.2 pence per share, up from 7.5p the previous year. In its second half so far, trading has been "very strong" with a 6.2% growth in net private reservations per week. Total forward sales from the end of January were 15,736 homes, up 10% from the previous year, at a value of GBP4.11 billion, up 17% year-on-year from GBP3.43 billion.
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Miner Anglo American said its new Aquila steelmaking metallurgical coal mine is on schedule and on budget, marking the project's final stages of construction and commissioning. The mine, located near Middlemount in central Queensland in Australia, extends the life of Anglo American's existing Capcoal underground operations by seven years, after the company's nearby Grasstree mine reached its end of life in recent weeks.
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Siemens Energy said continuing constraints in global supply chains has caused challenges in the business, particularly for its 67%-owned Siemens Gamesa Renewable Energy business. In the first quarter of 2022, the Munich-based energy company swung to a net loss of EUR240 million from net income of EUR99 million in the same quarter of the previous year. Basic earnings per share also swung to a loss, dropping to a loss of EUR0.18 from a profit of EUR0.09. Due to its financial performance, Siemens Energy revised its outlook for 2022. The company said it now expects revenue to come in between down 2% and up 3%. Adjusted earnings before interest, tax, and amortisation margin before special items is expected to growth by between 2% and 4%.
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MARKETS
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Equities were higher globally following a strong close on Wall Street on Tuesday, though the FTSE 100 in London was underperforming amid dollar weakness. The US currency was lower amid easing tensions over Ukraine. Among companies making news, GlaxoSmithKline shares were down 1.3% in London, while Toyota closed up 0.9% in Tokyo and Honda up 0.4%.
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CAC 40: up 1.5% at 7,133.06
DAX 40: up 1.5% at 15,467.34
FTSE 100: up 0.5% at 7,603.29
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Hang Seng: closed up 2.1% at 24,829.99
Nikkei 225: closed up 1.1% at 27,579.87
S&P/ASX 200: closed up 1.1% at 7,268.30
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DJIA: called up 0.6%
S&P 500: called up 0.7%
Nasdaq Composite: called up 0.9%
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EUR: up at USD1.1425 (USD1.1413)
GBP: up at USD1.3573 (USD1.3551)
USD: down at JPY115.40 (JPY115.60)
Gold: up at USD1,828.10 per ounce (USD1,825.73)
Oil (Brent): firm at USD90.55 a barrel (USD90.28)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Prime Minister Boris Johnson will face members of Parliament on Wednesday after tinkering with his top team as he looks to stave off a confidence vote and lay the foundations for the next election battle. After months of being dogged by partygate allegations and a fresh controversy over his Jimmy Savile remarks, Johnson opted to embark on a mini-reshuffle on Tuesday as he attempts to regain his grip on power. Expected to join the PM on the frontbench for Prime Minister's Questions is new Chip Whip Chris Heaton-Harris. The long-time ally of Johnson replaces Mark Spencer, who was moved to Leader of the Commons after a series of missteps in managing the Conservative parliamentary party. Spencer's predecessor Jacob Rees-Mogg was shuffled into the newly minted role of Minister for Brexit Opportunities, in a move seen as an attempt to appease the Tory right-wing faction.
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Germany's trade surplus narrowed for the fifth year in a row in 2021, as a global supply crunch hampered exports, including in its key auto sector. The trade balance of Europe's biggest economy showed a surplus of EUR173.3 billion last year, down from EUR180.4 billion in 2020, the federal statistics office Destatis said.
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Italy industrial production decreased by more than expected in December on the prior month, data from national statistics office Istat showed. Italy industrial production decreased by 1.0% in December from November, after a 2.1% increase in November from October. The December result was worse than market expectations cited by FXStreet of a 0.7% decline. On an annual basis, industrial production rose by 4.4%, slowing from the 6.6% increase of November and short of market expectations of 5.0% growth.
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The leaders of Germany, France and Poland said they were united in the goal of preventing war in Europe as a diplomatic push to resolve the Ukraine crisis moved to Berlin on Tuesday. German Chancellor Olaf Scholz, fresh from his meeting a day earlier with US President Joe Biden, promised again that there would be "far-reaching consequences" for Russia should it invade Ukraine. The impact on Russia would be "political, economic and certainly geostrategic," he said. But, in a pattern that has frustrated allies, Scholz did not offer any specifics in terms of possible sanctions.
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The World Health Organization lamented that half a million Covid-19 deaths had been recorded since the Omicron variant was discovered, calling the toll "beyond tragic". The WHO's incident manager Abdi Mahamud said that 130 million cases and 500,000 deaths had been recorded globally since Omicron was declared a variant of concern in late November. It has since rapidly overtaken Delta as the world's dominant Covid variant because it is more transmissible, though it appears to cause less severe illness.
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By Tom Waite; [email protected]
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