(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Toyota Motor said net profit soared 50% in the third quarter and upgraded its full-year forecasts as the global auto industry gradually recovers from the pandemic. The world's top carmaker made JPY838.7 billion - about USD8.0 billion- in the three months to December, compared with JPY559.3 billion a year earlier, it said as it revised up full-year forecasts for the second straight quarter. Toyota said it saw net profit at JPY1.90 trillion for the year to March 31 compared with its earlier estimate of JPY1.42 trillion. Sales are now seen at JPY26.5 trillion compared with the JPY26.0 trillion previously forecast. Toyota shares closed 1.7% higher in Tokyo on Wednesday at JPY8,130 each.
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Tokio Marine Holdings said its profit dropped in the first nine months of its current financial year due to the coronavirus pandemic. The Tokyo-based insurance company said income for the nine months to the end of 2020 totalled JPY4.096 trillion - about USD39.21 billion - compared to JPY4.095 trillion reported a year earlier. Profit, meanwhile, fell sharply by 39% to JPY182.42 billion, while net income came in 50% lower year-on-year at JPY112.78 billion. This was due to the impacts of Covid-19 and an increase in catastrophe loss reserves. Looking ahead, Tokio Marine said it expects to report full-year profit of JPY310.00 billion, which will be 15% lower than reported the year before. Net income is seen 23% below the prior year's level, at JPY200.00 billion.
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Heineken said it plans to cut its employee base by 8,000 people following a swing to loss in 2020. The Dutch brewing company reported revenue for 2020 of EUR23.77 billion, down 17% when compared to 2019. Operating profit plummeted by 79% year-on-year to EUR778 million, with net loss totalling EUR204 million from EUR2.17 billion profit in 2019. Heineken said currency translation hurt net revenue by 5.3%, mainly driven by the Brazilian real, the Mexican peso, the Nigerian naira, the Russian rouble and the South African rand. For 2020, the company declared a total cash dividend of EUR0.70 per share, representing a decrease of 58% on EUR1.68 paid in 2019. Overall, for 2021, Heineken said it expects revenue, operating profit and operating profit margin to stay below the level of 2019. Regarding the organisational redesign, the company said it will reduce its employee base by 8,000 people, with a total restructuring charge of around EUR420 million and run-rate direct savings on personnel expenses of EUR350 million.
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Smurfit Kappa's full-year earnings came in ahead of guidance, as it ended 2020 on a "particularly strong" note. Smurfit Kappa's revenue in the year ended December 31 fell 5.8% to EUR8.53 billion from EUR9.05 billion. However, profit rose as finance costs were reduced. Smurfit posted pretax profit of EUR748 million, up 10% from EUR677 million. Finance costs fell 28% to EUR179 million from EUR247 million. Earnings before interest, tax, depreciation and amortisation fell 8.5% to EUR1.51 billion from EUR1.65 billion. However, this was ahead of November guidance for Ebitda in a range of EUR1.46 billion to EUR1.48 billion for 2020. The company said it beat earnings expectations due to a "particularly strong finish to the year." The company recommended an 87.4 cents final payout, to go with the 80.9 cents interim payout and a 27.9 cents dividend it paid in December.
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Persimmon said its 2020 results will include a GBP75 million provision to address cladding issues in 26 high-rise buildings. The York, England-based housebuilder said it has identified nine high-rise buildings over 18 metres tall that may need cladding removed. It does not own these buildings but said it will provide technical support to ensure the buildings are made safe. Persimmon also found 17 buildings that may need cladding removed and said it will lead the work on the buildings it owns, while offering assistance for those it does not own. Flammable building cladding came into focus following the fire that engulfed Grenfell Tower, a residential tower block in London, in June 2017. The fire killed 72 people.
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Twitter on Tuesday reported a strong end to the end of 2020 and raised its guidance for the upcoming first quarter. For the fourth quarter ended December 31, revenue was up 28% to USD1.29 billion from USD1.01 billion in the fourth quarter of 2019. Net income was up 88% at USD222.1 million from USD118.8 million, with fourth quarter basic earnings per share of USD0.28, up from USD0.15. The closely-watched average monetizable daily active users reached 192 million in the fourth quarter, up 27% year-on-year, driven by global conversation around current events, such as the US election and Covid-19, alongside ongoing product improvements. Looking ahead, Twitter said it expects revenue to grow faster than expenses in 2021, assuming the pandemic continues to improve and taking into account an expected "modest impact" from Apple's upcoming privacy changes to iOS 14. However, the San Francisco, California-based company warned it expects headcount growth of more than 20% this year, with overall expenses increasing more than 25%.
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MARKETS
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Stocks in Europe were mixed on Wednesday, with London's blue-chip index held back by the strength of local currency amid the UK's strong progress on vaccine rollout. "The FTSE 100 seemed to be stuck in a state of suspended animation on Wednesday with the index surrendering early gains to trade flat," said AJ Bell investment director Russ Mould. "Its performance is being constrained by continuing gains for sterling which crimp the relative value of the overseas earnings which dominate the index." Stocks in US were pointed to the higher open.
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CAC 40: up 0.1% at 5,697.00
DAX 30: down 0.1% at 14,001.49
FTSE 100: up 0.2% at 6,547.25
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DJIA: called up 0.3%
Nasdaq Composite: called up 0.5%
S&P 500: called up 0.3%
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S&P/ASX 200: closed up 0.5% at 6,856.90
Hang Seng: closed up 1.9% at 30,038.72
Nikkei 225: closed up 0.2% at 29,562.93
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EUR: firm at USD1.2121 (USD1.2100)
GBP: firm at USD1.3848 (USD1.3790)
USD: soft at JPY104.54 (JPY104.62)
GOLD: higher at USD1,841.63 per ounce (USD1,837.66)
OIL (Brent): higher at USD61.28 a barrel (USD60.70)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Donald Trump's second impeachment trial began Tuesday, but Republican senators made clear how difficult it will be to win a conviction. Senators voted 56-44 in favour of the constitutionality of the historic trial, rejecting a bid by Trump's lawyers to throw it out on grounds that a former president cannot be tried by lawmakers. The vote, held before the main part of the trial was to get underway Wednesday, saw six Republicans join all 50 Democrats in the evenly divided Senate. Despite this modest show of bipartisanship, the result highlighted the nearly impossible task of getting the two-thirds majority – requiring 17 Republicans to join the Democrats – that would be needed to convict Trump of inciting insurrection. Earlier, both sides presented their opening cases, with Democrats arguing that Trump broke his oath in a naked bid to retain power after losing the November election to Joe Biden.
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Factory prices rose in China for the first time in a year last month as the country's vast industrial sector leads a recovery from the virus pandemic, with analysts hailing the data as a turning point for the world's number two economy. But the lingering effects of the disease weighed on the country's vast army of shoppers as consumer prices slipped, hit by new outbreaks that led to the reimposition of containment measures. Official data showed the producer price index rose by 0.3% in January from a year before, having fallen every month but January in 2020 owing to a collapse in demand as the virus broke out around the country and then the world. The figure was in line with forecasts and a big improvement in the 0.4% annual fall seen in December.
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China's consumer prices fell in January after a brief improvement at the end of last year, as the world's second-biggest economy was hit by the impact of fresh coronavirus outbreaks and decreased travel, official data showed. The consumer price index, a key gauge of retail inflation, fell 0.3% from a year ago, with the National Bureau of Statistics saying that residents travelled less given a series of lockdowns in northern China and more restrictions. The overall CPI drop was below analysts' expectations of prices being unchanged, according to a Bloomberg poll, and down from December's 0.2% on-year rise.
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A member of the WHO mission to China exploring the origins of the coronavirus pandemic took a swipe Wednesday at US intelligence on the issue, after the State Department cast doubt on the transparency of their probe. President Joe Biden "has to look tough on China", expert Peter Daszak said in a tweet as the mission ended, adding: "Please don't rely too much on US intel: increasingly disengaged under Trump & frankly wrong on many aspects." The WHO mission to China ended without finding the source of the coronavirus that has killed more than 2.3 million worldwide. The experts had to walk a diplomatic tightrope, with the US urging a "robust" probe before they left and China warning against the politicisation of the issue. As they wrapped up the mission team member Daszak tweeted that they worked "flat out under the most politically charged environment possible."
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German consumer prices rose both monthly and annually in January, meeting market expectations. According to numbers from Destatis, Germany's annual inflation rate was 1.0% in January, in line with consensus cited by FXStreet. In December, consumer prices fell 0.3% annually. Monthly, consumer prices rose 0.8% in January, also in line with market forecasts. Numbers from Destatis also showed a 1.6% annual rise and a 1.4% monthly hike in the harmonised index. Both figures met market forecasts. The harmonised data allows for EU-wide comparison. Destatis noted December 31 marked the end of the temporary reduction in VAT, which had been put in place as part of a German government stimulus package amid the Covid-19 pandemic. Food prices were 2.2% higher annually, though energy prices are still 2.3% below where they were a year ago.
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Manufacturing output in France slipped in December, figures from Insee showed. In December 2020, production decreased in the manufacturing industry for the first time since April 2020 by 1.7% month-on-month, after growing by 0.7% in November. In the whole industry, which includes manufacturing, mining and production, output decreased month-on-month for the second consecutive month by 0.8% after 0.7%. When compared to February - the last month before the first Covid-19 lockdown - output remained significantly lower in the manufacturing industry by 5.7%, as well as in the whole industry by 4.9%. On an annual basis, manufacturing output fell by 4.4%, while in the whole industry output decreased by 3.8%.
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European Parliamentarians have approved the bloc's Resilience & Recovery plan, paving the way for member states to access almost EUR700 billion in loans and grants to overcome the economic effects of the coronavirus crisis. The grants - about EUR300 billion - will be dispersed for investments and reforms to stimulate countries' economies. To access the money, EU countries have to submit their spending plans by April 30. The commission and EU countries will then have to agree to each plan. In its vote on Tuesday, the results of which were published on Wednesday, the parliamentarians approved the plan by an overwhelming majority.
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