(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Airbus posted a sharp earnings fall during a year which saw the aerospace firm's net commercial deliveries plunge by almost two-thirds as the aviation sector was battered by Covid-19. Chief Executive Officer Guillaume Faury called Covid-19 "the most challenging crisis to hit the aerospace industry". And looking ahead to 2021, commercial aircraft deliveries are expected to stay at the same level. For all of 2020, revenue was down 29% to EUR49.91 billion from EUR70.48 billion. Net loss narrowed to EUR1.13 billion from EUR1.36 billion. Earnings in 2019 had been hurt by EUR3.60 billion worth of penalties and a EUR1.21 billion charge relation to A400M military transport aircraft. Removing these one-offs, Airbus said adjusted Ebit fell 75% to EUR1.71 billion in 2020.
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Orange posted an annual revenue rise and set out plans to establish a separate towers business. The French telecommunications firm ended 2020 with a 1.5% revenue fall to EUR10.92 billion in the three months ended December. For the whole year, revenue rose 0.1% to EUR42.27 billion from EUR42.24 billion in 2019. Pretax profit fell 9.9% to EUR4.21 billion from EUR4.67 billion. Net income rose 57% to EUR5.06 billion however, helped by a EUR2.25 billion tax refund. The company kept its dividend at EUR0.70 per share. Orange also unveiled plans to establish Totem, a European towers company 25,500 sites in Spain and France.
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Carrefour posted strong annual like-for-like growth, hailed its "record commercial performance in 2020", and set out plans to ramp up cost-savings in the medium-term. Massy, France-based Carrefour operates food shops of all sizes, from convenience stores and cash & carry shops to supermarkets and hypermarkets. It has some 7,000 convenience stores, 3,400 supermarkets and 1,200 hypermarkets globally. In the three months to December 31, sales pre-IAS 29 fell 3.9% annually to EUR21.74 billion from EUR20.89 billion. IAS 29 is a financial reporting standard which takes into account hyperinflationary currencies. For the whole of 2020, total revenue was down 2.7% to EUR72.15 billion from EUR74.14 billion. Net sales fell 2.3% to EUR70.72 billion in 2020, but were up 4.3% at constant currency. Carrefour's pretax profit climbed 88% in 2020 to EUR1.35 billion from EUR719 million.
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Credit Suisse reported a double-digit income fall in 2020 following a swing to loss in the final quarter of the year. The Zurich-based bank said pretax income totalled CHF3.5 billion for 2020, down 27% year-on-year. Credit Suisse said its net income attributable to shareholders decreased by 22% on the prior year to CHF2.7 billion. Net revenue of CHF22.4 billion for 2020 was flat year-on-year, while total operating expenses of CHF17.8 billion were up 2%, driven by litigation provisions and restructuring expenses. The results include a CHF88 million pretax loss made in the three months to the end of 2020, with net revenue coming in at CHF5.2 billion, down 16% year-on-year. "Looking forward into 2021 and beyond, we aim to further accelerate growth in Wealth Management and deliver sustainable returns in Investment Banking," said Chief Executive Thomas Gottstein.
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UK lender Barclays resumed payouts to investors as it said it delivered a resilient performance in 2020 against challenges posed by the coronavirus pandemic. For 2020, Barclays posted total income of GBP21.77 billion, up 1% from GBP21.63 billion in 2019, but net interest income fell 14% to GBP8.12 billion from GBP9.41 billion. Barclays booked GBP4.84 billion in credit impairments in 2020, more than doubled from GBP1.91 billion in 2019. Pretax profit sank 30% to GBP3.07 billion from GBP4.36 billion. However, the figure beat company-compiled consensus which forecast pretax profit of GBP2.81 billion. The Corporate & Investment Bank unit's income was GBP12.5 billion, with both Markets and Banking achieving "their best ever income performance", the lender said. Barclays declared a dividend of 1.0 pence for 2020, down from 3.0p in 2019.
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Australia & New Zealand Banking Group reported a sharp increase in profit for its first financial quarter, with "record home loan volumes in New Zealand". The Melbourne, Australia-headquartered banking and financial services company announced a AUD1.62 billion - or USD1.26 billion - profit after tax for the three months ended December 31, its first financial quarter. This represents a 59% increase from the average of the last two quarters of 2020, which was AUD1.02 billion. Cash profit from continuing operations was AUD1.81 billion, up 54% from AUD1.17 billion for the last two quarters of 2020. Profit before credit impairment and tax dipped, however, to AUD2.44 billion from AUD2.52 billion. Chief Executive Shayne Elliott noted that all ANZ Bank's major businesses performed well in the quarter, achieving "market share gains in our key home loan market in Australia as well as record home loan volumes in New Zealand".
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Australia's Wesfarmers raised its interim payout and posted a profit rise after its retail units "delivered strong trading results". The showing at its Chemicals, Energy and Fertilisers arm was "solid", Managing Director Rob Scott said. Wesfarmers posted revenue of AUD17.77 billion, about USD13.78 billion, in the six months to December 31, up 17% annually from AUD15.25 billion. Net profit rose 25% to AUD1.41 billion from AUD1.13 billion. Its payout was boosted by 17% to 88 cents per share from 75 cents.
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Australia's government said Facebook was "heavy-handed" and "wrong" for introducing an unprecedented local ban on sharing news in response to pending legislation that would force the social media giant to pay for content. Treasurer Josh Frydenberg said the US firm gave no notice it would revoke users' ability to post links to news articles or view the Facebook pages of news outlets from anywhere in the world. "Facebook was wrong. Facebook's actions were unnecessary, they were heavy-handed, and they will damage its reputation here in Australia," he said. The surprise move early Thursday came as retaliation for laws proposed in Canberra that would force social media giants to pay for Australian news content shared on their sites. Frydenberg said the government remained "absolutely committed" to implementing its plan, which passed the House of Representatives late Wednesday and is now before the Senate
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Woodside Petroleum reports 2020 net loss after tax of USD4.03 billion, hit by previously announced non-cash impairments and onerous contract provision. This compares to a profit of USD343 million for 2019. Operating revenue USD3.60 billion for the year, down 26% on 2019. Earnings before interest, taxes, depreciation and amortisation falls 46% to USD1.92 billion from USD3.53 billion. Woodside Chief Executive Peter Coleman says production topped 100 million barrels of oil equivalent for the first time in the company's history. "Strong production outcomes were delivered even though we weathered a direct hit from tropical cyclone Damien in February, followed by operational challenges posed by the pandemic," he says. Declares final dividend of 12 US cents per share, bringing full-year payout to 38 cents, down 58% on the year before.
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Royal Dutch Shell said it has sealed a deal to seal Duvernay shale light oil assets in Canada to Crescent Point Energy. Toronto-listed Crescent will pay USD707 million for the assets, USD550 million in cash and USD157 million worth of shares in the company. "Divesting these assets underpins Shell's effort to focus the Upstream portfolio to deliver cash," said Shell Upstream Director Wael Sawan.
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MARKETS
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Stocks markets were lower around the world on Thursday amid concern that a revival in inflation might hold back economic recovery. "Upward moves in yields is likely to spark speculation about higher interest rates – something that central banks don't even want to think about for the foreseeable future," commented David Madden of CMC Markets. A string of dire-to-unimpressive annual earnings reports did nothing to improve the investment mood. Airbus shares were down 3.6% in Paris, while Barclays was off 3.3% in London.
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CAC 40: down 0.3% at 5,745.99
DAX 30: down 0.1% at 13,896.63
FTSE 100: down 0.8% at 6,655.21
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DJIA: called down 0.2%
Nasdaq Composite: called down 0.6%
S&P 500: called down 0.3%
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S&P/ASX 200: closed marginally higher at 6,885.90
Hang Seng: closed down 1.6% at 30,595.27
Nikkei 225: closed down 0.2% at 30,236.09
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EUR: firm at USD1.2065 (USD1.2036)
GBP: up at USD1.3926 (USD1.3845)
USD: soft at JPY105.75 (JPY105.82)
GOLD: higher at USD1,784.15 per ounce (USD1,774.53)
OIL (Brent): higher at USD64.50 a barrel (USD63.53)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The pandemic continues to pose risks to the US economy, but medium-term prospects have brightened, minutes from the Federal Reserve's January meeting showed. The economy is "still far" from the Fed's goals, the minutes released on Wednesday showed, and it is likely to take "some time" before further progress towards the central bank's employment and inflation targets is achieved. The Fed noted that the pace of economic recovery had moderated in recent months, and the path ahead will depend significantly on the course of the virus and vaccine roll-out. "Members agreed that the pandemic continued to pose considerable risks to the outlook. Nonetheless, in light of the expected progress on vaccinations and the change in the outlook for fiscal policy, the medium-term prospects for the economy had improved enough that members decided that the reference in previous post-meeting statements to risks to the economic outlook over the medium term was no longer warranted," the minutes read.
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US lawmakers open a hearing Thursday seeking answers on the recent stock market frenzy that caused dizzying moves in the value of little-known shares and prompted calls for tougher Wall Street regulations. The House Financial Services Committee was to hear from witnesses playing a role in the volatility affecting video game retailer GameStop and other companies in recent weeks. The hearing, "Game Stopped? Who Wins and Loses When Short Sellers, Social Media, & Retail Investors Collide" includes testimony from the head of online bulletin board Reddit, which hosted chat rooms which promoted the so-called "meme stocks" and of the trading platform Robinhood, which allowed small investors to join the frenzy. The unprecedented volatility – with moves of up to 400% in one week for GameStop – prompted calls for regulators to review the role of social media, hedge funds and trading platforms which may manipulate the market.
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UK Prime Minister Boris Johnson is awaiting new data on the impact of vaccines on coronavirus after stressing he will take a "cautious and prudent approach" to easing England's third national lockdown, PA reports. Johnson is understood to be expecting evidence on the impact of the UK's jabs programme on hospital admissions and deaths by the end of Friday, ahead of setting out his "road map" next week. But it was unclear whether the early data would include the impact on transmission, with the results of two key Public Health England studies potentially not ready until next month. Meanwhile, major research showed lockdown measures were significantly driving down infection levels across the nation, but that they remained high and at similar levels to those observed in late September. Imperial College London's React study, which tested more than 85,000 people in England between February 4 and 13, suggested infections had dropped to just one in 200 people. The study suggested infections were halving every 15 days, and the R number – which expresses how many people the average infected individual spreads the virus to – is at 0.72.
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The UK government has conceded that some "non-tariff trading barriers" have emerged due to the post-Brexit trade deal with the EU. Prime Minister Johnson insisted that there would be no such barriers as he detailed his deal brokered with Brussels, which came into force when the transition period ended on December 31. But on Thursday the government acknowledged some had emerged as well as "supply-chain challenges". Labour said ministers were admitting "what has been clear for weeks" and urged them to reduce the bureaucracy to prevent costs being driven up for British exporters. The admission came in a government "overseas business risk" document, giving businesses guidance on trading with Ireland. "Some supply-chain challenges and non-tariff trading barriers have also emerged during the transition to UK-EU Trade and Cooperation Agreement terms in early 2021. Respected sources forecast that the consumer price index may increase by up to 2% as a result," it read.
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Italian Prime Minister Mario Draghi pledged to use "all means" to fight the coronavirus pandemic that has devastated the country, and said it presented an opportunity for the country to rebuild as it did after World War II. In his first speech since taking office, the former European Central Bank chief listed the pandemic as his top priority of a long list of issues requiring urgent attention. "The government will carry out reforms but will also tackle the emergency," he told the Senate, the upper house of parliament, where he has almost unanimous support for his new government of national unity. The 73-year-old, parachuted in after the previous centre-left government collapsed, has been dubbed "Super Mario" since promising to do "whatever it takes" to save the euro during the 2012 debt crisis. On Wednesday he promised to fight "with all means" the pandemic that has left more than 94,000 Italians dead and sparked a deep recession, with the economy contracting almost nine percent last year.
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Switzerland's trade surplus grew at the start of 2021, according to figures from the Federal Customs Administration. Month-on-month, Switzerland's trade surplus was 16% higher in January, at CHF3.58 billion, about USD3.98 billion, from CHF3.10 billion. Imports were 3.3% higher at CHF15.28 billion from CHF14.79 billion in December. Exports grew at a faster pace, by 5.4%, to CHF18.86 billion from CHF17.90 billion.
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Australia's jobs market continued its recovery from Covid-19 in January, though month-on-month employment growth was smaller than expected. Monthly, the number of employed people rose by 29,100, 0.2%. However, a stronger rise of 40,000 was expected according to FXStreet-cited consensus. Annually, employment figures were 0.4% lower in January, faring slightly better than December's 0.5% fall. The unemployment rate ticked down to 6.4% from 6.6% in December.
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