(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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International Consolidated Airlines swung to a huge loss for 2020, as it flew just 34% of 2019's passenger capacity last year. Current plans for the first quarter of 2021 is for capacity of 20% of 2019 levels, IAG said, but this remains "uncertain and subject to review". Total revenue for 2020 slumped 69% to EUR7.81 billion, while IAG swung to a hefty pretax loss of EUR7.81 billion from a EUR2.28 billion profit in 2019. The parent of British Airways, Iberia and Aer Lingus turned to an operating loss of EUR7.43 billion from a EUR2.61 billion profit. Before exceptional items, the operating result was a EUR4.37 billion loss, slightly better than the EUR4.45 billion loss forecast by analysts, but swung from a EUR3.29 billion profit in 2019. "Our results reflect the serious impact that Covid-19 has had on our business. We have taken effective action to preserve cash, boost liquidity and reduce our cost base," said Chief Executive Luis Gallego, adding: "We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction." Given the uncertainty over Covid-19, IAG said it is not providing profit guidance for 2021.
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Property portal Rightmove reported a fall in revenue for 2020 as it offered a discount to customers from April to September. Revenue fell 29% to GBP205.7 million, with pretax profit falling to GBP134.8 million from GBP213.6 million. The company noted that market closures in the first half of the year prompted it to offer support to its Agency and New Homes customers, initially with a 75% discount from April to July, followed by 60% and 40% for Agency customers in August and September. Since housing markets have reopened around the UK, the recovery in home moving activity has been "strong". Chief Executive Peter Brooks-Johnson added that strong activity has continued into 2021 and the company recorded its busiest January ever for traffic. Rightmove declared a final dividend of 4.5 pence, having cancelled 2019's 4.4p final dividend. The final dividend is the only payout Rightmove will make for 2020, versus a total payout of 2.8p for 2019, though it added that it has approved the resumption of its share buyback programme in March 2021.
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RSA Insurance reported "record" underwriting results as it prepares to be acquired and divided up by Intact and Tryg. Total income for 2020 amounted to GBP6.55 billion, down from GBP6.90 billion the year before, while pretax profit edged down to GBP483 million from GBP492 million, which the company chalked up to "market impacts" from Covid-19, bid costs, exits and restructuring. Underlying pretax profit rose 15% to GBP718 million. The insurer reported a 36% increase in underwriting profit to GBP550 million. Chief Executive Stephen Hester said: "We have built a high performing company and 2020's results showcase the value creation thereby achieved. This in turn drove the 52% premium we were able to negotiate in Q4 through an all cash bid from Intact and Tryg. The offer is on track to complete in the coming months, ending a chapter for RSA but not the whole story..." Back in November, RSA Insurance agreed to be sold in a deal with Canada's Intact Financial and Denmark's Tryg that valued the insurer at GBP7.2 billion.
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Deutsche Telekom said it expects its earnings to grow further going forward after strong final quarter of 2020. The Bonn, Germany-based telecommunications company said net revenue in 2020 rose 25% when compared to the prior year to EUR100.99 billion, including 29% growth recorded in the final quarter of 2020 to EUR27.62 billion. Net profit, meanwhile, rose by 7.5% year-on-year in 2020 to EUR4.16 billion after more than doubling in the fourth quarter to EUR1.67 billion from EUR654 million. Adjusted earnings before interest, tax, depreciation, amortization, restructuring and lease-related expenses rose by 42% to EUR35.02 billion in 2020. Free cash flow adjusted for restructuring and lease-related expenses amounted to EUR6.3 billion. Deutsche Telekom noted that it has exceeded its guidance for the year, achieving this despite the negative effects of the coronavirus pandemic, which included lower roaming revenue due to travel restrictions, shop closures, and impeded business with corporate customers.
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Engie swung to loss in 2020 as the French utility said the pandemic shaved more than EUR1 billion from its operating income, but it expects a return to profit in 2021. For 2020, the French electricity utility posted a net loss of EUR1.5 million, compared to income of EUR1.0 billion in 2019, as revenue declined 7.2% to EUR55.8 billion from EUR60.1 billion. Earnings before interest, taxes, depreciation and amortization fell 11% to EUR9.3 billion from EUR10.4 billion.
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LafargeHolcim reported a sharp drop in income in 2020 as the building materials firm struggled with sales as the pandemic forced construction delays around the world. For 2020, the French-Swiss building materials manufacturer's net income tumbled 24% to CHF1.70 billion from CHF2.25 billion in 2019. St Gallen, Switzerland-headquartered LafargeHolcim saw its net sales drop 13% to CHF23.14 billion from CHF26.72 billion. In the fourth quarter, net sales dropped 8.1% to CHF5.99 billion from CHF6.52 billion.
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Salesforce.com delivered a rise in fourth-quarter earnings amid increased demand for its cloud-based software, which prompted a guidance upgrade. For the fourth quarter ended January 31, revenue came in at USD5.82 billion, up from USD4.85 in the fourth quarter of financial 2020, with gross profit of USD4.34 billion, up from USD3.63 billion. The company swung to a positive net income of USD267 million in the fourth quarter, having posted a net loss of USD248 million the year before, with basic earnings per share of USD0.29, flat from USD0.28.
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The US aviation regulator announced Thursday it fined Boeing a total of USD6.6 million, for a series of lapses in its regulatory and safety obligations. Most of the penalties were imposed for failing to live up to a 2015 deal to "improve and prioritize regulatory compliance." "Boeing failed to meet all of its obligations under the settlement agreement," FAA Administrator Steve Dickson said. "I have reiterated to Boeing's leadership time and again that the company must prioritize safety and regulatory compliance, and that the FAA will always put safety first in all its decisions," Dickson said.
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Twitter plans to offer a subscription service in which users would pay for special content from high-profile accounts, part of an economic model to diversify its revenue. The globally popular social media platform announced the potential new Super Follows service at its annual investor meeting, as it searches for new revenue streams beyond targeted advertising. "Exploring audience funding opportunities like Super Follows will allow creators and publishers to be directly supported by their audience and will incentivize them to continue creating content that their audience loves," a Twitter spokesperson told AFP.
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MARKETS
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Stock markets in Asia and Europe on Friday followed the tumble on Wall Street, as technology stocks in particular suffered from concerns about rising inflation and the prospect of eventual interest rate hikes to combat it. The tech-heavy Nasdaq Composite closed down 3.5% on Thursday and was pointed for a slightly lower open on Friday. Meanwhile, the dollar continued to benefit from the risk-off mood, sending the pound below USD1.39 from well above USD1.41 just a day before.
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CAC 40: down 0.6% at 5,752.19
DAX 30: down 0.3% at 13,833.83
FTSE 100: down 1.0% at 6,582.46
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DJIA: called down 0.2%
S&P 500: called up 0.75 of a point
Nasdaq Composite: called down 0.2%
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S&P/ASX 200: closed down 2.4% at 6,673.30
Hang Seng: closed down 3.6% at 28,980.21
Nikkei 225: closed down 4.0% at 28,966.01
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EUR: down at USD1.2118 (USD1.2230)
GBP: down at USD1.3891 (USD1.4130)
USD: up at JPY106.43 (JPY106.22)
GOLD: down at USD1,764.56 per ounce (USD1,778.65)
OIL (Brent): down at USD66.53 a barrel (USD66.90)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The US carried out an air strike against infrastructure used by Iranian-backed militant groups in eastern Syria, which a monitoring group said has killed 22 militants. The Britain-based Syrian Observatory for Human Rights on Friday said the 22 Iraqis are part of pro-Iranian militant groups. The strikes targeted three trucks of ammunition that were being moved from Iraq through an area near al-Qaim crossing into Syria's Deir al-Zour province, the monitor said. The Observatory, which has been documenting violence in Syria since 2011, said the militants killed were members of the Kait'ib Hezbollah and Hashd al-Shaabi militia groups. Medical sources, speaking to dpa, put the death toll at 19. They added that 22 others were injured, and that Hashd al-Shaabi took them back to Iraq. US President Joe Biden ordered the strike "in response to recent attacks against American and Coalition personnel in Iraq, and to ongoing threats to those personnel," the Pentagon said on Thursday.
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The US on Thursday hailed progress in turning around its troubled Covid-19 vaccine rollout, and the EU said it was also on track to meet jab targets as global coronavirus deaths topped 2.5 million. Brazil hit 250,000 fatalities – the second-highest national death toll after the US – while the worldwide vaccine campaign received the royal endorsement of Queen Elizabeth II who urged people not to be wary of the injection. President Biden declared the US rollout is now "weeks ahead of schedule" as he celebrated 50 million vaccines administered since he took office on January 20, but he warned Americans to keep masking up. "We're moving in the right direction despite the mess we inherited," Biden said, referring to the program under his predecessor Donald Trump. The US is the world's hardest-hit country, with coronavirus deaths crossing the 500,000 mark earlier this week. Biden said that there would be "enough supply" for all adult Americans by the end of July. The EU announced Thursday it expected to vaccinate 70% of adults by the end of the summer, after months of problems and friction.
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A key US Senate official ruled Thursday that Biden's USD15 per hour minimum wage measure cannot be included in the huge Covid relief bill as written, imperiling Democratic efforts to fulfill a progressive priority. The Senate parliamentarian told lawmakers that the minimum wage language is not eligible to be in the USD1.9 trillion coronavirus package if Democrats seek to pass it through a filibuster-proof bill. The process, known as reconciliation, allows lawmakers to pass a budget-related bill with just a simple 51-vote majority in the 100-member chamber, rather than the 60 votes normally required for major legislation. Republicans in the evenly split Senate are largely opposed to the relief package, meaning Democrats would need to shelve the national minimum wage hike to USD15 an hour from USD7.25 if they want any chance at passing the Covid aid. "President Biden is disappointed in this outcome, as he proposed having the USD15 minimum wage as part of the American Rescue Plan," White House press secretary Jen Psaki said in a statement. "He urges Congress to move quickly to pass the (bill), which includes USD1400 rescue checks for most Americans" and other funding to help control and eliminate the pandemic.
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Japan's industrial production rose 4.2% in January from the previous month for the first rise in three months, the government said on Friday. The reading was almost in line with the median forecast of a 4% increase by analysts surveyed by the Nikkei Business Daily, and came after a 1% fall in December. Manufacturers expect industrial production to climb 2.1% in February and then fall 6.1% in March, a survey conducted by the Ministry of Economy, Trade and Industry showed. The index of industrial shipments grew 3.2% in January from the previous month to 95.8 against a 2015 baseline of 100 and that of industrial inventories edged down 0.2% to 95.1, the ministry said. Tokyo and nine other prefectures have been under a coronavirus state of emergency since early January amid a resurgence of infections.
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