Ferrari says going is tough in the Middle East

Ferrari earlier revealed that shipments to the Middle East declined by 16 percent in 2016 compared with 2014. (Reuters)
Updated 01 February 2018
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Ferrari says going is tough in the Middle East

LONDON: Italian sports car-maker Ferrari says profits last year rose 34 percent, driven by a surge in V12 sales and vehicle personalization.
But the news from the Middle East was less than rosy. Ferrari revealed on Thursday that shipments to the region “recorded a decrease due to a reallocation triggered by tough market conditions.”
In earlier commentaries, Ferrari had disclosed that Middle Eastern shipments were down 16 percent in 2016 compared to 2014. The Italian sports auto company said the ME spanned KSA, Oman, UAE, Bahrain, Kuwait, Lebanon and Qatar.
Ferrari reported 2017 net profit of €537 million ($669 million), up from €400 million the previous year. Shipments last year rose by 5 percent to 8,398 vehicles, while net revenues increased 10 percent to €3.4 billion.
Ferrari said it is targeting 9,000 vehicles shipments this year and is forecasting revenues above €3.4 billion.
The carmaker said fourth-quarter profits rose by a quarter to €136 million on a 1 percent increase in revenues to €840 million. Shipments rose 4 percent to 2,017.
Sales were flat only in China, Taiwan and Hong Kong, due to a decision to terminate the Hong Kong distributor in 2016 and the new dealership not becoming fully operational until the third quarter of 2017.
Ferrari said sales in France, Italy and UK grew at double-digit pace, while Germany recorded mid-single-digit growth. Americas increased by 4.6 percent with South Korea, Singapore and Indonesia up about 12 percent.
George Galliers, an analyst with Evercore ISI in London, said in a note: “With increasing management appetite for volume growth, we see room for Ferrari volumes to grow about 76 percent between 2016 and 2025.
“Whether volumes do grow to this extent will depend on product execution. To deliver substantial volume growth, we believe Ferrari will need to introduce new model lines. This is not a risk-free exercise. New model lines can be a challenge, particularly for a brand as associated with high performance as Ferrari.”
Galliers also said that while not unsuccessful, per se, the broker felt that Ferrari’s longer-range GT cars have failed to attract the same level of demand as its sports-car models.
This would need to change, he said, suggesting that Ferrari should look to its archives and, particularly, the 1950s and 1960s, “when it produced a wide variety of vehicles with broad appeal which shared similar underpinnings and the fabled ‘250’ and ‘275’ engines.”


New Zealand to conduct own assessment of Huawei equipment risk

Updated 18 February 2019
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New Zealand to conduct own assessment of Huawei equipment risk

  • Huawei faces intense scrutiny in the West over its relationship with the Chinese government
  • Several Western countries had restricted Huawei’s access to their markets

WELLINGTON: New Zealand will independently assess the risk of using China’s Huawei Technologies in 5G networks, Prime Minister Jacinda Ardern said on Monday after a report suggested that British precautions could be used by other nations.
Huawei, the world’s biggest producer of telecoms equipment, faces intense scrutiny in the West over its relationship with the Chinese government and US-led allegations that its equipment could be used by Beijing for spying.
No evidence has been produced publicly and the firm has repeatedly denied the allegations, which have led several Western countries to restrict Huawei’s access to their markets.
The Financial Times reported on Sunday that the British government had decided it can mitigate the risks arising from the use of Huawei equipment in 5G networks. It said Britain’s conclusion would “carry great weight” with European leaders and other nations could use similar precautions.
New Zealand’s intelligence agency in November rejected an initial request from telecommunications services provider Spark to use 5G equipment provided by Huawei.
At the time, the Government Communications Security Bureau (GCSB) gave Spark options to mitigate national security concerns over the use of Huawei equipment, Ardern said on Monday.
“The ball is now in their court,” she told a weekly news conference.
Ardern said New Zealand, which is a member of the Five Eyes intelligence sharing network that includes the United Kingdom and the United States, would conduct its own assessment.
“I would expect the GCSB to apply with our legislation and our own security assessments. It is fair to say Five Eyes, of course, share information but we make our own independent decisions,” she said.
Huawei New Zealand did not immediately respond to a request for comment. Spark said it was in discussions with GCSB officials.
“We are working through what possible mitigations we might be able to provide to address the concerns raised by the GCSB and have not yet made any decision on whether or when we should submit a revised proposal to GCSB,” Spark spokesman Andrew Pirie said in an emailed statement.
The Huawei decision, along with the government’s tougher stance on China’s growing influence in the Pacific, has some politicians and foreign policy analysts worried about potential strained ties with a key trading partner.
Ardern’s planned first visit to Beijing has faced scheduling issues, and China last week postponed a major tourism campaign in New Zealand days before its launch.
Ardern said her government’s relationship with China was strong despite some complex issues.
“Visits are not a measure of the health of a relationship they are only one small part of it,” she said, adding that trade and tourism ties remained strong.