Morocco boycott slows sales growth at Danone

Morocco boycott slows sales growth at Danone
A man shops in a supermarket where Danone yogurts are displayed in Shanghai. (AFP)
Updated 17 October 2018

Morocco boycott slows sales growth at Danone

Morocco boycott slows sales growth at Danone
  • Seeks to rebuild consumer trust in Morocco
  • Sales growth shows slowdown

PARIS: Slacker demand for baby food in China and a consumer boycott in Morocco slowed third-quarter sales growth at Danone, although the French food group said it was sticking to its earnings growth targets.
Danone said it was banking on cost savings and a push into lucrative, healthy eating trends to meet those goals, despite lower sales of infant formula in China and the broad boycott in Morocco launched earlier this year on social media against what protesters said were unfair prices set by large companies.
Chief Financial Officer Cecile Cabanis cautioned the slowdown in China would last several quarters while the Moroccan boycott would weigh on the second half of the year.
Danone, the world’s largest yoghurt maker with brands including Actimel and Activia, said third-quarter sales reached $7.1 billion, a like-for-like increase of 1.4 percent — slightly above analysts’ forecasts for 1.2 percent growth.
Nevertheless, this marked a slowdown from 3.3 percent growth in the second quarter and 4.9 percent in the first quarter, and Danone shares fell 2.8 percent in early trading.
“The main miss is on Specialized Nutrition where infant milk formula is down 20 percent in China in Q3 ... We were not expecting such a drop” said Oddo analyst Pierre Tegner.
Danone, however, kept its annual financial targets.
Growth had accelerated at its dairy and plant-based business in North America, where Danone is integrating organic food group WhiteWave, and its European dairy division was on the road toward stabilization, it said.
Danone, which is targeting an operating margin above 16 percent and like-for-like sales growth of 4-5 percent by 2020, reiterated its expectation for a double-digit rise in 2018 underlying earnings per share (EPS), excluding the impact of the sale of a stake in Japan’s Yakult.
Sales of Danone’s ‘Early Life Nutrition’ products in China fell 20 percent in the third quarter following a period of strong growth and amid signs of changes in market dynamics.
The sales of the China-focused infant formula products had grown by around 30 percent in the second quarter of 2018 and by over 50 percent in the third-quarter 2017.
In China, where Danone competes in the baby food market with Nestle and Reckitt Benckiser, there has been strong demand for baby formula products thanks to a sharp rise in birth rates tied to the end of China’s one-child policy, and the emergence of new cities and an affluent middle class.
The peak in birth rates, however, happened in 2016 and started slowing down in late 2017, leading Danone to caution that the Chinese market will progressively show more normal trends from the second half of 2018 onwards.
Danone’s indirect E-commerce infant formula sales had also benefited last year from China’s decision to delay regulation of cross-border e-commerce, which led to stocking up by traders.
Cabanis said that although there were fewer births in China, Danone continued to benefit from demand for its ultra-premium infant formula products such as Nutrilon and Aptamil.
Morocco, which counts for 2 percent of group sales, was another weak spot as a result of the consumer boycott.
In September, Danone announced measures in Morocco to regain consumers’ trust, including price cuts, but sales in Morocco were still down 35 percent in the third quarter.


Oil prices rise over 1 percent as fresh virus curbs threaten demand recovery


Oil prices rise over 1 percent as fresh virus curbs threaten demand recovery

Updated 06 August 2021

Oil prices rise over 1 percent as fresh virus curbs threaten demand recovery


Oil prices rise over 1 percent as fresh virus curbs threaten demand recovery


LONDON: Oil prices rose about 1 percent on Thursday on increasing Middle East tensions, but fresh movement restrictions imposed by countries to counter a surge in COVID-19 cases threatened the demand recovery.

Brent crude oil futures rose 78 cents, or 1.1 percent, to $71.16 a barrel, after earlier dipping below $70 for the first time since July 21.

US West Texas Intermediate (WTI) crude futures traded 80 cents, or 1.2 percent, higher at $68.95 a barrel.

The growing regional tensions come as nuclear talks between Iran and Western powers that would ease sanctions on Tehran’s oil exports appear to have stalled.

“With tensions brewing among Iran and world powers over last week’s drone attack, it seems nuclear deal talks will be lengthy and unlikely to provide imminent sanction relief for Iran,” said Edward Moya, senior analyst at OANDA.

Offsetting the geopolitical tensions, concerns over the recovery of global oil demand grew amid a surge in coronavirus cases.

Both benchmarks fell for a third day in a row to a two-week low on Wednesday, partly due to the spread of the coronavirus delta variant.

Japan is poised to expand emergency restrictions to more prefectures while China, the world’s second-largest oil consumer, has imposed curbs in some cities and canceled flights, threatening fuel demand.

“China is now facing its most challenging COVID-19 crisis since the initial outbreak was brought under control,” analysts at consultancy FGE said in a note on Thursday.

In the US, the world’s biggest oil consumer, COVID-19 cases hit a six-month high with more than 100,000 infections reported on Wednesday, according to a Reuters tally.

Analysts at investment bank UBS, however, said they expect oil prices to resume their upward trend despite pandemic concerns, projecting Brent crude will trade between $75 and $80 per barrel in the second half of 2021.


Saudi Ports Authority records 
growth in activities in first half of 2021

Saudi Ports Authority records 
growth in activities in first half of 2021
Updated 06 August 2021

Saudi Ports Authority records 
growth in activities in first half of 2021

Saudi Ports Authority records 
growth in activities in first half of 2021

RIYADH: The Saudi Ports Authority (Mawani) announced on Thursday that all areas of its activities had seen growth during the first half of 2021.

The announcement reflects the Kingdom’s economic recovery from the COVID-19 pandemic.

In terms of containers, Mawani handled 3.6 million TEU (a measure of volume equivalent to a 20-foot cargo container) during the first half of the year — a jump of 5.18 percent year-on-year. Transshipment containers increased by 24.49 percent to 1.4 million TEU, while it handled a total of 138 million tons of cargo.

The number of passengers grew by 0.61 percent year-on-year to 288,000, and Mawani handled 429,000 imported cars.

BACKGROUND

In July, Saudi Ports Authority announced investment opportunities in partnership with the private sector to develop and operate multipurpose terminals in eight of the nation’s ports.

The authority also recorded an increase in the number of ships received at the Kingdom’s ports, which received 6,037 vessels — an increase of 6.6 percent over the same period last year.

Mawani launched four shipping lines in 2020 to help increase Saudi ports’ connectivity with their international counterparts.

In July, the authority announced investment opportunities in partnership with the private sector to develop and operate multipurpose terminals in eight of the nation’s ports, in line with the objectives of Saudi Vision 2030, which include making the Kingdom a leading global logistics platform and connecting hub.

The build-operate-transfer (BOT) contracts on offer are for terminals in Jeddah Islamic Port, King Abdulaziz Port in Dammam, Ras Al-Khair Port, Jizan Port, Yanbu Commercial Port, King Fahad Industrial Port in Jubail, King Fahad Industrial Port in Yanbu, and Jubail Commercial Port.

One of the goals of Saudi Vision 2030 is for transport and logistics to contribute 10 percent of the country’s GDP by that date, up from its current 6 percent, following the implementation of the Kingdom’s new strategy for the sector.

 


Pent-up travel demand helps Lufthansa halve losses


Pent-up travel demand helps Lufthansa halve losses

Updated 05 August 2021

Pent-up travel demand helps Lufthansa halve losses


Pent-up travel demand helps Lufthansa halve losses


FRANKFURT: German airline Lufthansa said on Thursday it halved its losses in the second quarter compared to a year ago, as travel restrictions eased over the coronavirus pandemic and passengers returned.

Europe’s largest airline group said its net loss between April and June came in at €756 million ($890 million) compared with 1.5 billion euros last year, when travel worldwide was halted by COVID-19.

Increased bookings saw the company record a positive cash flow in the second quarter for the first time since the start of the health crisis.

“We have been able to stop the outflow of funds in the current phase of reviving our business and generate a positive cash flow for the first time since the beginning of the pandemic,” said CEO Carsten Spohr.

“In June alone, the number of bookings was more than twice as high as at the beginning of the quarter,” the company said.

Lufthansa said it still expected to operate at 40 percent of its pre-crisis capacity this year, leaving its projection unchanged.

Flight capacity will increase to 50 percent in the third quarter, on the back of continued recovery in demand in Europe, increased business travel and the opening up of further markets, such as North America.

Following an announcement from the US that the country would begin to allow vaccinated foreigners to travel to the country at some point, Spohr said in a conference call that Lufthansa was planning on the change to be implemented at the “end of September.”

In terms of the risk posed to the business by the spread of the more-infectious delta variant, Spohr said that the progress of the vaccination campaign was “more important” for the sector.

As a result, Lufthansa expects to book positive operating, or underlying, profit later this year on its path back into the black.

Earnings before interest, tax, depreciation and amortization (EBITDA), a yardstick closely watched by analysts, was still severely negative in the second quarter, with the company registering a loss of about €400 million in the second quarter.

Lufthansa, which also includes Austrian, Swiss and Brussels Airlines, was saved from bankruptcy last June by a German government bailout.

Lufthansa’s chief financial officer Remco Steenbergen said the company was discussing with investors about how to raise the capital needed to pay down the state aid the group received, and said the final figure would be “significantly less” than the €3 billion to €4 billion previously mooted.

The company is in the throes of a painful restructuring to slash costs that will include thousands of job cuts, with 30,000 already axed since the start of the pandemic.

As part of the recovery plan, the airline will slash its current fleet of 800 aircraft to 650 by 2023.


JP Morgan launches bitcoin fund; Uruguay mulls letting businesses accept cryptos

JP Morgan launches bitcoin fund; Uruguay mulls letting businesses accept cryptos
Updated 05 August 2021

JP Morgan launches bitcoin fund; Uruguay mulls letting businesses accept cryptos

JP Morgan launches bitcoin fund; Uruguay mulls letting businesses accept cryptos

DUBAI, RIYADH: The second-largest cryptocurrency after bitcoin, Ethereum, recorded gains early on Thursday as investors anticipate a major upgrade that is aimed to improve and optimize the digital currency.

Its price was up by around 8 percent over the last 24 hours, according to Forbes.

Ether traded at $2,687.71 at 5 p.m. Riyadh time on Thursday, according to data from Coindesk.

Bitcoin traded lower, falling by 2.78  percent to $38,035.85.

In other developments, a report by Pymnts and Bitpay showed consumers in the US are increasingly interested in using cryptocurrencies for their payments.

“The report analyzes a census-balanced survey of 8,008 US consumers who were current and former cryptocurrency owners and cryptocurrency nonowners between Feb. 8 and Feb. 23, 2021,” the report said, cited by Bitcoin.com.

It found that 93 percent of crypto users would consider making purchases using cryptocurrency, while 59 percent of non-crypto owners said they are interested in using it for their purchases in the future.

In Europe, French asset manager Melanion Capital received regulatory approval to launch an exchange-traded fund (ETF) tracking bitcoin price for investors across the region.

Another act to regulate the industry is from a senator in Uruguay who introduced a bill to allow businesses to accept cryptocurrencies as payments.

The bill will provide “legal, financial and fiscal security in the business derived from the production and commercialization” of crypto, CoinDesk has reported.

JP Morgan has launched an in-house bitcoin fund, and has begun pitching it to private bank clients.

Google’s new ad policy for financial products and services has gone into effect – and it allows some crypto ads.

In the East, Hong Kong is seeing a rise in crypto-related crimes, according to Bitcoin.com, with authorities saying it could be due to the increasing popularity of crypto investments.

But in China, a global leader in the crypto scene, these crimes have decreased significantly in recent years.


Saudi Maaden shifts to profitability in the second quarter, year-on-year

Saudi Maaden shifts to profitability in the second quarter, year-on-year
Updated 05 August 2021

Saudi Maaden shifts to profitability in the second quarter, year-on-year

Saudi Maaden shifts to profitability in the second quarter, year-on-year

RIYADH: The Saudi Arabian Mining Co. (Maaden) turned in profits after zakat and tax, at about SR1.1 billion ($2.94 billion) in the second quarter of 2021, compared to losses of about SR434.15 million in the second quarter of 2020, the company announced in a statement on the Saudi Stock Market (Tadawul).

Maaden’s profits increased by 45.1 percent in the second quarter of 2021, compared to profits of about SR761.15 million in the first quarter, while revenues rose by 11.95 percent to SR6.1 billion.

The company attributed its shift to profitability year-on-year to the increase in the average prices achieved for all products except industrial minerals, despite the decrease in the quantities sold of gold, ammonia and alumina.

Profitability was also due to the increase in net profit attributable to Maaden’s stake in joint ventures and the increase in other revenues, despite the decrease in income from term deposits.