Peugeot maker PSA’s car revenue returns to growth after lockdowns

Peugeot maker PSA’s car revenue returns to growth after lockdowns
Employees assemble a battery pack for electric cars on an assembly line at the PSA Peugeot Citroen plant in Trnava, Slovakia. (File/AFP)
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Updated 28 October 2020

Peugeot maker PSA’s car revenue returns to growth after lockdowns

Peugeot maker PSA’s car revenue returns to growth after lockdowns
  • PSA has performed better than some rivals after dealerships swung back into action in France

FRANKFURT: Peugeot manufacturer PSA Group returned to revenue growth in its core autos division in the third quarter, recovering from a slump during coronavirus lockdowns, though the prospect of new restrictions hit French shares on Wednesday.

PSA has performed better than some rivals after dealerships swung back into action in France and elsewhere from June, a potential boost ahead of its merger with Fiat Chrysler Automobiles (FCA), due to close early next year.

But a resurgence in the COVID-19 pandemic is clouding prospects for the coming months, and France is bracing for a possible renewed month-long lockdown.

PSA shares were dragged 3.6 percent lower, even though the Peugeot and Citroen maker beat quarterly expectations on revenue by a wide margin, analysts at Jefferies said.

PSA’s overall sales totaled €15.5 billion ($18.3 billion) in July-September, down 0.8 percent from a year earlier. But automotive revenue rose 1.2 percent to €12 billion, after ending the first half of the year down 35.5 percent.

Financial chief Philippe de Rovira said September had ended on a strong note with a good order book, adding PSA planned to nudge up production in the fourth quarter versus a year earlier.

Car inventories were 25 percent lower year-on-year in the third quarter, as PSA tries to avoid getting stuck with excess stock.

Bar any unexpected COVID-19 measures, the group would likely generate positive cash flow at yearend, De Rovira added, while the group kept its target for an adjusted operating margin for its automotive division of more than 4.5 percent for 2019-2021.

Under CEO Carlos Tavares, PSA has focused increasingly on its more expensive and profitable models — a model PSA’s French rival Renault is trying to emulate as part of its turnaround plan.

PSA’s car sales volumes fell in the third quarter, but this was offset by the popularity of higher priced models. New launches such as the SUV-style Peugeot 2008 helped, it said.

The group’s $38 billion merger with FCA, set to create the world’s fourth largest carmaker under the name “Stellantis,” is due to close in the first quarter of 2021.

The companies are set to win EU approval for the merger, sources told Reuters this week.

De Rovira declined to say whether PSA and FCA would speed up their merger if a decision came this year.

The companies have pressed on with one more step in the process, after their boards agreed PSA could sell up to a 7 percent stake in car parts maker Faurecia.

The proceeds will be distributed to Stellantis shareholders in cash, alongside a distribution-in-kind of PSA’s remaining Faurecia stake — a move aimed at avoiding antitrust opposition that might have arisen if Stellantis controlled Faurecia.


Saudi Arabia doesn't want oil prices to cripple global economy, finance minister tells CNBC

Saudi Arabia doesn't want oil prices to cripple global economy, finance minister tells CNBC
Updated 12 sec ago

Saudi Arabia doesn't want oil prices to cripple global economy, finance minister tells CNBC

Saudi Arabia doesn't want oil prices to cripple global economy, finance minister tells CNBC

RIYADH: Saudi Arabia doesn't want high oil prices that will cripple global economy recovery, but the Kingdom has no say on what prices are as they are determined by the market, finance minister Mohammed Al Jadaan told CNBC in an interview.

"I think we need to see a price that is good for investors, good for producers so that they can continue investing because the world needs the energy, and does not actually impact negatively the world's recovery particularly in a time like this," he told the American TV channel.


PayPal in $45bn bid for Pinterest: Reuters

PayPal in $45bn bid for Pinterest: Reuters
Updated 20 October 2021

PayPal in $45bn bid for Pinterest: Reuters

PayPal in $45bn bid for Pinterest: Reuters

NEW YORK: PayPal Holdings Inc. has offered to buy digital pinboard site Pinterest Inc. for $45 billion, people familiar with the matter said on Wednesday, a combination that could herald more tie-ups between financial technology and social media companies in e-commerce.

The deal talks come as internet shoppers increasingly buy items they see on social media, often following “influencers” on platforms such as Instagram and TikTok. Buying Pinterest would allow PayPal to capture more of that e-commerce growth and diversify its income though advertising revenue.

PayPal has offered $70 per share, mostly in stock, for Pinterest, one of the sources said. 

The online payments provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on Nov. 8, the source added.

The sources cautioned that no deal was certain and terms could change. They asked not to be identified because the matter is confidential.

PayPal and Pinterest did not respond to requests for comment. Bloomberg News first reported on the PayPal-Pinterest talks on Wednesday.

PayPal’s offer represents a 26 percent premium to Pinterest’s closing price of $55.58 on Tuesday. PayPal’s shares fell over 4 percent on the news, while Pinterest rose more than 14 percent to $63.51.


Oil rallies as US crude stocks decline in tight market: Energy market wrap

Oil rallies as US crude stocks decline in tight market: Energy market wrap
Updated 20 October 2021

Oil rallies as US crude stocks decline in tight market: Energy market wrap

Oil rallies as US crude stocks decline in tight market: Energy market wrap

RIYADH: Oil prices rose on Wednesday after US crude inventories at the nation’s largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.

Brent crude futures settled at $85.82 a barrel, a gain of 0.9 percent or 74 cents and the highest since October 2018.

November US West Texas Intermediate crude, which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1 percent. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.

Crude prices have risen as supply has tightened, with the Organization of the Petroleum Exporting Countries maintaining a slow increase in supply rather than intervening to add more barrels to the market, and as US demand has ramped up.

Globally, refiners have been boosting output thanks to high margins, one that can only be restrained by maintenance. US refining capacity use dropped in the most recent week, but analysts noted that supply may continue to tighten if US refiners also pick up processing again.

Emissions cut

Anglo-Australian miner Rio Tinto announced a $7.5 billion plan to reduce carbon emissions by 50 percent by 2030 and forward its target of 2025 for a 15 percent reduction in emissions from 2018 levels.

LNG deals

China has agreed to three huge liquefied natural gas deals with US exporter Venture Global LNG.

According to documents posted on the US department of energy website, the agreements with China’s state oil giant Sinopec include two 20-year deals for a combined 4 million tons of LNG per year.

Germany’s oil imports

German crude oil import volumes fell 7.1 percent from January to August and related lockdowns hit the industry, official data showed on Wednesday.

Oil volumes in Jan-Aug fell to 51.9 million tons from 55.8 million in the same months of 2020, statistics from the BAFA foreign trade office showed.

Forecast 

Crude oil prices could reach $100 per barrel in the first or second quarter of next year as global inventories are at their lowest level, the Iraqi oil minister said.


Sipchem records highest profits in its history, shares skyrocket

Sipchem records highest profits in its history, shares skyrocket
Updated 20 October 2021

Sipchem records highest profits in its history, shares skyrocket

Sipchem records highest profits in its history, shares skyrocket
  • The company posted a net profit of SR1.029 billion for the third quarter of 2021.
  • It also achieved a net profit after zakat and tax of about SR1.24 billion in the first half of 2021.

RIYADH: Shares of Sahara International Petrochemical Co. “Sipchem” on Wednesday hit the highest level since debut on the Saudi stock market. Share of the petrochemical company closed at SR46.95 ($12.2). 

Nearly 15.4 million shares were traded during the market session. The company posted a net profit of SR1.029 billion for the third quarter of 2021, the highest profit since its establishment. 

In a statement, the company attributed the reason for the rise in shares price to high selling prices of all the company’s products, which it said contributed to the increase in profit margins despite pressures from the rise in the prices of raw materials such as butane, ethanol, ethylene and propane.

On a quarterly basis, the company’s profits rose by about 24 percent, compared to the profits of the previous quarter, which amounted to SR829.9 million.

The company also achieved a net profit after zakat and tax of about SR1.24 billion in the first half of 2021, compared to losses of about SR151.8 million in the same period of 2020.

Sipchem CEO Abdullah Al-Saadoon told CNBC Arabia that he expected demand for the company’s products to remain strong in the fourth quarter of the year and the first three months of 2022.

Sipchem’s strong marketing plan helped buoy its third quarter earnings, he said. 

The company has  strong presence in the European and Asian markets, through Sipchem Europe and Sipchem Asia. It markets more than 70 percent of its products to end consumers.

Al-Saadoon said the company seeks to reduce its debt since the beginning of the year. It reduced its leverage by almost 12 percent to reach 40 percent of capital, he added.

 

 


Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap
Updated 20 October 2021

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

RIYADH: The Tadawul All Share Index increased on Wednesday by 0.94 percent, or 111.2 points.

Oil prices and the announcement of $2 trillion in government spending contributed to the rise in stocks.

TASI liquidity today amounted to about SR7.2 billion, while 189.8 million shares were traded, in 313,000 deals. 

National Gypsum Co. (NGC) topped the list of companies trading above three month average at 344, followed by Sahara International Petrochemical Co. (Sepchem) at 295.

The petrochemical producer posted a net profit of SR1.029 billion for the third quarter of 2021, the highest profit since inception.

Saudi Arabia’s parallel stock market index, Nomu, gained 81.7 points, or 0.34 percent, closing at 24,449.96 points. 

The biggest risers today were, Al-Rajhi Bank which records the highest level since 2006 to close at SR141.2, up 1.6 percent, and SABIC shares by 2 percent at SR133.6.

Among other shares that rose were NCB by 0.6 percent, and Riyad Bank by 4.4 percent.