Nokia expects strong 2022 as supply crunch eases

Nokia expects strong 2022 as supply crunch eases
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Updated 11 January 2022

Nokia expects strong 2022 as supply crunch eases

Nokia expects strong 2022 as supply crunch eases
  • Nokia now expects Q4 revenue of 6.4 billion euros

Finnish telecoms giant Nokia performed better than expected last year and foresees further growth in 2022 as a supply chain crunch and inflation are set to ease, the network equipment maker said Tuesday.


The announcement follows a string of quarterly earnings surprises for the network equipment maker, which last October managed to boost its third quarter profits despite a worldwide shortage of computer chips.


The group largely met expectations with 22.2 billion euros ($25.2 billion) in net sales last year.


But it raised its 2021 operating margin guidance to between 12.4 percent and 12.6 percent, up from 10 percent to 12 percent.


The boost was related to venture fund investments, a one-off software contract in the second quarter, “bad debt provision reversals and some other one-time benefits,” the company said in a statement.


Nokia now expects an operating margin ranging between 11 percent and 13.5 percent in 2022, citing “estimated continued improvements in the underlying business, supply constraints and cost inflation.”


Nokia chief executive Pekka Lundmark said last year that the company expects to see a gradual improvement in 2022, though it was not “100 percent” guaranteed.


Lundmark has been credited with turning around the fortunes of the network giant, which has been flagging in the race with Sweden's Ericsson and China's Huawei in the 5G network equipment market.


After taking the helm in mid-2020, Lundmark implemented widespread job cuts, with savings funnelled into developing more competitive technology.


The group has also partly benefitted from the misfortunes of rival Ericsson, whose China market share collapsed when Beijing retaliated against Sweden for banning Huawei from its 5G network rollout.

 

Finnish telecoms equipment maker Nokia on Tuesday said it expected to exceed its 2021 earnings guidance, with its venture fund investments driving the boost.


Nokia estimated a full-year 2021 comparable operating margin of 12.4-12.6 percent, above its previous guidance of 10-12 percent, and net sales of 21.7-22.7 billion euros — within its previously announced range.


The company said its underlying business performed largely as expected in the fourth quarter.


“However, other operating income was higher than expected including further benefits from venture fund investments, leading to a stronger comparable operating margin exceeding the 2021 guidance,” it said in a statement.


Nokia now expects Q4 revenue of 6.4 billion euros, below expectations of 6.5 billion euros, according to Reuters calculations.


The company is due to report full-year results on Feb. 3.


For 2022, Nokia said it expected a comparable operating margin of 11-13.5 percent. 


Gold demand hits highest level in more than two years

Gold demand hits highest level in more than two years
Updated 22 sec ago

Gold demand hits highest level in more than two years

Gold demand hits highest level in more than two years

Rising inflation and the post-pandemic economic uncertainty has sent demand for gold to a two year high, according to the World Gold Council.

The organisation’s latest report shows the appetite for the metal  reached 1,147 tonnes in the last three months of 2021, its highest level since the second quarter of 2019 and an increase of almost 50 percent year-on-year.

Gold bar and coin demand rose 31 percent to an eight-year high of 1,180 tonnes, while the  jewellery sector rebounded to match 2019’s pre-pandemic total of 2,124 tonnes.

For the twelfth consecutive year, central banks were net purchasers of gold, adding 463 tonnes to their holdings — 82 percent higher than 2020. 

Central banks from both emerging and developed markets added to their gold reserves, lifting the global total to a near 30-year high.

Louise Street, a senior analyst at the World Gold Council, said: “On the investment side, the tug of war between persistent inflation and rising rates created a mixed picture for demand. Increasing rates fuelled a risk-on appetite among some investors, reflected in ETF (exchange-traded fund) outflows. 

“On the other hand, a search for safe haven assets led to a rise in gold bar and coin purchases, buoyed by central bank buying.

“Declines in ETFs were offset by demand growth in other sectors. Jewellery reached its highest level in nearly a decade as key markets like China and India regained economic vibrancy.”

Street added that the World Gold Council is expecting demand to fluctuate in 2022, with how central banks deal with persistent high levels of inflation a key factor affecting the sector.

Likewise, the jewellery market’s strength could be hampered if new COVID variants once again restrict consumer access.

 


Alturki migrating recently-bought US drilling firm to Dhahran

Alturki migrating recently-bought US drilling firm to Dhahran
Updated 28 January 2022

Alturki migrating recently-bought US drilling firm to Dhahran

Alturki migrating recently-bought US drilling firm to Dhahran

DAMMAM: Investment firm Alturki Holding is shifting the base of a US drilling firm it recently acquired to Dhahran, according to the head of the company.

Speaking to Arab News, Alturki’s CEO Rami Alturki said the move was related to Newsco International Energy Services, which it snapped up in October 2021 for an undisclosed amount. 

The comments came on the sideline of the Saudi Aramco hosted In-Kingdom Total Value Add forum, held in Dhahran.

Referring to Newsco, Alturki said: “We are in the process of migrating the company to be based here in Dhahran.” 

Alturki also commented on another of his firm’s subsidiaries, Sawafi Borets, which was awarded a contract to create a $50 million facility in King Salman Energy Park, or SPARK, to assemble electrical submersible pumps.

“We're also very involved on the construction side, building facilities for Aramco across the Kingdom,” he added. 


Iraqi ‘super app’ Baly raises $10.5m in funding round

Iraqi ‘super app’ Baly raises $10.5m in funding round
Updated 40 min 12 sec ago

Iraqi ‘super app’ Baly raises $10.5m in funding round

Iraqi ‘super app’ Baly raises $10.5m in funding round

RIYADH: Iraq’s first super app Baly raised an historic $10.5 million in its latest funding round — the most ever for a tech startup in the country. 

Baly launched ride-hailing as its first service in Baghdad last month, and already boasts thousands of rides each day, according to a press release. 

Additional services, like food and grocery delivery, will go live in the next few weeks, and Baly will expand to cover more cities in the country.

The startup will be able to use the new funds to support its scaling efforts in operations and market growth, the company said.

Baly Managing Director Matteo Mantovani said: “Iraq is home to 40 million people, with over 90 percent smartphone penetration amongst those aged 17-40. 

“With a young, urbanized population, it is the perfect place to revolutionize the economy through digital services.

Arnd Lodowicks, chief financial officer of investor Rocket Internet, said: “Baly is for us a world-class team in an extremely exciting and promising market. We are looking forward to supporting  the company on its mission to become the leading super app of Iraq.”

Venture capital funding in Iraq reached record highs in 2021, despite the political and socio-economic challenges in the region, according to Baly.

It crossed the $5 million mark over five deals in 2021, recording a 170 percent year-on-year jump in VC funding.

Kingsway Capital, MSA Capital, Global Founders Capital, Vostok Ventures, Majid Al Futtaim, and March Holding all participated in the funding round for Baly.


HP wins fraud case against UK tech tycoon Mike Lynch

HP wins fraud case against UK tech tycoon Mike Lynch
Updated 28 January 2022

HP wins fraud case against UK tech tycoon Mike Lynch

HP wins fraud case against UK tech tycoon Mike Lynch

LONDON: Hewlett-Packard won the majority of its civil case against British tech tycoon Mike Lynch over its acquisition of Autonomy in 2011, a London judge said on Friday, though damages will be considerably less than the $5 billion claimed.
The court’s decision comes on the same day as Britain has to decide whether or not to extradite Lynch to the United States after almost a decade of bitter wrangling over who was to blame for the failure of Hewlett-Packard’s $11 billion takeover of Lynch’s Autonomy.
HP had sued Lynch, arguing that he had fraudulently inflated the value of Autonomy before he sold it to the US tech giant. Lynch had argued that HP mismanaged the acquisition.
High Court Justice Robert Hildyard said HP had substantially succeeded in their case but the damages would be less than they were demanding.
Lynch faces separate criminal charges in the US, including wire fraud and securities fraud.
A year after acquiring Autonomy, HP threw out the architect of the deal which was supposed to help transform the computer and printer maker, one of Silicon Valley’s original companies, into a more profitable group centered on business software and services.
It wrote down the value of Autonomy by $8.8 billion and sought damages of around $5 billion from Lynch and his colleague Sushovan Hussain, alleging they inflated the value of Autonomy before selling it. Hussain was convicted in the United States in 2019.
Lynch has denied all the allegations.
Lynch is due to hear on Friday whether Britain’s interior minister Priti Patel has approved the extradition request to the United States.
A court has given Patel until midnight on Friday to make a decision, although Lynch could appeal any ruling that goes against him. The US charges carry a maximum term of 20 years imprisonment.
Lynch is one of Britain’s leading tech bosses. He founded Autonomy which was capable of searching and organizing unstructured information, such as telephone conversations.
The 56-year-old’s doctoral thesis remains one of the most consulted at Cambridge University and his success, including the around $800 million he made from his stake in Autonomy, elevated his position in Britain, giving him a place on government advisory boards.
Lynch was also central to the creation of DarkTrace , a cybersecurity firm that listed on the stock market last year. Lynch and his wife Angela Bacares own nearly 16 percent of DarkTrace, according to Refinitiv


Global stocks head for worst January since 2008 financial crisis

Global stocks head for worst January since 2008 financial crisis
Updated 28 January 2022

Global stocks head for worst January since 2008 financial crisis

Global stocks head for worst January since 2008 financial crisis
  • MSCI’s 50-country main world index is now down over 8.1 percent for the month

LONDON: European stocks fell heavily again on Friday as worries about a sudden halt to central bank stimulus and rising tensions between Western powers and Moscow drove one of the worst ever starts to a year for world stock markets.
Strong earnings from Apple provided some encouragement for battered tech and US markets, but traders were struggling to draw a line under a global selloff that has now firmly taken root.
The pan-European STOXX 600 tumbled 1.5 percent in morning trading, on course for its fourth straight weekly drop, while US futures were pointing to more crimson screens on Wall Street later too..
MSCI’s 50-country main world index is now down over 8.1 percent for the month, which will be its worst January since the 2008 global financial crisis year.
The dollar, meanwhile, is on track for its best week in seven months on bets that US interest rates could now go up as many as five times this year.
“With the Federal Reserve sounding a lot more hawkish, it has shaken the markets,” said Jeremy Gatto, a multi-asset portfolio manager at Unigestion in Switzerland.
“Markets can live with rate hikes, but the main question remains around the balance sheet,” he added. Markets have been driven up by all the stimulus pumped in during the COVID-19 crisis, “so if it starts reducing liquidity, that changes the game.”
The Fed indicated this week that it is likely to raise rates in March, as widely expected, and reaffirmed plans to end its pandemic-era bond purchases that month before launching a significant reduction in its asset holdings.
The prospect of faster or larger US interest rate hikes, and possible stimulus withdrawal, lifted the dollar to a 20-month high of $1.1119 per euro and to 115.50 yen — close to a high of year so far of 116.35 yen.
In the big government bond markets that drive global borrowing costs, benchmark 10-year US Treasury yields rose to 1.84 percent compared with their US close of 1.80 percent on Thursday. The two-year yield, which is even more sensitive to rate hike expectations, touched 1.22 percent, having started the year at roughly 0.75 percent.
European bond yields also rose further. Germany’s 10-year yield, the benchmark for the euro zone, was up over half a bp to -0.02 percent although still not quite able to break through the zero threshold.
Focus was also on Italy, where bond yields were back up around 4 bps after a late afternoon rally on Thursday while its parliament struggled to elect a new president.

OIL PRESSURE
Oil prices remained strong, set for their sixth weekly gain, amid concerns of tight supplies as major producers continue their policy of limited output increases amid rising fuel demand.
Brent crude futures climbed 57 cents, or 0.6 percent, to $89.91 a barrel, just shy of the $91.04 hit earlier in the week that was the highest level since October 2014.
A sixth week of gains will also mark the longest weekly winning streak for Brent since October last year, when Brent prices climbed for seven weeks while US WTI gained for nine.
This year, prices have risen about 15 percent amid geopolitical tensions between Russia, the world’s second-largest oil producer and a key natural gas provider to Europe, and the West over Ukraine, as well as threats to the United Arab Emirates from Yemen’s Houthi movement that have raised concerns about energy supply.
“Where Brent crosses the $90 level, we see some selling from a sense of accomplishment, but investors start buying again when the prices fall a little as they remain cautious about possible supply disruptions due to rising geopolitical tensions,” said Tatsufumi Okoshi, senior economist at Nomura Securities.
“The market expects supply will stay tight as the OPEC+ is seen to keep the existing policy of gradual increase in production,” he said.
The market is focusing on a Feb. 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+. It is likely to stick with a planned rise in its oil output target for March, several sources in the group told Reuters.