LONDON (Reuters) -Sanctions-hit Alrosa kept diamond sales in the first half of 2023 at the year-ago levels, the Russian company said on Monday as it reported financial results for the first time since Moscow’s 2022 invasion of Ukraine.

Efforts to reduce Russia’s revenue from diamond exports and to build on Washington’s existing sanctions on Alrosa, the world’s largest producer, have been subject to discussions among leaders of the Group of Seven (G7) nations.

Alrosa’s first-half revenue totalled 188.2 billion roubles ($1.9 billion), up 0.2% from January-June 2022, and up 3.5% from the same period of 2021. Net profit fell 35% year-on-year to 55.6 billion roubles.

“As of mid-2023, opportunistic diamond midstream participants have developed trade mechanisms to circumvent the impact of the restrictions, especially as it pertains to the trading of Russian diamonds in U.S. dollars,” diamond analyst Paul Zimnisky said.

In April 2022, the United States cut Alrosa off from its banking system and banned direct sales to the lucrative U.S. market. The European Union bought 1.4 billion euros ($1.5 billion) worth of Russian diamonds in 2022 as it has neither banned Russian diamond imports nor Alrosa.

As of now, once the Russian diamonds are cut and polished outside of Russia, they are considered originating from the nation that “transformed” them, Zimnisky added.

While some G7 countries have called for Russian diamond sanctions, others, including Belgium, have been concerned that they would divert trading to other centres and away from Antwerp, the world’s No. 1 one hub.

The G7 said in May it would continue working to restrict Russian diamonds trade, including through tracing technologies.

Zimnisky expects G7 to prepare a plan which would impact the global flow of Russian diamonds by late 2023 or early 2024.

“The diamond industry has had time to digest all of this, so while I do not expect a pending supply shock, I do see the way that the diamond supply chain works to be fundamentally transformed in the medium term,” he said.

($1 = 100.3300 roubles)

($1 = 0.9151 euros)

(Reporting by Polina Devitt; editing by Jason Neely, Tomasz Janowski and Richard Chang)

(Reuters) – The British audit firm Crowe UK, an executive and top auditor have agreed to pay nearly $800,000 to settle charges they falsely claimed to have properly audited a business that went public despite having little to no revenue, Wall Street’s top regulator announced on Monday.

The settled charges against the London-based audit firm, Crowe CEO Nigel Bostock, and senior auditor Matthew Stallabrass were announced nearly two years after the Securities and Exchange Commission reached a $38.8 million settlement with the purported music streaming business Akazoo, which allegedly defrauded investors out of tens of millions of dollars.

Following the audit, Akazoo went public through a merger with a special purpose acquisition company (SPAC) in 2019, with financial statements falsely claiming $120 million in revenue for the prior year.

Crowe, Bostock and Stallabrass neither admitted nor denied the charges, according to the SEC. A lawyer representing the three referred queries to the company, which said it was pleased to have resolved the matter.

“Audit quality and its continuous improvement remain a key priority for the firm,” the company said in a statement.

According to the SEC, Crowe falsely claimed its staff were qualified to conduct an audit according to standards set by the U.S. Public Company Accounting Oversight Board and failed to exercise appropriate skepticism when presented with fabricated documents, among other failings.

Crowe has agreed to withdraw its PCAOB registration while Bostock and Stallabrass have agreed to be suspended from appearing before the SEC as accountants for minimum periods of five and two years, respectively, the SEC said.

(Reporting by Douglas Gillison; Editing by Paul Simao)

By Toby Sterling and Bart H. Meijer

AMSTERDAM (Reuters) -Exor NV, the investment arm of Italy’s Agnelli family, has become the top investor in Philips by buying 15% of the healthcare technology group for about 2.6 billion euros ($2.8 billion), the companies said.

The deal is a welcome vote of confidence in the Dutch company, which is in the late stages of a huge product recall that began in 2021 and that knocked two thirds off its share price.

Philips shares rose 4.4% to 19.30 euros, while Exor dipped 0.3% to 81.22 euros. Philips fits two of the three sectors Exor targets in its investment strategy – healthcare and technology. The third sector is luxury.

Exor purchased its stake on the open market and may later raise it to up to 20%.

Under a relationship agreement with Philips, it will take a seat on the company’s supervisory board. Once proposed, Exor’s representative will attend meetings as an observer until they formally join the board, a person close to Exor said.

While not an activist investor, Exor aims to play an active role in supporting Philips’ strategy, the source said.

“Exor’s substantial investment underlines their confidence in Philips’ transformation into a healthcare technology company and its growth and value potential,” Philips Chairman Feike Sijbesma said in a statement.

Philips executives told a media call that Exor had been researching a possible investment since last year but the share purchases, which trigger disclosure requirements under Euronext rules, came together in only several days with the assistance of an unnamed investment bank.

Exor, led by John Elkann, 47, the leading figure among Italy’s Agnelli clan, still has some 2 billion euros left to invest after taking holdings in French healthcare group Institut Merieux and Italian hospital manager Lifenet.

Italy’s most prominent business family also owns a stake in luxury shoemaker Christian Louboutin.

New York-born Elkann chairs car companies Stellantis and Ferrari, both in Exor’s portfolio with other investments such as The Economist magazine and Italian soccer club Juventus.

ING analysts said Exor’s investments currently focus on listed firms because they are “more interesting from a valuation perspective” than private markets, where values have not yet caught up with “reality.”

Philips shares have rallied by 35% this year to close at 18.50 euros on Friday. That compares with more than 60 euros per share before the recall.

“On top of being a med-tech company, Philips is also perceived as a value stock, having been impacted by the Respironics recall saga,” ING said.

Philips has taken a 575 million euro provision for lawsuits related to the recall, and CEO Roy Jakobs said on Monday that Exor has not received any information beyond what has been made public about its ongoing talks with the U.S. Department of Justice over a settlement.

Philips last month reported core profit of 453 million euros and slightly upgraded financial targets for the full year.

($1 = 0.9147 euros)

(Reporting by Toby Sterling in Amsterdam and Valentina Za in Milan; Editing by Kim Coghill, David Goodman, Susan Fenton and Jan Harvey)

MILAN (Reuters) -Italian Prime Minister Giorgia Meloni on Monday took “full responsibility” for last week’s shock decision to impose a one-off bank tax that has been blamed for causing lasting damage to her government’s credibility with financial markets.

In comments to Italian newspapers Corriere della Sera, la Repubblica and La Stampa, Meloni said the 40% levy had no punitive intent.

“I would do it again. Because I believe that the right things must be done…This is a decision that I took (on my own)”, she was quoted as saying by la Repubblica.

“It’s a sensitive issue and I take full responsibility for it.”

In a drive to shore up its political base, Italy’s conservative government unveiled the surprise decision late last Monday, only to backtrack in part by clarifying there was a cap on proceeds 24 hours later – and after having changed the threshold to apply the tax in the meantime.

The new tax targets a rise in profits banks have derived from higher rates.

Sources told Reuters when the measure was announced the Treasury expected to draw less than 3 billion euros ($3.3 billion) from the tax. However, prior to the clarification on the cap, calculations pointed to much higher sums.

With Economy Minister Giancarlo Giorgetti noticeably absent from the press conference to announce the tax, Meloni said he had been informed about the decision.

However, other government members had been kept in the dark because of the sensitivity of the matter, she said.

The government had toyed with the idea of taxing banks’ record profits from higher rates but appeared to have set it aside, and Rome’s muddled communication over the issue has caused alarm among international investors.

Asked about a veto posed by junior coalition partner Forza Italian on a potential alliance with France’s Marie Le Pen at next year’s EU parliamentary elections, she said it was too early to discuss any such moves.

“I don’t veto anyone, I don’t feel I have the authority to do that and in any case it’s premature”, she said.

(Reporting by Claudia Cristoferi; editing by Federico Maccioni, Valentina Za and Bernadette Baum)

(Reuters) – (This August 11 story has been corrected to clarify that the name on the website, Air Canada Pilots Association (ACPA), is no longer used as the group merged with ALPA and changes the name of the union in paragraph 5)

Air Canada reported a better-than-expected quarterly profit on Friday compared with a year-ago loss and sees solid passenger bookings into early 2024 as the country’s largest airline cashes in on strong international travel demand.

A rush by North American travelers to make up for lost time during the pandemic has bolstered earnings for legacy carriers, with international destinations enjoying especially high demand.

But North American carriers face pressure from higher labor costs, with pilots at U.S. legacy carriers nabbing steep pay increases in new contracts or tentative agreements.

Air Canada pilots anticipate sitting down for labor talks with the carrier in the next couple of weeks, a union official said. Their contract expires at the end of September.

Charlene Hudy, chair of a union group representing Air Canada pilots, said some of the Canadian airline’s pilots earn up to 300% less than their U.S. counterparts, depending on categories like seniority and type of aircraft.

“We have to be in the same ballpark as our American colleagues,” Hudy said in an interview.

Air Canada raised the lower end of its earlier 2023 guidance of C$3.5 billion to C$4 billion for earnings before interest, taxes, depreciation and amortization (EBITDA) to C$3.75 billion.

Chief Executive Mike Rousseau said advanced passenger bookings remain solid for the balance of 2023 and into the first quarter of 2024.

Montreal-based Air Canada said it expects to grow available seat mile capacity for 2023 by 21% compared with a year earlier.

The carrier wants to fly more American passengers on non-direct international routes through stops at its Canadian hubs. So-called sixth freedom revenues, generated from carrying passengers from a second country to a third via a stop in a local hub, were the strongest in the second quarter that Air Canada has ever achieved, the carrier said.

For the quarter ended June 30, Air Canada reported adjusted net income of C$664 million ($493.97 million), or C$1.85 per diluted share. Analysts on average had expected adjusted net income of C$289.8 million or 68 Canadian cents a share according to data from Refinitiv.

For 2023, the carrier is now expecting costs per available seat mile (CASM) of about 0.5% to 1.5% above 2022 levels. In May, Air Canada said it expected CASM of about 0.5% to 2.5% below 2022 levels.

(Reporting by Shivansh Tiwary and Priyamvada C in Bengaluru and Allison Lampert in Montreal; Editing by Devika Syamnath, Frances Kerry, Elaine Hardcastle and Jonathan Oatis)

By Shashwat Chauhan

(Reuters) -European shares closed higher on Monday, rebounding from a near one-week low, as gains in retail and healthcare outpaced the fall in miners and energy, both bruised by concerns over China’s embattled property sector.

The pan-European STOXX 600 closed the day 0.2% higher, bouncing back from a more than 1% decline on Friday.

The healthcare sector gained 0.3%, with Philips jumping 4.4% after Dutch investment firm Exor NV took a 15% stake in the company. Exor dipped 0.3%.

The retail sector index was the top gainer, up 0.8%, with B&M European Retail gaining 3% following a Deutsche Bank price target raise.

However, miners and energy stocks led losses tracking lower crude oil and base metal prices on deteriorating demand outlook in top consumer China, reinforced by debt problems in its property sector.

Reuters reported Country Garden is seeking to delay payment on a private onshore bond for the first time after suspending trading in 11 onshore bonds.

The European basic resources index ended 1.5% lower, touching an over 10-month low intraday, while the energy sector closed 0.8% down.

Other China-exposed sectors like luxury lost 0.1%, while lenders Prudential, HSBC Holdings and Standard Chartered shed between 0.5% and 0.7%.

“The China story’s negative for European markets, especially for the more export-oriented ones such as Germany, as China is seen as the key export market,” said Andrea Cicione, head of research at GlobalData.TSLombard.

“We might be nearing the point where the bad news stops having an effect and maybe the government provides the kind of response that the market feels comfortable with… However, we don’t expect a large-scale stimulus.”

The benchmark STOXX 600 has come off its over one-year highs hit last month as ballooning growth concerns in China and sharp movements in bond yields have pressured equities.

Commodity-heavy European bourses also lagged, with UK’s FTSE 100 and Norway’s Oslo SE All-Share Index falling 0.2% and 0.3%, respectively.

Geopolitical issues also dented investor sentiment after a Russian warship fired warning shots on a cargo ship in the Black Sea over the weekend, with Ukraine condemning the move and calling for decisive countermeasures by the international community.

Economic data due this week include a flash estimate of euro-zone second-quarter GDP, fresh euro-zone inflation and British consumer prices.

Among individual movers, German dialysis specialist Fresenius Medical Care (FMC) dropped 5.1% to the bottom of the STOXX 600 following a UBS downgrade to “sell” from “neutral”.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Janane Venkatraman, Saumyadeb Chakrabarty and Nick Macfie)