PARIS – Most unions at U.S. e-commerce giant Amazon’s French arm rejected the company’s 2022 pay proposal on the final day of talks, but no immediate industrial action is planned, union representatives said.

A group unions had proposed a 5% pay increase to compensate for a sharp rise in inflation in France. The company, meanwhile, offered a 3.5% general increase from June 1, with only the CFE-CGC management union accepting the terms, union sources said.

“In any other year this would have been a good proposal but, since December, inflation is rocketing, with energy, food and other prices going up sharply,” said Jean-Francois Berot, a representative of the SUD union.

Union sources said there could be some employee action in the coming days or weeks, but no strikes have been planned so far.

A statement from Amazon said that its proposal was better than the 2-2.5% median wage increases at big companies this year. It also said that salaries for Amazon France staff have risen by more than 5.6% over the past 12 months, which it said corresponded to increases to the French minimum wage over that period.

“We are pleased to confirm Amazon’s competitive wage increase proposal, which we believe is fair for our employees and will now be implemented in our eight fulfilment centres, including other financial measures,” it said.

A company spokeswoman said that the 3.5% increase will be on top of existing benefits such as free shares and contributions to transport costs.

“The company had threatened to lower its offer to 3% if there was no deal by Tuesday, but in the end Amazon stuck with the 3.5% offer. The proposal will pass, but without (majority) union approval,” said CFDT union member Morgane Boulard.

In April all of Amazon’s eight logistics centres in France were hit by staff walkouts tied to a dispute over pay.

Amazon said it employs close to 15,500 staff on permanent contracts in France and plans to create 3,000 more permanent positions this year.

(Reporting by GV De Clercq; Editing by David Gregorio and David Goodman)

By Emma-Victoria Farr and Krystal Hu

LONDON – German software firm SAP is working with investment bank Moelis & Co to sell its corporate learning software business Litmos as it seeks to streamline its operations and focus on cloud-based revenue, three sources told Reuters. The sale of California-based Litmos, which is profitable, could fetch a valuation of more than $1 billion, said the sources, who requested anonymity because the matter is private.

Moelis is expected to start an auction process in the coming weeks and will mainly target tech-focused private equity funds in the United States and Europe, two of the sources said. Representatives at SAP and Moelis declined to comment.

SAP bought Litmos as part of its acquisition of U.S. cloud software firm Callidus for $2.4 billion in 2018, rebranding the platform SAP Litmos.

The business provides learning platforms to corporate clients to develop sales and customer service, and is used by more than 30 million people in 150 countries, according to its website.

The sources said Litmos overlaps with SAP SuccessFactors, a learning platform in the human experience management suite SAP promotes. While both are cloud-based solutions, Litmos is compatible with a variety of HR systems such as ADP and BambooHR, while SAP SuccessFactors is focused on training users to use its own platform.

SAP’s Chief Finance Officer Luka Mucic told reporters on a recent call that SAP wants to streamline its operations – including divestments – in order to focus on growth drivers.

Moelis helped SAP with a previous disposal in 2020 when the German software giant sold Digital Interconnect (SDI) to Swedish cloud communications firm Sinch for about $250 million.

SAP listed its experience management software business Qualtrics in the United States last year, remaining its majority owner.

CEO Christian Klein is reviewing SAP’s portfolio with the intention of moving towards subscription-driven services and increasing cloud-based revenue.

(Reporting by Emma-Victoria Farr and Krystal Hu, additional reporting by Nadine Schimroszik, editing by Pamela Barbaglia, Jason Neely, Alexandra Hudson)

By Toby Sterling

AMSTERDAM – Universal Music Group (UMG) reported better than expected first quarter sales on Tuesday, driven by 20% growth in subscription and streaming revenue.

UMG, the largest of the big three record labels ahead of Warner and Sony Music, expects a continuation of the boom in music streaming that was led by Spotify and revived the industry’s fortunes in the late 2010s.

A statement from CEO Lucian Grainge said the quarter was remarkable for UMG’s strength across artists, geographical regions, and formats.

UMG represents stars and collects royalties for artists such as Taylor Swift, Billie Eilish and Korean pop stars BTS.

“Top sellers for the quarter included releases from Disney’s ‘Encanto’ soundtrack, King & Prince, The Weeknd, Fujii Kaze and Ado,” the company said.

First-quarter revenue rose 22% year on year, or 16.5% at constant currencies, to 2.2 billion euros ($2.3 billion), with streaming income up 25% and subscription income up 18.3%, offsetting falls in downloads.

Core profit, meanwhile, was in line with expectations, rising to 455 million euros from 396 million euros, as margins dipped slightly.

In addition to subscription revenue from Spotify and Apple Music, UMG has struck revenue-sharing deals with ad-supported social media platforms such as TikTok and YouTube for their use of its artists’ music, though terms are not public.

UMG was spun out of France’s Vivendi last September in the largest European stock market listing of 2021, with shares initially surging from 18.50 euros to 25 euros. They have since retreated and are down about 9.5% in 2022, closing at 22.21 euros on Tuesday.

In March, the company declined to give a specific forecast for 2022, saying it would have a “strong” year that would be in line with a mid-term target of double-digit revenue growth.

($1 = 0.9494 euros)

(Reporting by Toby Sterling; Editing by Jason Neely and David Goodman)

By Jody Godoy

(Reuters) – The U.S. Securities Exchange Commission is investigating Didi Global Inc over its $4.4 billion initial public offering in the United States in June last year, the Chinese ride-hailing giant said.

Didi was cooperating with the U.S. securities regulator’s investigation related to the offering, “subject to strict compliance” with Chinese law, the company said in its annual filing on Monday.

“We cannot predict the timing, outcome or consequences of such an investigation,” Didi added.

The company did not provide further details about the nature of the investigation.

A spokesperson for the company did not immediately respond to a request for comment on Tuesday. An SEC spokesperson said the agency does not comment on possible investigations.

The IPO came under scrutiny by Chinese authorities last summer over data privacy concerns. Chinese regulators had urged the firm to put its listing on hold while a cybersecurity review of its data practices was conducted, sources have told Reuters.

Days after it went ahead, the country’s powerful cyberspace watchdog ordered app stores to remove 25 mobile apps operated by Didi and told the company to stop registering new users, citing national security and the public interest.

Didi subsequently announced in December that it would delist its American Depositary Shares from the New York Stock Exchange (NYSE) and pursue a listing in Hong Kong.

Didi shareholders will vote on May 23 on its plans to delist those ADRs.

(Reporting by Jody Godoy in New York; Editing by Bernadette Baum)

By Arunima Kumar

(Reuters) – U.S. refiner Marathon Petroleum on Tuesday posted a first-quarter profit above Wall Street estimates buoyed by strong refining margins, as demand for fuel and refined products recovered to near pre-pandemic levels amid tight supplies.

Shares of the company rose 3.8% to $92.48.

Global fuel demand has recovered, while Western sanctions on Russia following its invasion of Ukraine have tightened crude oil supplies worldwide.

“Year-over-year, demand trends have been, for the most part, positive and the market seems to have reached a post-COVID point of stability,” Chief Executive Officer Michael Hennigan said on a post-earnings call.

The company expects the U.S. refining system running at higher utilization rates in the coming quarters to meet rising demand.

Overall product supplied, a proxy for demand, stood at 19.8 million barrels per day (bpd) in the fourth week of April, near pre-pandemic trends, according to U.S. Energy Information Administration data.

Marathon said its refining and marketing margins jumped nearly 51% to $15.31 per barrel in the quarter ended March 31.

Crude capacity utilization was 91%, resulting in total throughput of 2.8 million bpd, compared with an 83% utilization and total throughput of 2.6 million bpd a year earlier.

For the current quarter, it expects throughput of 2.9 million bpd.

The refining and marketing segment’s profit from operations stood at $768 million, compared with a loss of $598 million last year.

The Findlay, Ohio-based refiner said net profit came in at $845 million, or $1.49 per share, for the reported quarter, compared with a loss of $242 million, or 37 cents per share, a year earlier.

Analysts were expecting a profit of $1.11 per share, according to Refintiv IBES.

Marathon’s results followed strong earnings from other energy companies, including Valero Energy Corp and Phillips 66.

(Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila, Rashmi Aich and Shailesh Kuber)

(Reuters) – Nutrien Ltd on Monday raised its full-year earnings forecast well above estimates after posting a more than 10-fold jump in first-quarter profit, as the world’s largest fertilizer company benefits strongly from soaring prices of crop nutrients.

Prices of essential crop nutrients such as potash and phosphate skyrocketed in the quarter, touching near-record levels, as sanctions imposed on major exporter Russia for its invasion of Ukraine disrupted supplies that were already tight.

Demand for fertilizer has also been strong as an inflation-induced surge in prices of major crops is driving farmers to increase production.

(Graphic- Sanctions leave a void in global potash production: https://graphics.reuters.com/FERTILIZERS-RESULTS/zdvxogalapx/chart.png)

“Global agriculture and crop input markets are being impacted by a number of unprecedented supply disruptions that have contributed to higher commodity prices and escalated concerns for global food security,” interim Chief Executive Officer Ken Seitz said in a statement.

Seitz also said Nutrien could potentially expand its low-cost fertilizer production capability.

Shares of the company were up about 3% in extended trading.

The company, however, forecast a cut in global potash shipments for the year, citing supply uncertainties from Russia and Belarus.

Nutrien expects 2022 adjusted earnings of $16.20 to $18.70 per share, compared with its previous forecast of $10.20 to $11.80 per share. Analysts were expecting $15.20 per share, as per Refinitiv data.

Net earnings rose to $1.39 billion, or $2.49 per share, in the quarter ended March 31 from $133 million, or 22 cents per share, a year earlier.

Excluding items, it posted a profit of $2.70 per share, but missed estimates of $2.75.

Earlier, rival Mosaic Co, the world’s largest producer of finished phosphate products, posted a more than seven-fold surge in quarterly profit that narrowly beat estimates.

Mosaic said its potash and phosphate shipments were delayed by poor rail performance, adding that rail cycle times would not likely recover to normal levels until the second half of 2022.

The company earned $2.41 per share, excluding items, while analysts were expecting $2.40.

(This story refiles to correct seventh paragraph to show reduction in forecast for potash shipments is global, not company specific)

(Reporting by Ruhi Soni in Bengaluru; Editing by Anil D’Silva)

By Kannaki Deka

(Reuters) – Hilton Worldwide Holdings Inc on Tuesday forecast a lower-than-expected annual profit as a surge in labor costs and other inflationary pressures are set to weigh on the hotel operator’s earnings.

Shares of the company, which owns brands including the Waldorf Astoria Hotels & Resorts, were down 4% at $148.37.

A surge in leisure travel in the U.S. has surpassed pre-pandemic levels, while fuel and labor costs have pressured profits for the tourism industry.

“Our ability to reprice rooms in real time creates a natural inflation hedge,” Hilton Chief Executive Officer Christopher Nassetta said.

The company expects a full-year adjusted profit of between $3.77 and $4.02 per share, compared with estimates of $4.10, according to Refinitiv IBES data.

Hilton also forecast a second-quarter profit of $0.98 to $1.03 per share. Analysts had expected earnings of $1.07 per share.

The company’s expenses rose 58.5% in the first quarter to $1.35 billion.

“Hilton-owned properties saw some inflation on the expense side with labor. This is something that we’re seeing around the country with inflation, if you want the best employees, it’s going to cost a little bit more,” Macquarie Securities analyst Chad Beynon said.

On an adjusted basis, the company earned 71 cents per share, beating estimates of 65 cents, as people spent more on travel, dining out and hotel stays despite rising inflation.

Hilton also reinstated dividend payout and buyback of shares earlier than expected. The company expects to return between $1.4 billion and $1.8 billion to stockholders this year.

The company’s comparable RevPAR, or revenue per available room, rose 80.5% in the reported quarter.

Hilton posted revenue of $1.72 billion, compared with estimates of $1.73 billion.

(Reporting by Kannaki Deka in Bengaluru; Editing by Rashmi Aich and Shounak Dasgupta)

By Nelson Banya and Helen Reid

JOHANNESBURG – Mining companies in South Africa have resorted to trucking coal to ports to meet a surge in European demand since the war in Ukraine started, bypassing the deteriorating rail infrastructure they blame for billions of dollars in lost revenue.

Poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism have disrupted state logistics firm Transnet’s freight rail services, causing coal and iron ore exports to fall in recent years.

In April, Transnet declared force majeure on contracts with producers but with coal prices near record highs, mining firms including Glencore have turned to trucks, one industry source said. A Glencore spokesperson declined to comment.

Trucking coal costs about four times more than rail, according to miner Menar. It has started using trucks but said the high coal prices mean miners can absorb the cost, for now.

“The industry at large are on their knees, so they are resorting to drastic measures,” said Clifford Hallatt, chief operating officer at Canyon Coal, a joint venture between Menar and commodity trader Mercuria.

At Canyon Coal’s Khanye Colliery some 90 km (55 miles) from Johannesburg, it takes about 80 trucks – each carrying 34 tonnes – to replace one average Transnet train, making it unsustainable financially, boosting emissions and clogging roads.

But the company says it has little choice.

A year ago, it was loading five or six Transnet trains a week from Khanye. That has dropped to just two or three now, and its stockpiles of coal have been mounting, Hallatt said.

COAL PRICES ROCKET

Demand, meanwhile, has shot up since the war in Ukraine. The European Union has announced a ban on Russian coal and mining companies in South Africa say they are fielding calls from European countries looking for imports.

As for prices, Australian thermal coal futures were trading at about $80 a tonne at the start of 2021. A week after Russia sent its forces into Ukraine, they rocketed to a record high of $440 and are now trading at $326 a tonne.

Menar is trucking about 120,000 tonnes of coal a month and plans to increase that to 200,000 tonnes, Hallatt said.

As a whole, South African coal miners are putting about 400 trucks on the road a day, trucking some 6 million tonnes of coal on an annualised basis, according to the industry source.

“We are aware that there’s been an increase in the number of coal trucks now running into the ports and that’s not a good situation,” Transnet Freight Rail Chief Executive Sizakele Mzimela told Reuters.

Transnet shipped 58.3 million tonnes of coal to the Richards Bay Coal Terminal last year, 24% below its annual capacity of 77 million tonnes. Transnet expects an improvement in the delivery of coal this year, to about 60 million tonnes.

But limited rail capacity cost bulk commodity exporters at least 35 billion rand ($2.2 billion) last year in lost revenue, according to South Africa’s Minerals Council.

Transnet’s Mzimela said the state-owned firm feels the industry’s pain.

“The frustration is more about the lost opportunity, because of course if we were able to move more, we would benefit, they would benefit. We are tied at the hip,” she said.

Transnet freight rail capacity constraints https://graphics.reuters.com/MINING-INDABA/LOGISTICS/myvmnqwqepr/chart.png

OTHER OPPORTUNITIES?

Mzimela said Transnet was open to miners investing in their own rolling stock, as well as allowing private rail operators to run on some container route slots. But it does not plan to open its iron ore and coal lines to private firms.

That falls short of what mining firms, who are helping to fund private security to combat theft along rail lines, want.

Menar said it was pushing to invest in state-owned rail lines and procure its own locomotives and wagons as part of attempts to overcome the country’s infrastructure bottleneck.

Hallatt told Reuters that Menar would also consider operating a section of the bulk commodity rail lines, although that’s an option Transnet’s Mzimela rejects.

Since the security collaboration started, the number of drones monitoring the coal line from Mpumalanga to Richards Bay has more than doubled and incidents have fallen to about 19 a week from 35 previously, according to Transnet.

The copper cables carrying electricity from substations along the line to signalling systems are regularly stolen, for example, as well as other metal parts along the track.

For the first time, South Africa was ranked among the 10 least attractive jurisdictions for mining investment in the Fraser Institute’s annual mining industry survey last year.

Gabrielle Reid, associate director for strategic intelligence at S-RM, said the logistical challenges were now prompting some South African miners to look outside the country for growth opportunities.

“Our most recent experiences with rail in South Africa make for a compelling diversification case,” July Ndlovu, chief executive of thermal coal producer Thungela Resources, told analysts on a call in March.

“Given the concentration that we’ve got in a single geography and the concentrated risk associated with that infrastructure, I think it stands to reason that we should look at other opportunities.”

(Reporting by Nelson Banya and Helen Reid; Editing by David Clarke)

By Julia Payne

LAGOS -Nigeria had to buy emergency supplies of Canadian potash in April after the country was unable to import the key fertilizer from Russia due to the impact of Western sanctions, the head of Nigeria’s sovereign investment authority NSIA said.

Uche Orji, the head of NSIA, declined to comment on prices. However, spot prices today are up more than 250% for deliveries to west Africa compared to last year, according to commodities pricing agency Argus Media, dealing a further blow to the country’s finances.

    The move shows one of many unintended negative consequences of sanctions to punish Russia for its invasion of Ukraine, which it calls a “special military operation”.

    The International Monetary Fund said last week that the invasion had delivered a further “huge negative shock” to sub-Saharan Africa, driving food and energy prices higher and putting the most vulnerable people at risk of hunger.

    The extra pressure comes as many countries are still reeling from the protracted COVID-19 pandemic.

    Nigeria has for years been battling double-digit inflation, which quickened to 15.92% last month, and its population of 200 million will face even higher food costs this year and the next as the agricultural sector passes on the higher costs of imported wheat, diesel and fertilizer.

    “Russia was unable to deliver so we bought spot from traders in Canada. The Canadian High Commission in Nigeria helped start the conversation with producers,” Orji told Reuters.

NSIA negotiates imports of raw fertilizer materials like potash as part of the Nigerian government’s programme to develop its capacity to produce blended fertilizer.

Orji said Nigeria has enough potash inventories to cover 40% of blending demand and bought three cargoes of Canadian potash, which should arrive within the next month. Normally, the country takes five Russian cargoes a year.

    Western sanctions and self-sanctioning by many global companies and financial institutions has created chaos for anyone dealing in products of Russian origin and sent many energy and commodity prices to record highs.

    Russia’s Uralkali, a major global producer of the crop nutrient, has been Nigeria’s exclusive supplier since 2019.

    Uralkali declined comment. A spokesperson for the Canadian government said it “is aware of the challenges being experienced with accessing potash as a result of the Russian invasion of Ukraine, and we are working closely with our Nigerian counterparts to explore sustainable solutions.”

    The potash producer has not itself been targeted by sanctions so far but Russian businessman Dmitry Mazepin left the board and cut his controlling stake in Uralchem after he was hit by EU sanctions in March. Uralchem owns the majority of Uralkali.

    Orji said there were ongoing discussions to see if a Russian delivery could still be made.

    The price of potash has been on the rise since last year after the EU imposed some sanctions on Belarus, the world’s third biggest producer after Russia and Canada.

    The price skyrocketed in early March following financial sanctions on Russia, hitting a record $1,125 per tonne at the end of April for product on a delivered basis to South Africa, according to commodity pricing agency Argus Media. Combined, Belarus and Russia account for 38% of global potash supplies, which are now uncertain.

Nigeria imported about 200,000 tonnes of potash last year, one of three key ingredients for fertilizer blending, according to the local fertilizer association FEPSAN. Nigeria’s raw material imports meet just under 40% of Nigeria’s needs, the rest is sourced domestically, and local blended output was 1.5 million tonnes last year, nearly equal to domestic consumption.

    “The Canadian potash will hopefully arrive just in the nick of time for the planting season, which starts as early as end-May in some parts,” FEPSAN executive director Gideon Negedu said, adding the association has a strategy to prioritise crops that need more potash.

(Reporting by Julia Payne, additional reporting by Reuters; editing by David Evans)

BRUSSELS -The European Union will slap new sanctions on Russia for waging war against Ukraine, targeting Moscow’s oil industry, more Russian banks and those responsible for disinformation, the EU’s top diplomat said on Tuesday.

“We are working on the sixth package of sanctions which aims to de-SWIFT more banks, list disinformation actors and tackle oil imports,” Josep Borrell, head of the foreign policy unit at the EU’s executive European Commission, said in a tweet.

The latest round of sanctions would also affect Sberbank, Russia’s top lender, diplomats said, adding it to several banks that have already been excluded from the SWIFT messaging system.

Borrell said the Commission’s proposed measures against Russia, which attacked Ukraine by land, sea and air on Feb. 24, would be presented to the 27 EU member states for approval.

Officials said European Commission President Ursula von der Leyen is expected to spell out the proposed new sanctions on Wednesday, and that they would include a ban on imports of Russian oil by the end of this year.

Russian President Vladimir Putin put the West on notice on Tuesday that he could terminate exports and deals in response to the sanctions burden imposed by the EU and the United States.

An embargo on Russian oil would deprive Moscow of a large revenue stream, but reaching an agreement on the measure has divided countries of the bloc, which relies on Russia for 26% of its oil imports.

Hungary and Germany were among those with reservations against an oil embargo. Among their concerns was that surging energy prices would hurt EU economies already grappling with inflation.

Resistance to an oil import ban faded over the past week after an agreement came together that would offer exemptions to Slovakia and Hungary, diplomats told Reuters, citing two countries highly dependent on Russian crude.

EU countries have paid more than 47 billion euros ($47.43 billion) to Russia for gas and oil since it invaded Ukraine, according to research organisation the Centre for Research on Energy and Clean Air.

(Writing by Gabriela BaczynskaEditing by Charlotte Van Cempenhout, John Chalmers and Mark Heinrich)

By Steven Scheer

JERUSALEM -Teva Pharmaceutical Industries believes it would have to pay around $2.6 billion in cash and medicine to settle thousands of lawsuits alleging it and other drug companies fuelled the U.S. opioid epidemic.

On the heels of two more state settlements this year, Israel-based Teva, the world’s largest generic drugmaker, raised its legal provision for the opioid litigation by $1.1 billion in the first quarter to $2.6 billion, which would be paid out over 15 years.

“It’s the result of a holistic assessment of what’s the effect of (state) settlements we have done so far, (and) what’s the most likely outcome based on our current negotiations,” CEO Kåre Schultz told a conference call of analysts after Teva reported first-quarter profit that met expectations.

Teva in March settled with Florida and Rhode Island, with a bench trial in West Virginia this month and another in San Francisco slated for July. Schultz hopes for a nationwide settlement and there are ongoing negotiations.

“We’re getting closer there,” Schultz said. “I’m slightly more optimistic on the time schedule now. And that’s why I hope that we will see a nationalised settlement before the end of this year.”

He told Reuters such a settlement would avoid many more trials that could take years. “If you want to help people suffering from substance abuse, you sort of have to settle because otherwise as long as you haven’t settled there’s no help coming to people in individual states that have not settled,” he added.

Teva agreed to pay $21 million to Rhode Island plus $78.5 million worth of generic versions of overdose treatments Narcan and Suboxone. In Florida, it will pay $177 million plus $84 million in generic Narcan.

Teva’s preference for contributing medicines over cash has been a sticking point in settlement talks. Some states and counties have raised concerns that long-term distribution agreements could discourage other companies from devising new forms of treatment. They have also questioned the value of the medicine, produced far more cheaply than the prices used in the settlement agreements.

Teva earned 55 cents per diluted share excluding one-time items in the January-March period, down from 63 cents a share a year earlier.

Hurt by lower sales in North America of both generic drugs and its own multiple sclerosis treatment Copaxone, which is facing stiff competition, revenue fell 8% to $3.66 billion.

Analysts had forecast Teva would earn 55 cents a share ex-items on revenue of $3.76 billion, according to I/B/E/S data from Refinitiv.

Amid currency fluctuations, Teva lowered its 2022 revenue estimate to $15.4-$16.0 billion from $15.6-$16.2 billion, after revenue of $15.9 billion in 2021. It reiterated its projection for 2022 adjusted EPS of $2.40-$2.60, versus $2.58 last year.

Sales of the company’s migraine drug Ajovy grew 16% to $36 million and reached a 24% market share, although Schultz said he expects that to rise to 33%. Huntington’s disease treatment Austedo’s sales rose 6% to $154 million, with projections of $1 billion in 2022.

Overall generic drug sales in North America dipped 15% to $899 million due to competition on many products.

Revenue in Europe slipped 5% to $1.16 billion, although sales of Ajovy doubled to $30 million.

Teva’s net debt fell to $20.7 billion and the company continues to use all its cash to pay down debt.

Its New York-listed shares were up 1.2% at $8.64 at midday.

(Reporting by Steven Scheer, additional reporting by Dietrich Knauth; Editing by Louise Heavens, Mark Potter and David Gregorio)