BANGKOK – Domestic car sales in Thailand rose 25.81% in January from a year earlier to 69,455 units, helped by an easing of coronavirus curbs and government support, the Federation of Thai Industries (FTI) said on Thursday.
That compared with December’s 17.2% year-on-year drop.
(Reporting by Satawasin Sta[censored]charnchai; Writing by Orathai Sriring; Editing by Ed Davies)
By Prerana Bhat and Tushar Goenka
BENGALURU – The Indian economy likely grew at a slower pace in the final quarter of 2021, primarily due to lacklustre manufacturing output and investment, according to economists in a Reuters poll.
Asia’s third largest economy expanded 6.0% in the October-December quarter compared with the same period from a year ago, the median forecast of 38 economists polled Feb. 21-23 showed, losing more steam even before disruptions from the Omicron variant of the coronavirus came into play.
The economy expanded 20.1% in the April-June quarter and 8.4% in July-September, mostly because of weak performances in the same quarters in 2020 when the pandemic took hold.
“The industrial production numbers, specifically capital and infrastructure goods production, point to a substantial slowdown (in 2021 Q4),” said Miguel Chanco, senior Asia economist at Pantheon Macroeconomics.
India’s Industrial output grew a mere 0.4% in December, a much slower pace than expected.
“The sort of rebound in Q3 after the Delta (virus variant) wave in Q2 was never going to be sustainable. But in any case, the exhaustion of momentum in Q4 particularly on the investment side was quite sharp, so that’s the largest reason for a much sharper slowdown,” Chanco added.
The latest 6.0% growth estimate was also a downgrade from 6.3% anticipated a month ago in a separate Reuters poll. Ten of 15 common contributors downgraded their forecasts or left them unchanged. The remaining five upgraded.
Forecasts were in a wide range, from 3.0% to 7.5%.
The latest GDP data is due at 1200 GMT on Feb. 28.
“Growth rates will still be muddied by base effects, so gauging momentum will be slightly difficult,” said Dhiraj Nim, economist at ANZ.
Growth in the current January-March period, partially crimped by restrictions due to Omicron, is projected at 5.0%, putting the financial year’s annual average at 9.2%, according to a separate survey taken last month.
The Reserve Bank of India has been prioritising growth and held interest rates at record lows at its February meeting, despite inflation breaching the upper limit of its target range.
“Economic activity is expected to broaden going forward … Progressively the pandemic is taking less of a toll on economic activity. Seen from this perspective, the RBI should have already taken the plunge to normalise monetary policy,” said Prithviraj Srinivas, chief economist at Axis Capital.
(Reporting by Tushar Goenka and Prerana Bhat, Polling by Devayani Sathyan and Shaloo Shrivastava, editing by Mark Heinrich)
WASHINGTON -The Federal Aviation Administration has warned that 5G wireless operations can interfere with radio altimeters in Boeing 737s, impeding a crew’s ability to safely fly or land, but FAA officials stressed the issue poses little practical effect for airlines.
Despite dire-sounding language in the FAA airworthiness directive issued on Wednesday about potential effects on 737 landings, it does not apply to aircraft flying into areas where the 5G environment has been rendered safe for aviation, which the FAA said includes nearly all airports.
The overwhelming majority of commercial airports have either established 5G wireless buffer zones around them or lack 5G operations altogether, meaning that planes landing there are protected from radio interference warned about in the FAA directive, agency officials said on Wednesday.
The FAA said the directive posted on Wednesday for most of Boeing’s 737 aircraft is very similar to notices issued previously for 737 MAX aircraft, as well as 747, 757, 767 and 777 jetliners.
However unlikely as a practical matter, Wednesday’s directive warns that certain airplane systems may not properly function “during approach, landings, and go-arounds” due to interference with radio altimeters from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band).
This in turn could lead to “increased flight crew workload while on approach with the flight director, autothrottle, or autopilot engaged, which could result in reduced ability of the flight crew to maintain safe flight and landing of the airplane,” the directive said.
The notice affects some 2,400 airplanes in the United States and about 8,300 worldwide, the FAA said.
A Boeing spokesman said in a statement: “we support the Airworthiness Directive, as it mandates the same guidance that Boeing provided to operators back in January”.
Telecommunications networks are rolling out next-generation 5G systems that the FAA has previously warned could impact sensitive airplane electronics such as radio altimeters.
The Federal Communications Commission and the National Telecommunications and Information Administration (NITA) have vowed to improve coordination on spectrum management after a dispute over 5G aviation.
The spectrum rolled out in January, but only after Verizon Communications and AT&T agreed to delay deploying 5G wireless towers near airports.
(Reporting by Susan Heavey with additional reporting by Mike Stone and Steve Gorman; Editing by Alexander Smith and Christopher Cushing)
By Dave Sherwood
HAVANA -Cuba, a close ally of Russia, has sharply criticized the United States for imposing “the progressive expansion of NATO towards the borders of the Russian Federation” and called for a diplomatic solution to preserve international peace.
One of the worst crises in Europe in decades is unfolding as Russian President Vladimir Putin ordered troops https://www.reuters.com/markets/europe/kremlin-says-no-concrete-plans-summit-with-biden-over-ukraine-2022-02-21 into two breakaway regions in eastern Ukraine after recognizing them as independent, prompting fresh sanctions https://www.reuters.com/world/europe/us-allies-step-up-sanctions-pressure-russia-over-ukraine-2022-02-23 from Western nations including the United States.
In a statement late on Tuesday, Cuba’s foreign ministry said the United States, Havana’s long-time rival, had ramped up threats against Putin, aggravating the crisis. The Cuban statement did not specifically mention Russian advances into the separatist regions of eastern Ukraine.
“The US government has been threatening Russia for weeks and manipulating the international community about the dangers of an ‘imminent massive invasion’ of Ukraine,” the Cuban statement said. “It has supplied weapons and military technology, deployed troops to several countries in the region, applied unilateral and unjust sanctions, and threatened other reprisals.”
Communist-run Cuba for decades has been an ally of Russia and the Soviet Union before that, with close economic ties.
Cuba’s statement came just hours after Russia agreed to postpone debt payments https://www.reuters.com/markets/europe/russia-postpones-cuba-debt-payments-amid-warming-relations-2022-02-23 owed to it by Cuba until 2027. Cuba’s foreign ministry said last week the two countries would deepen ties https://www.reuters.com/world/americas/cuba-deepen-ties-with-russia-ukraine-tensions-mount-2022-02-19 and explore collaboration in transportation, energy, industry and banking following a visit from Russia’s Deputy Prime Minister Yuri Borisov.
Vyacheslav Volodin, chairman of Russia’s Duma, or lower house of parliament, said during a visit to Cuba Wednesday that the United States was seeking to suppress both countries with unwarranted sanctions, according to a translated statement broadcast on Cuban state television.
“They don’t want to see a strong Russia, they don’t want Russia to be self-sufficient, and the same for Cuba, they don’t want to see a free people, they don’t want to see an independent country,” Volodin told Cuban lawmakers.
The Cuban statement on Tuesday said “constructive and respectful dialogue” was necessary to resolve the Ukraine crisis.
“We call on the United States and NATO to seriously and realistically address the well-founded claims for security guarantees of the Russian Federation, which has the right to defend itself,” the statement said.
“The determination of the United States to impose the progressive expansion of NATO towards the borders of the Russian Federation constitutes a threat to the national security of this country and to regional and international peace,” it added.
(Reporting by Dave Sherwood in Havana; Editing by Will Dunham and Gerry Doyle)
By Omar Younis and David Swanson
ADELANTO, Calif. -A group of American truckers began a cross-country drive from California to Washington on Wednesday to protest coronavirus restrictions, taking a cue from demonstrations that paralyzed Canada’s capital city, Ottawa, for weeks.
More than two dozen 18-wheeler trucks, along with some 50 pickups and recreational vehicles, left Adelanto, California, about 80 miles (130 km) northeast of Los Angeles. The self-styled ‘People’s Convoy’ is beginning an 11-day trek to the Beltway, a major highway encircling the U.S. capital, to demand an end to COVID-19 vaccine and mask requirements.
“This is for our freedoms, our human rights. Enough is enough,” said Ron Coleman, 61, a trucker from Reno, Nevada, as he prepared to make the 2,500-mile (4,000-km) journey.
Coleman, a trucker for 45 years, said the group was also pushing for the end to the emergency powers that U.S. politicians have used to enact pandemic-related restrictions.
Preparations are being made in Washington for the expected arrival of the convoy and other similar protests in the coming days. The Pentagon said it had approved 400 National Guard troops from the District of Columbia, who would not carry weapons, to help at traffic posts from Saturday through March 7.
About 50 tactical vehicles were also approved to be placed at traffic posts. In addition, up to 300 National Guard troops from outside of Washington will assist at traffic posts if needed.
U.S. House Speaker Nancy Pelosi said she was “confident” in the security plans to protect Washington around the time of President Joe Biden’s State of the Union speech next Tuesday.
The People’s Convoy is expected to arrive in the Washington area on March 5 but there are no plans to go into the District of Columbia proper, according to a statement.
Brian Brase, a truck driver and one of the organizers, said regardless of where the trucks stop, “we’re not going anywhere” until the group’s demands are met.
Brase said he expected thousands, perhaps tens of thousands, would participate. Organizers bill the convoy as nonpartisan, trucker-led, and supported by a wide range of ethnic minorities and religious faiths.
The truckers are making their demands even as most U.S. states have already eased many restrictions. In California, where the convoy begins, the state lifted universal mask requirements last week while requiring masks for vaccinated people only in high-risk areas such as public transit, schools and healthcare settings.
PENNSYLVANIA CONVOY
Another convoy, made up of a single 18-wheeler and a handful of pickup trucks and SUVs, left Scranton, Pennsylvania – Biden’s hometown – on Wednesday morning and was headed to the Beltway sometime during the afternoon.
Organizer Bob Bolus told Washington television station WJLA that his convoy has no intention of breaking laws or blocking traffic, but warned this could happen if their demands regarding pandemic mandates and the cost of fuel are not meant.
“They are not going to intimidate us and they are not going to threaten us. We’re the power, not them,” said Bolus, a trucker who owns a tow truck company.
In Canada, protests choked streets in Ottawa for more than three weeks and blocked the busiest land crossing between Canada and the United States for six days.
Prime Minister Justin Trudeau invoked rarely used emergency powers to end the protests, and Canadian police restored a sense of normalcy in Ottawa over the weekend.
In the United States, new COVID-19 cases and hospitalizations due to the coronavirus have plummeted from all-time highs hit a month ago, though nearly 2,000 people per day are still dying from the disease and the number of total deaths is closing in on 1 million since the pandemic began.
(Reporting by Omar Younis and David Swanson in Adelanto; Additional reporting and writing by Daniel Trotta in Carlsbad, California and Brendan O’Brien in Chicago; Editing by Mark Heinrich, Jonathan Oatis and Rosalba O’Brien)
By Byron Kaye
SYDNEY – South Africa’s biggest construction firm Wilson Bayly Holmes – Ovcon Ltd (WBHO) said it is pulling out of Australia, saying the country’s “hardline” COVID-19 response had impacted its property market and created business uncertainty.
The move amounts to one of Australia’s most visible corporate casualties linked to the pandemic and undercuts government claims that stimulus programs through two years of stop-start lockdowns saved businesses and jobs.
In a Johannesburg Stock Exchange filing, WBHO said it pulled financial support for Australian unit Probuild and put it into external administration because “project delivery capability … has been negatively affected by unforeseen and severe COVID-19 restrictions” and risk outweighed reward.
WBHO said it expected to post a loss for July-December because of trading losses, an impairment charge and unrecoverable “tax assets” in Australia. Its shares fell 27% on the news, their biggest decline since 1998.
The builder in a separate statement said the government’s “hardline” COVID-19 response of border closures, lockdowns and enforced work-from-home had “a considerable impact on property markets as well as other industries such as the leisure industry”.
Restrictions had “created high levels of business uncertainty in Australia and have significantly reduced demand and delayed the award of new projects in these key sectors of the construction industry,” it said.
Probuild, which was started in 1987, has been working on several high-profile commercial projects including new headquarters for biopharmaceutical giant CSL Ltd, having built a police headquarters in the second-most populous state, Victoria.
A year ago, the government blocked a A$300 million ($217 million) buyout of Probuild by China State Construction Engineering Corp Ltd on national security grounds.
A spokesperson for Treasurer Josh Frydenberg, who blocked the sale, declined to comment.
Probuild’s administrator Sal Algeri, of Deloitte Turnaround & Restructing, in a statement said he would assess the builder’s financial position and begin work on finding a new owner.
($1 = 1.3850 Australian dollars)
(Reporting by Byron Kaye; Additional reporting by Renju Jose; Editing by Christopher Cushing)
By Rory Carroll
– Major League Baseball will cancel games if a labor agreement being negotiated with its players is not finalized by Monday, a league source said.
“The deadline is the deadline,” the source told Reuters on Wednesday.
“After Feb. 28 games will be canceled. Missed games are missed games and salary will not be paid for those games.”
The Major League Baseball Players Association did not respond to a request for comment.
The date was chosen because it would allow for camps to open on March 3 and provide for four weeks of spring training before the scheduled March 31 opening day of the 162-game regular season.
A month of spring training is needed to protect the health and safety of players, the source said.
Due to inter league play occurring on an almost daily basis and the challenges involved with rescheduling those games, MLB will not reschedule missed games as double-headers as it does when games are canceled because of bad weather.
“Simply put, we would resume the existing schedule based upon when we are able to ratify an agreement and open camps.”
The league locked the players out in early December and the sides are meeting this week in the hopes of hammering out a new collective bargaining agreement.
Among the issues in the current dispute are owners and players not agreeing on service time toward free agency, playoff expansion, a luxury tax and possible salary floor, and several proposed rule changes.
Players took to social media on Wednesday to express their frustration with the deadline.
“It’s fascinating MLB setting a hard deadline to play a full season for Monday,” pitcher Alex Wood of the San Francisco Giants tweeted.
“They locked us out. Had barely any contact for two months post lockout. Have yet to make a single good faith offer to even initiate real conversations to get a deal done. Just make a real offer.”
The lockout is MLB’s first work stoppage since the players’ strike of 1994-95. That dispute forced a premature end to one season, delayed the start of the next year’s campaign and turned off fans, with attendances plummeting when play finally resumed.
(Reporting by Rory Carroll in Los Angeles; editing by Grant McCool)
By Jeff Mason
WASHINGTON -The United States on Wednesday imposed sanctions on the company in charge of building Russia’s Nord Stream 2 gas pipeline, expanding penalties on Moscow after it recognized two breakaway regions in eastern Ukraine.
The sanctions, which target the Nord Stream 2 AG company and its CEO, Matthias Warnig, add to pressure on the Baltic Sea project that was designed to double the gas flow capacity from Russia to Germany.
Europe’s most divisive energy project, Nord Stream 2 has not begun operations pending certification by Germany and the European Union.
Germany on Tuesday halted the pipeline, worth $11 billion, citing Russia’s actions toward Ukraine. The United States and the EU worry the pipeline will increase Europe’s dependence on Russian energy supplies and deny transit fees to Ukraine, host to another Russian gas pipeline.
In a statement on Wednesday, U.S. President Joe Biden said his administration had been closely coordinating Nord Stream 2 action with Germany, adding: “Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers.”
Biden added: “These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine. As I have made clear, we will not hesitate to take further steps if Russia continues to escalate.”
The U.S. Treasury Department issued a general license authorizing the “wind down” of transactions with Nord Stream 2 AG until March 2.
The sanctions did not affect Gerhard Schroeder, a former German chancellor and a close friend of Russian President Vladimir Putin’s who has headed the shareholders committee of Nord Stream since 2005.
Nord Stream 2 AG is a registered Swiss firm whose parent company is the Russian state-owned gas giant Gazprom. Gazprom owns the entire pipeline but paid half the costs, with the rest shared by Shell, Austria’s OMV, France’s Engie and Germany’s Uniper and Wintershall DEA.
(Reporting by Jeff Mason, Kanishka Singh and Daphne Psaledakis; Editing by Doina Chiacu, Chizu Nomiyama and Howard Goller)
By Ben Klayman
DETROIT -Ford Motor Co has no plans to spin off its electric vehicle or gasoline-powered vehicle businesses, Chief Executive Jim Farley said on Wednesday.
“We have no plans to spin off our electric business or our ICE business,” Farley said at a Wolfe Research conference appearance that was webcast, using an acronym for internal-combustion engine.
“We know our competition is Nio and Tesla, and we have to beat them, not match them,” he added. “And we also have to beat the best of the ICE players.”
Some investors have pushed Ford and rival General Motors Co to spin off their EV operations as a way to better tap into the full value of those businesses. EV leader Tesla Inc is the most valuable automaker in the world.
Ford previously denied reports it was considering spinning off its EV or internal-combustion engine operations. The U.S. automaker said last month it will have the annual capacity to build 600,000 EVs globally within 24 months.
Farley said on Wednesday that his management team believes the U.S. automaker’s EV and ICE businesses are underperforming on an earnings basis.
The CEO also said Ford believes it can drive a lot more cost out of its traditional ICE business through better quality, lower structural costs and reduced vehicle complexity.
“We have too many people, we have too much investment, we have too much complexity and we don’t have expertise in transitioning our assets,” Farley said of the internal-combustion business. “That’s the simple answer. There’s waste.”
“To get the margins (on electric vehicles) … that we see at a company like Tesla, we need to have real experts that can drive that scale,” he said, adding that Ford needed to hire more people who work in the areas of electrical components, advanced electrical architectures and the digital customer experience.
On the EV side of the business, Farley said Ford is working on deals to secure supply of key raw materials for batteries such as lithium, nickel, rare earths and copper to minimize risk.
On the vehicle distribution side, he said Ford needs to eliminate “ungodly expensive” inventory from the system and make it easier for consumers to reserve and track the assembly of a vehicle before its delivery.
(Reporting by Ben Klayman in Detroit; Editing by Chris Reese and Jonathan Oatis)
By Jessica DiNapoli
NEW YORK – Oreo cookie maker Mondelez International Inc will close its plants in Ukraine if the country’s tensions with Russia escalate and become “too dangerous,” Chief Executive Officer Dirk Van de Put told Reuters on Wednesday.
The snack maker has more than 4,300 employees in Eastern Europe, a region that spans from Moscow to Turkey to Kazakhstan, according to its website.
“To make sure those people are safe … that’s the number one concern,” Van de Put said in a Zoom interview. “We have big business in both countries. If that means we have to close plants because it is too dangerous, we will do so.”
In Russia and Ukraine, countries Mondelez considers emerging markets in Europe, the company manufactures local brands such as Jubilee biscuits and Korona chocolate. The Chicago-based company also sells biscuits including Oreo cookies, chocolate such as Milka, and gum and candy in the region.
The U.S. State Department said a Russian invasion of Ukraine remains potentially imminent, with Ukraine declaring a state of emergency on Wednesday.
As a precaution, Mondelez also recently boosted its cybersecurity. Van de Put said Mondelez “immediately” took steps to safeguard its information technology network against attacks.
“The war may also be played out through (computer) viruses,” the CEO said. “That could be part of this war.”
Mondelez is also concerned about ensuring that its plants are not physically destroyed, Van de Put said.
He told Reuters that he also wants to make sure store shelves in Ukraine remain stocked and that “we keep supplying the market, and that includes stockpiling ingredients.”
(This story corrects headline and first paragraph to say Mondelez will close plants only in Ukraine, not Russia, if tensions escalate)
(Reporting by Jessica DiNapoli in New York; Editing by Bill Berkrot)
By Caroline Valetkevitch
NEW YORK – Wall Street’s major indexes ended sharply lower on Wednesday, extending their recent rout as Ukraine declared a state of emergency and the U.S. State Department said a Russian invasion of Ukraine remains potentially imminent.
The State Department added that Washington has not seen any indication of Russians backing away, while the White House said President Joe Biden has no intention of sending U.S. troops to fight in Ukraine.
Earlier, the West unveiled more sanctions against Russia over its move into eastern Ukraine, and Moscow began evacuating its Kyiv embassy.
Nasdaq led the day’s decline, falling more than 2%, while the information technology sector dropped 2.6% and was the biggest drag on the S&P 500.
“If anything (Russian) President Putin is digging his heels in despite the increased sanctions,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. “That’s really adding to elevated nervousness about further aggressive actions and what that will mean for commodities and inflation overall.”
The Dow came within a hair’s breadth of confirming it was in a correction on Wednesday, while the S&P 500 in the previous session confirmed it was in a correction when the index ended down more than 10% from its Jan. 3 closing record high.
A correction is confirmed when an index closes 10% or more below its record closing level.
The Nasdaq has tumbled almost 19% from its record-high close on Nov. 19, nearing a 20% decline that many investors view as the definition of a bear market.
The Dow Jones Industrial Average fell 464.85 points, or 1.38%, to 33,131.76, the S&P 500 lost 79.26 points, or 1.84%, to 4,225.5 and the Nasdaq Composite dropped 344.03 points, or 2.57%, to 13,037.49.
Investors also have been on edge about possible aggressive tightening by the Federal Reserve to combat inflation.
“There’s been geopolitical risks and rhetoric that have given investors that much more to be worried about,” said Liz Young, head of investment strategy at SoFi.
“What it’s done is exacerbate the momentum that was already in place to the downside,” she said. “What we were seeing already coming into this was clearly a compression in multiples across a number of different highly valued areas of the market.”
A Reuters poll showed the S&P 500 index still rising by end-2022.
In company news, shares of Lowe’s Cos Inc ended slightly higher after the company raised full-year sales and profit forecasts.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 2.92-to-1 ratio; on Nasdaq, a 3.14-to-1 ratio favored decliners.
The S&P 500 posted 2 new 52-week highs and 39 new lows; the Nasdaq Composite recorded 24 new highs and 550 new lows.
Volume on U.S. exchanges was 11.98 billion shares, compared with the roughly 12.3 billion average for the full session over the last 20 trading days.
(Reporting by Caroline Valetkevitch in New York; Additional reporting by Susan Mathew and Devik Jain in Bengaluru, Sinead Carew in New York and Noel Randewich in Oakland, Calif.; Editing by Arun Koyyur and Matthew Lewis)
– Asia-focused insurer AIA Group said on Thursday it would sell its Australian savings and investments business to local life insurance firm Resolution Life Australasia, noting it is “non-core” to its strategy.
AIA did not disclose a deal value for the sale, but said the business holds about A$8 billion ($5.77 billion) in funds under administration.
The Australian savings and investment business, which offers superannuation and retirement products, was acquired by AIA Australia from Commonwealth Bank of Australia in 2020.
Hong Kong-based AIA’s largest market is mainland China, which along with Hong Kong accounts for about half of its business.
($1 = 1.3862 Australian dollars)
(Reporting by Harshita Swaminathan; Editing by Subhranshu Sahu)
By Wayne Cole
SYDNEY -Australian business investment bounced modestly last quarter as demand recovered from pandemic lockdowns and miners benefited from high resource prices, while future spending plans were again marked higher.
Figures from the Australian Bureau of Statistics on Thursday showed capital expenditure rose a real 1.1% in the December quarter to A$33.3 billion ($24.03 billion), though that missed market forecasts of a 2.6% increase.
Investment by miners climbed 2.5%, while other sectors lagged with a 0.5% increase.
Spending plans for the year to end-June 2022 were upgraded to A$144.8 billion, at the higher end of analysts’ estimates and a sign business confidence weathered the disruptions well.
The early estimate for 2022/23 came in at A$116.7 billion, which was 11% higher than the first estimate for 2021/22.
The miss on fourth-quarter spending will shave some forecasts for gross domestic product (GDP), data for which is due next week.
Yet growth still looks to have rebounded strongly as an easing in coronavirus lockdowns unleashed a wave of pent-up spending by households, which typically account for around 51% of GDP.
A new data series from the ABS released this week showed nominal household spending surged a huge 22% in the fourth quarter, compared to the badly hit third quarter.
Even accounting for a 1.3% jump in consumer prices, that implies real household spending may have boomed by around 10% and dwarfed any drag from other sectors.
Analysts are generally tipping GDP growth of around 2.5% for the fourth quarter, more than making up for the third quarter’s 1.9% decline.
More recently, the spread of the Omicron variant did curb spending in January but consumers seem back on track now that cases have tailed off.
The latest data from ANZ showed spending on its cards by households and businesses had recovered quickly in February. Just last week, spending on dining and takeaway was up 9% on a year ago, non-food retailing 10%, and travel 38%.
($1 = 1.3860 Australian dollars)
(Reporting by Wayne Cole; editing by Jane Wardell)
By Anna Ringstrom
STOCKHOLM – IKEA said on Thursday it would invest £1 billion ($1.4 bln) in London over three years, as it opened the doors to its first high street IKEA store in Britain, anchoring its first-ever inner-city mall, in the capital’s Hammersmith district.
IKEA, known for its giant out-of town warehouse stores, is in the midst of a strategy shift towards smaller inner-city locations and more digital and other services as it adapts to new shopping habits.
Ingka Group, the owner of most IKEA stores world-wide, and also of IKEA store-anchored shopping malls across Europe, Russia and China, opened the first of its new, smaller inner-city store formats in Paris in 2019.
The planned investments in London would be in existing and new stores, distribution and delivery services as well as various pilot trials, it said on Thursday as it inaugurated the Hammersmith store and mall.
“Using London as a test-bed for innovation, the retailer will trial and develop new formats and initiatives,” it said in a statement.
The next inner-city IKEA store in London is due to open in the autumn of 2023, Ingka Group said, on Oxford Circus where it bought an iconic building in 2021.
Cindy Andersen, head of malls subsidiary Ingka Centres, said the mall in Hammersmith was now fully let, against a 25% vacancy when Ingka bought it in late 2019, defying a commercial property market downturn.
She predicted the redeveloped mall – or “meeting place” as Ingka itself calls its malls – to double annual footfall, compared with 2019 figures, to 6 million.
“Fundamentally, our belief is still that people want to be with other people, to experience exciting spaces, to gather”, she said, adding that the aim was to create places that people would visit every day rather than once a week.
Ingka Centres’ second inner-city location to open was now expected to be in San Francisco, where it is redeveloping an ailing mall bought in 2020 despite deeply depressed retail markets and uncertainty caused by the pandemic.
Ingka Group’s malls, as well as its IKEA stores, are recovering well from the depths of the pandemic. Andersen told Reuters tenant sales in November-December, the important festive period, were up 25% globally from a year earlier, and up 8% from pre-pandemic 2019, to 1.3 billion euros.
($1 = 0.7384 pounds)
(Reporting by Anna Ringstrom; Editing by Shri Navaratnam)
-Booking Holdings posted quarterly profit and revenue above market expectations on Wednesday and said it is seeing an uptick in bookings, driven primarily by a recovery in cross-border travel within the European region and North America.
Pent-up demand and easing COVID curbs have in recent months sparked a surge in flight and hotel room reservations despite a temporary setback from the winter surge of the Omicron variant.
“We are still in a potentially volatile environment with high COVID infection rates in some part of the world and geopolitical uncertainty that could impact our business, especially in Europe,” said David Goulden, chief financial officer of Booking Holdings.
Online travel agency Bookings said it continues to grow its alternative accommodation supply with people still working remotely and workplaces moving to a more hybrid environment.
“The segment is a new one, which is called many different names such as ‘bleisure’ – business and leisure. We’re going to see a lot more of it in the future,” Glenn Fogel, chief executive officer of Booking, told Reuters.
Gross travel bookings soared 160% to $19 billion from the prior quarter. Gross bookings for the summer are higher than 2019 levels, led by strong bookings in Western Europe, the company said.
Excluding items, profit came in at $15.83 per share, compared with analysts’ estimates of $13.64, according to Refinitiv data. Revenue of $2.98 billion also beat estimates of 13.64 billion.
Net income was $618 million, or $14.94 per share, in the three months to Dec. 31, compared with a loss of $165 million, or $4.02 per share, a year earlier.
Shares of the Norwalk, Connecticut-based company were down 4.3% to $2,363 after the bell, amid a weaker broader market as Ukraine declared a state of emergency and the U.S. State Department said a Russian invasion of Ukraine remains potentially imminent.
(Reporting by Kannaki Deka in Bengaluru; Editing by Aditya Soni and Subhranshu Sahu)
By Nichola Groom
-The largest ever U.S. sale of offshore wind development rights – for areas off the coasts of New York and New Jersey – attracted a record $1.5 billion in bids on Wednesday, supporting President Joe Biden’s plan to create a new domestic industry.
The auction, which will continue on Thursday, is the first offshore wind lease sale under Biden, who has made expansion of offshore wind a cornerstone of his plans to tackle global warming and decarbonize the U.S. electricity grid by 2035, while creating tens of thousands of jobs.
After 21 rounds of bidding, combined live bids for the six leases stood at nearly $1.54 billion, according to updates posted on the U.S. Bureau of Ocean Energy Management’s (BOEM) web site.
That easily topped the U.S. offshore wind auction record of $405 million set in 2018. It was also far more than recent oil and gas auctions in U.S. federal waters. A sale of drilling rights in the Gulf of Mexico late last year, for instance, attracted $191.7 million in high bids.
BOEM said 14 companies took part in the auction. The web site did not identify the companies competing for the leases, but approved bidders included entities controlled by Equinor ASA, Avangrid Inc, BP Plc and Eletricite de France SA among others, according to government documents published last month.
By the end of the day, five of the six leases offered had each garnered bids well above the $135.1 million record set for a single U.S. offshore wind lease in 2018.
The highest was a bid of $410 million for a lease 32 miles (52 km) off the coast of New Jersey. The government had identified the 114-acre (46-hectare) area – the largest offered in the sale – as being capable of producing power for more than 485,000 homes.
The intense interest in the auction marks a major step forward for offshore wind power in the United States, which has lagged European nations in developing the technology. Currently, the United States has just two small offshore wind facilities, off the coasts of Rhode Island and Virginia, along with two additional commercial-scale projects recently approved for development.
BOEM is offering 488,201 acres in shallow waters between New York’s Long Island and New Jersey, an area known as the New York Bight.
The area is 22% smaller than initially proposed last summer due to concerns about the impact of developments on commercial fishing and military interests.
‘ENOUGH WIND TO POWER MILLIONS OF HOMES’
The energy generated from the newly offered areas could one day power nearly 2 million homes, the administration has said.
Last year, the Biden administration set a goal of installing 30 gigawatts (GW) of offshore wind by 2030 along the nation’s coastlines, enough to power 10 million homes. Much of the current development is happening in waters off Northeastern states.
New York and New Jersey have set targets of building more than 16 GW of offshore wind by 2035, and Wednesday’s lease areas – which lie between 20 and 69 nautical miles off the coast, according to BOEM – could deliver more than a third of that capacity.
“That’s enough wind to power millions of homes,” Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said in an interview. “That’s a big deal in a state with about nine million people.”
Not everyone supports offshore wind development. The Biden administration’s ambitions have stoked concerns among commercial fishermen and coastal communities about harm to their livelihoods and property values.
In January, a group of New Jersey residents sued BOEM over its leasing plans for the New York Bight. The group, from the summer colony of Long Beach Island, is concerned about the aesthetic impacts of the turbines and potential lost tourism.
Greg Cudnik, owner of a fishing charter boat business on Long Beach Island, worries about what thousands of wind turbines will do to the ocean habitat.
“For all this that’s taking place and all this that is put in jeopardy, to me, I don’t see the net benefit,” Cudnik said.
(Reporting by Nichola Groom in Los Angeles and Christine Kiernan in Ship Bottom, New Jersey; Editing by Bill Berkrot, Diane Craft and Richard Pullin)
SAO PAULO -The Inter-American Development Bank (IDB) and Brazilian meatpacker Marfrig Global Foods SA, owner of U.S. brand National Beef, have broken off talks over a $200 million loan tied to environmental targets, the IDB said on Wednesday.
The failed proposal highlights an uphill battle for Brazil’s beef industry, the world’s No. 1 exporter, to overcome concerns that it is contributing to deforestation of the Amazon rainforest through its opaque and poorly regulated network of suppliers.
In a statement, IDB said it had carried out due diligence last year on Marfrig’s “Verde+” program, which is designed to improve sustainability of its Brazilian beef supply chain.
IDB said as part of its internal review process, Marfrig and the lender came to “a mutual agreement that the conditions were not ideal to move forward with the loan.”
Marfrig said the suspension of the talks regarding the IDB loan was due to “a disagreement between the parties on the proposed financial conditions.”
Brazil has one of the world’s biggest cattle herds, which has grown dramatically in the Amazon region in recent years as ranchers expand on illegally deforested land, enabled by weaker environmental enforcement under President Jair Bolsonaro.
Meatpackers such as Marfrig have stepped up vetting of their direct suppliers to be sure they comply with environmental laws, but it has proven harder to track the status of the “indirect suppliers” providing cattle to those ranches.
(Reporting by Ana Mano and Jake Spring in Sao Paulo; Editing by Matthew Lewis and Kenneth Maxwell)
By Padraic Halpin
DUBLIN – EU-U.S. data transfers by Meta owned Facebook and Instagram could be halted as soon as May but the move would not immediately hit other big tech companies, Ireland’s data privacy regulator said in an interview.
Europe’s highest court ruled in 2020 that an EU-U.S. data transfer pact was invalid due to concerns that U.S. government surveillance may not respect the privacy rights of EU citizens.
That prompted Ireland’s Data Protection Commission (DPC), Meta’s lead regulator in Europe, to issue a provisional order that the mechanism Facebook and Instagram uses to transfer data from European Union users to the United States “cannot in practice be used.”
The order, which does not apply to WhatsApp as it has a different data controller within the Meta group, was frozen following a legal challenge but resumed last May when the Irish High Court dismissed Meta’s claims.
An updated decision could be shared with fellow EU regulators in April and if none of them lodge an objection, “the earliest time we could have a final decision could be the end of May,” Helen Dixon told Reuters. Any objection could add some months to the timeline.
“If there were a scenario where data flows were deemed illegal and required a halt, obviously the impacts would be huge,” she said.
But there is no way that the probe could lead to an automatic halt of similar data flows at Meta’s large rivals, many of whom also have their European headquarters in Ireland.
“The decision that the DPC will ultimately make in relation to Facebook will be specific to Facebook and addressed only to Facebook,” Dixon said.
“The consequence of the CJEU (Court of Justice of the European Union) decision is that we can’t make a broader and more sweeping finding. We have to go company by company by company,” she said.
There are “hundreds of thousands of entities” that would potentially have to be looked at, Dixon added, starting with other large internet platforms.
Meta has warned a stoppage will likely leave it unable to offer significant services such as Facebook and Instagram in Europe without a new transatlantic data transfer framework.
There is a parallel political process between the U.S. Commerce Department and the EU Commission on such remedies, but the Irish regulator has not been informed of progress.
Dixon’s office has so far completed just two investigations of multinationals under new EU privacy rules introduced in 2018, including hitting WhatsApp with a 225 million euro fine last year.
In 2022 the DPC is likely to complete nine or 10 of the 30 open probes, Dixon said, an acceleration she attributed to the near doubling of its staff in three years and would act as an answer to critics who say her office is under-resourced to deal with the huge work flow.
Staffing is set to increase to 260 by the end of 2022 from 195 currently and just 27 in 2014 but will have to continue to rise for “years to come”, Dixon said.
(Reporting by Padraic Halpin; Additional reporting by Conor Humphries; editing by Grant McCool)
– The husband of cinematographer Halyna Hutchins has said he was “so angry” that actor Alec Baldwin denied responsibility for her death after Baldwin shot her during the filming of the Western “Rust.”
In his first interview since filing a wrongful death lawsuit against Baldwin and about two dozen other defendants last week, Matt Hutchins was asked if he had watched Baldwin’s December interview with ABC News in which the actor said he was not responsible for Halyna’s death.
“I was just so angry to see him talk about her death so publicly, in such a detailed way and then to not accept any responsibility after having just described killing her,” Hutchins said in a clip aired on Wednesday from a Today program interview.
Aaron Dyer, Baldwin’s lawyer, was not immediately available for comment.
Halyna Hutchins was killed in October 2021 when a revolver Baldwin was rehearsing with during filming in New Mexico fired a live round that hit her and movie director Joel Souza, who survived.
Hutchins last week filed a wrongful death lawsuit against Baldwin and about two dozen other defendants, claiming they disregarded standard industry practices meant to keep movie sets safe.
In the December interview, Baldwin said live rounds should never have been allowed on the set.
“I feel that someone is responsible for what happened, and I can’t say who that is, but I know it’s not me,” Baldwin said.
Hutchins was asked if the majority of blame for his wife’s killing lay with Baldwin.
“The idea that the person holding the gun causing it to discharge is not responsible, is absurd to me,” Hutchins said.
Last week, in response to the lawsuit, Dyer said Baldwin should have been able to rely on the film’s armorer, prop department and assistant directors to ensure the gun was safe to use.
(Reporting by Andrew Hay; Editing by Donna Bryson and Karishma Singh)
By Shrutee Sarkar
BENGALURU – The Bank of Canada will raise interest rates by 25 basis points on March 2, earlier than previously thought and ahead of the U.S. Federal Reserve, according to economists surveyed in a Reuters poll, which also showed expectations that rates will be higher by year-end than previously thought.
Just one month ago, economists predicted the BoC would wait until the second quarter to hike rates. But persistently higher inflation, which accelerated to a 30-year peak in January, prompted them to bring forward expectations.
Other major central banks, including the Fed and the Bank of England, are also expected to raise rates in March to tackle inflation which is at multi-decade highs, with some economists calling for an aggressive 50 basis-point move by the Fed.
The poll, which was conducted Feb. 17-23, found only a 20% median probability of a 50 basis-point rate rise at the BoC’s March meeting, with all 25 economists predicting a 25 basis-point hike to 0.50%.
“I would say they’re not behind the curve because inflation expectations are well-anchored,” said Andrew Kelvin, chief Canada strategist at TD Securities. “I think that’s probably the best way of framing this. But it is imperative they do hike rates now because if they wait any longer, they will be behind the curve.”
GRAPHIC: Bank of Canada monetary policy outlook – https://fingfx.thomsonreuters.com/gfx/polling/gkplgamrxvb/Reuters%20Poll%20-%20BoC%20monetary%20policy%20outlook.png
BoC Deputy Governor Timothy Lane said last week there was a risk inflation could continue to be more persistent than forecast, adding that the central bank would be nimble and potentially “forceful” in tackling it. This would set the stage for a possible aggressive campaign of interest rate hikes.
Median forecasts in the poll showed the BoC would raise its key interest rate by 50 basis points to 1.00% next quarter and end the year with the rate at 1.25%, higher than an end-year prediction of 1.00% in a January poll but lower than current financial market expectations.
The median forecast showed the central bank would take interest rates higher by another 50 basis points in the second quarter followed by another 25 basis points in the third quarter, but economists were split on their views.
For the second quarter, 11 of 24 economists predicted a 25 basis-point rate rise and the rest expected rates to rise by at least 50 bps. The same number said rates would climb to 1.00% in the third quarter, while seven predicted rates to reach 1.25% and six said 1.50%.
While the fourth-quarter median showed rates at 1.25%, 11 of 24 respondents said rates would be at least 1.50%, including one who said 2.00%.
All 14 economists who responded to an extra question said the bank would start reducing the size of its balance sheet this year, with a majority saying in April. The others were split between March and June.
Unlike the Fed, the BoC – which owns about 42% of Canada’s sovereign debt – has never previously attempted to shrink its balance sheet, a process known as quantitative tightening (QT).
“The Bank will begin QT in April, shortly after its first rate hike in the prior month, and start to shrink its balance sheet by allowing maturing bonds to roll off without reinvesting the funds,” said Tony Stillo, director of Canada economics at Oxford Economics.
Nearly 55% of respondents, or seven of 13, who answered a separate question said inflation would not fall to the BoC’s 2% target until the second half of next year or later. Six said it would in the first half of 2023.
Respondents also expected this to be a short interest rate cycle as they put both the terminal rate and their estimated neutral rate at 2.00%, according to median forecasts from additional questions.
“The tightening cycle is playing out fast, with markets expecting an increasing and front-loaded number of rate hikes. However, household and corporate imbalances remain elevated,” said Dominique Lapointe, economist at Laurentian Bank.
“Combined with anticipated risk aversion and tighter overall financial conditions, we believe this will prevent the BoC and other central banks from hiking as much as the market currently predicts.”
(For other stories from the Reuters global economic poll:)
(Reporting and polling by Shrutee Sarkar in Bengaluru; Editing by Ross Finley and Matthew Lewis)
By Joseph Ax
-Courts in North Carolina and Pennsylvania on Wednesday approved new congressional districts that could bolster Democrats’ chances of holding onto the U.S. House of Representatives in November, after Republican efforts to install more advantageous maps for their party failed in both states.
A panel of North Carolina judges rejected the latest map produced by the Republican-controlled General Assembly, ruling that it did not meet the standards of partisan fairness that the state’s Supreme Court set earlier this month.
Instead, the judges adopted a map drawn by several court-appointed experts. The new map includes seven likely Republican districts, six likely Democratic districts and one competitive seat, Dave Wasserman, a redistricting analyst at Cook Political Report, said on Twitter.
The state Supreme Court had previously tossed out an initial Republican-backed plan as unconstitutionally partisan, finding that Republicans would win a strong majority of the state’s 14 seats under almost any circumstance.
The Republican speaker of the North Carolina House of Representatives, Tim Moore, said he would immediately appeal the “egregious” ruling.
In Pennsylvania, the state Supreme Court accepted a map backed by Democrats, weeks after Democratic Governor Tom Wolf vetoed a plan that was passed by the majority-Republican state legislature.
The map approved on Wednesday largely eschews major changes, while eliminating one Republican-held district due to the state’s slower population growth. Republicans and Democrats currently hold nine seats each.
Both decisions drew immediate criticism from Republicans that the state Supreme Courts – both majority Democratic – acted out of partisan interest rather than judicial impartiality.
“These are nothing but partisan rubber-stamps today,” said former New Jersey Governor Chris Christie, the co-chair of the National Republican Redistricting Trust, which coordinates Republican mapping efforts nationwide.
Democrats, by contrast, said the rulings ensured fair maps and protected voters’ rights.
“This is a substantial win for Pennsylvanians who now get to vote for the candidate of their choosing in fair, lawful districts for the next decade,” Eric Holder, the chairman of the National Democratic Redistricting Committee, said in a statement after the Pennsylvania decision.
Republicans need to flip only a handful of seats in November’s midterm elections to recapture control of the U.S. House and stymie much of President Joe Biden’s legislative agenda.
States must redraw their congressional maps every 10 years under federal law to account for population shifts. In most cases, lawmakers control redistricting, leading to partisan gerrymandering, the process by which one party manipulates district lines to increase its power.
With more than three dozen states having completed new maps, neither Republicans nor Democrats have gained a significant advantage. Republican gerrymanders in states such as Texas, Tennessee and Georgia have been countered by Democratic ones in Maryland, Illinois and New York.
Instead, the biggest change has been the elimination of competitive districts, a shift that is likely to increase polarization and lead to more ideologically extreme candidates, electoral experts say.
(Reporting by Joseph Ax;Editing by Colleen Jenkins and Aurora Ellis)
NEW YORK -Two prosecutors who had been leading the Manhattan district attorney’s criminal probe into former U.S. President Donald Trump and his business practices have resigned, the district attorney’s office said on Wednesday.
The departures of Special Counsel Carey Dunne and Mark Pomerantz came less than two months after District Attorney Alvin Bragg assumed office, taking over a probe into Trump and his family business, the Trump Organization.
“We are grateful for their service,” said Danielle Filson, a spokeswoman for Bragg, referring to Dunne and Pomerantz. She added that the investigation was ongoing.
Bragg had indicated to the pair that he had doubts about pursuing a case against Trump, the New York Times said, citing people with knowledge of the matter.
Dunne and Pomerantz could not immediately be reached for comment. Pomerantz had been brought in from an outside law firm to work on the probe.
Ron Fischetti, a lawyer for Trump, called the departures a sign that Bragg would not bring criminal charges against the former president, though nothing was official.
“In my mind the case is over,” Fischetti said. “There’s no question in my mind that they did it because there wasn’t a case that they could prove, and there was no purpose in them staying there any longer.”
Neither the Trump Organization nor its lawyer Alan Futerfas immediately responded to requests for comment.
The resignations come as New York Attorney General Letitia James ramps up her civil probe into Trump and his namesake company.
Last week, a state judge directed the former president and two of his adult children, Donald Trump Jr and Ivanka Trump, to answer questions in that probe under oath in depositions.
The Trump family will appeal that ruling, Fischetti said.
James joined Bragg’s criminal probe last May.
Trump, a Republican, has previously denied wrongdoing and said the state and city investigations were politically motivated.
James and Bragg are Democrats, as is Bragg’s predecessor Cyrus Vance, who began the criminal probe and did not seek reelection.
In a statement referring to that probe, a James spokeswoman said: “The investigation is ongoing and there is a robust team in place that is working on it.”
Both probes focus on whether Trump misrepresented the value of his real estate properties.
Investigators are looking into whether values were inflated to obtain bank loans and reduced to lower tax bills.
The criminal probe resulted last July in tax fraud charges against the Trump Organization and its longtime chief financial officer, Allen Weisselberg.
In what Dunne called at the time a “sweeping and audacious illegal payments scheme,” Weisselberg allegedly received millions in “off the books” payments from the company that were not disclosed to tax authorities.
Weisselberg pleaded not guilty, as did the company. Both are seeking dismissals. Fischetti described the accusations against Weisselberg as “minimal charges.”
A new grand jury was convened in September to examine how the Trump Organization valued its assets.
Fischetti said that grand jury’s term would expire in April.
Donald Trump faces multiple criminal and civil probes, including in Georgia where a prosecutor won permission to convene a grand jury to look into the then-president’s efforts to overturn the 2020 election results there.
Dunne, Vance’s former general counsel, led the office’s successful push to obtain Trump’s tax returns.
Pomerantz, a former federal prosecutor, had been on leave from the law firm Paul Weiss while working on the Trump probe.
Trump is also among those being investigated by a U.S. House of Representatives select committee looking into the Jan. 6, 2021, attack on the U.S. Capitol.
(Reporting by Karen Freifeld in New York; Additional reporting and writing by Luc CohenEditing by Jonathan Oatis and Alistair Bell)
– The European Union said on Wednesday it had imposed sanctions on a number of senior Russian officials, including Defence Minister Sergei Shoigu and Economy Minister Maxim Reshetnikov, after Moscow recognized the independence of two separatist enclaves in Ukraine.
Also targeted was Andrey Kostin, chief executive officer of Bank VTB PAO, Russia’s second-largest bank. The EU made the announcement in its official journal.
(Reporting by Maria Kiselyova in Moscow, Writing by David Ljunggren; Editing by Jacqueline Wong)
By Jason Lange
WASHINGTON – More than two-thirds of Americans think the United States should impose additional sanctions against Russia as it masses its forces along the border with Ukraine, according to a Reuters/Ipsos poll completed on Wednesday.
Nearly half of respondents to the poll disapproved of President Joe Biden’s handling of the crisis, in keeping with his low overall job approval ratings, with 48% saying Ukraine’s problems are not America’s business.
Biden has vowed Russia will pay a steep price for launching an invasion of Ukraine but he has pledged to keep U.S. troops out of the conflict.
The poll, conducted online on Tuesday and Wednesday, found some 69% of Americans – majorities of Republicans and Democrats – support additional sanctions on Russia.
The president on Tuesday toughened measures against Russian companies and individuals, effectively kicking two Russian banks out of the U.S. banking system
The poll found 62% oppose sending U.S. troops to defend Ukraine against a Russian invasion, with opposition strongest among Republicans. A majority also opposed air strikes.
Republican lawmakers, who are seeking to win control of the U.S. Congress in the Nov. 8 midterm election, have criticized Biden’s response to Russian President Vladimir Putin as too little, too late.
The poll found that just 12% of Republicans approved of Biden’s handling of the crisis, compared with 58% of Democrats.
Still, relatively few Americans blame Biden for the crisis.
According to the poll, about half the country, including a majority of Democrats and nearly half of Republicans, blame Putin, who on Tuesday ordered Russian troops to enter Ukrainian territory claimed by ethnic Russian separatists. Only 25% of Republicans polled said Biden was to blame.
Despite broad support for sanctions, only about half of Americans said sanctions were worthwhile if they increased fuel and gas prices, according to the poll. Russia is a major oil and natural gas producer and worries over the conflict have pushed prices for some oil contracts to their highest levels since 2014.
The poll was conducted online and in English throughout the United States. It gathered responses from 1,004 adults including 420 Democrats, 394 Republicans and 131 independents. The results have a credibility interval, a measure of precision, of 4 percentage points.
(Reporting by Jason Lange, additional reporting by David Morgan; Editing by Scott Malone and Cynthia Osterman)
By Gram Slattery and Marta Nogueira
RIO DE JANEIRO -Brazilian state-run oil company Petrobras smashed its all-time record for annual profits and dividend payouts in 2021, as sky-high Brent prices and a laser focus on the firm’s exploration and production business continued to bear fruit.
In a Wednesday evening securities filing, the firm, formally Petroleo Brasileiro SA, posted a yearly net income of 106.7 billion reais ($21.3 billion). That was more than double Petrobras’ previous record, set in 2019, when the firm posted a profit of 40.1 billion reais, which was about $9.2 billion at the contemporaneous exchange rate.
It was also well above the Refinitiv consensus estimate of 74.3 billion reais, thanks in part to significant one-off boosts, including asset divestments, impairment reversions and a victory in a major tax dispute. “Recurring” annual profit came in at 83.3 billion reais.
Shortly before releasing its results, Petrobras also announced that it was proposing a supplementary dividend of 2.861 reais per share at the next shareholders’ meeting in April. If approved as expected, dividends relative to the company’s 2021 performance will come to 7.773 reais per share, or 101.4 billion reais in total, a figure the company described as an all-time record.
The dividends in particular are likely to please the market. Analysts and investors have begun to pay close attention to the firm’s dividend payouts, which were paused for years as the company worked to whittle down its debt load.
Yet there are clouds ahead, and Petrobras’ results may speed the arrival of the storm.
Brazil is gearing up for a contentious presidential election in October. Current President Jair Bolsonaro has occasionally complained of high domestic fuel prices and expressed displeasure at dividend payouts. But over the last year, tangible political interference at the firm has been more subdued than many market observers had anticipated.
His main rival, leftist Luiz Inacio Lula da Silva, has promised a shake-up if elected, saying it is Brazilians, rather than international investors, who should be benefiting from Petrobras’ performance.
(Reporting by Gram Slattery and Marta Nogueira; additional reporting by Roberto Samora in Sao PauloEditing by Shri Navaratnam and Sam Holmes)