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LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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BHP Billiton said its profit and earnings both plummeted in its recent financial year due to falling commodities prices, but its shares rose after the miner surprised the market by committing to its progressive dividend policy by increasing its payout. The multi-commodity giant also said it exceeded its USD4.0 billion cost-savings target two years ahead of schedule, with further cost cutting to come, as it tries to battle the downturn in the mining industry, including reducing its capital expenditure budget by a further USD500 million in the current financial year. The miner reported a pretax profit of USD8.05 billion in the year ended June 30, a huge fall from the USD21.73 billion profit made a year earlier, as revenue dropped to USD43.45 billion from USD55.04 billion. The mining major surprisingly increased its dividend for the full year by 2% to 124.0 cents per share from 122.0 cents last year.
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Antofagasta reported a huge fall in profit and earnings in the first half of the year, as expected, and cut its dividend, after being hit by lower production, sales and commodities prices. The miner reported a dramatic fall in pretax profit to USD297.3 million in the first half of 2015 from a USD820.8 million profit a year earlier, as revenue declined to USD1.78 billion from USD2.60 billion. Earnings before interest, tax, depreciation and amortisation dropped to USD561.6 million, just over half the USD1.09 billion reported a year earlier. That was slightly below analyst expectations. Antofagasta slashed its interim dividend to 3.1 cents per share from 11.7 cents a year earlier.
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RSA Insurance Group said it has received a revised takeover offer from Swiss rival Zurich Insurance Group and said it has indicated a willingness to recommend it, though Zurich said it reserves the right to make a bid below the price at which the new offer has been made. The bid is for 550.00 pence per share, or GBP5.59 billion in total, and would allow RSA shareholders to get the 3.5p per share dividend RSA announced in its interim results earlier this month. RSA shares closed Monday at 495.00p and were quoted at 517.50p miday Tuesday.
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J Sainbsury was the only big four UK supermarket to increase sales in the past 12 weeks, according to Kantar Worldpanel's grocery market survey. Sainsbury's sales rose 0.1% in the 12 weeks to August 16 to GBP4.063 billion from GBP4.060 billion in the same period a year earlier, as its market share slipped to 16.3% from 16.4%, pushing it back behind Wal-Mart Stores Inc-owned Asda, which it had overtook to become Britain's second-biggest supermarket last month. Tesco was the second best performer of the big four, with a sales decline of 0.9% to GBP7.05 billion from GBP7.12 billion a year before. In third place was Wm Morrison Supermarkets which experienced a sales decline of 1.1% to GBP2.68 billion from GBP2.71 billion, as its market share decreased to 10.8% from 11.0%.
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Tesco has received three separate binding offers for its South Korean arm valuing the business around USD5.9 billion, Reuters reports, citing people familiar with the matter. The bids have ben made by a consortium of Affinity Equity Partners and KKR, Carlyle Group and MBK Partners, all private equity houses.
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BT Group said it has begun its first field trial with its new ultrafast broadband technology, dubbed G.fast, in Huntingdon, Cambridgeshire. The technology underwent its first trial in 2013. G.fast is delivering speeds of up to 330 megabits per second, which BT said is "more than ten times the current UK average", and it is targeting speeds of up to 500 megabits per second "within a decade" as the technology is developed further. The trial comes as UK telecoms regulator Ofcom is considering the potential separation of BT's infrastructure division Openreach from the rest of BT, amongst other options, as part of its ongoing strategic review of digital communications.
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Regus posted robust results for the first half of the year, with the group's pretax profit more than doubling, its revenue pushing higher, and its return on investment in the period improving, all in line with its expectations as it works to capitalise on the growth of flexible working. The office space provider said its pretax profit for the six months to the end of June was GBP79.1 million, more than double the GBP31.0 million it posted a year earlier, helped by an improvement in Regus' return on investment in the half to 23.1% from 20.9% in the comparable period in 2014. On the back of the results, Regus raised its interim dividend by 12% to 1.4 pence per share, up from 1.25 pence.
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Petrofac said it swung to a pretax loss in the first half of 2015 despite revenue rising in the period, after the company booked multiple exceptional items and its margin was squeezed, but it kept its interim dividend flat from last year. The engineering and service company reported a USD183.0 million pretax loss in the first half of 2015, swinging from a USD188.0 million profit a year earlier, despite revenue rising to USD3.18 billion from USD2.53 billion. Petrofac retained its interim dividend from last year of 22.0 cents per share.
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Marine engineering services company James Fisher & Sons said its pretax profit ticked lower in the first half of 2015, as the company was hit by the downturn in activity in the oil and gas industry, but it still raised its dividend. The company said its pretax profit in the first half to the end of June was GBP17.9 million, down from GBP20.8 million a year earlier, as revenue fell to GBP213.1 million from GBP216.1 million. James Fisher said it will pay an interim dividend of 7.80 pence per share, up from 7.10p a year earlier.
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Al Noor Hospitals Group said it expects "slightly higher growth in revenue and earnings" in the second half of 2015 compared to the first, and reported an 8.5% rise in revenue for its first half, although higher operating costs resulted in a lower pretax profit. The Abu Dhabi private healthcare service provider proposed an interim dividend of 4.1 pence, up 10.8% from 3.7 pence a year before. Al Noor posted a pretax profit of USD44.9 million for the half year to end-June, down from USD45.6 million a year before, as a 8.5% rise in revenue to USD244.0 million from USD224.8 million was offset by an increase in operating costs related to higher depreciation expenses and the acquisition of the Gulf International Cancer Centre.
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MARKETS
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The FTSE 100 bounced back to reverse some of the losses made in the previous session following the heavy sell-off of China's "Black Monday". The blue-chip index closed at its lowest level since 2012 on Monday.
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FTSE 100: up 2.6% at 6,056.07
FTSE 250: up 2.2% at 16,568.57
AIM ALL-SHARE: up 1.3% at 711.59
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GBP: up at USD1.5798
EUR: down at USD1.1544
GOLD: down at USD1150.58 per ounce
OIL (Brent): up at USD44.03 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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China's central bank said it will inject more money into the country's markets, as it also set its currency fix slightly weaker following the three-day devaluation which drove the value of yuan down last week. The People Bank of China set Tuesday's central parity rate for yuan at 6.3987 per dollar, compared to Monday's reference rate of 6.3862. In addition, the bank said it will inject CNY150 billion via 7-day reverse repos, a decision which should also help to underpin some improved sentiment in Asian markets, according to Bloomberg.
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A leading economic index for China remained positive in July, the latest survey from the Conference Board showed, advancing 0.9%. That follows the downwardly revised 0.6% increase in June (originally up 1.0%) and the 1.1% jump in May.
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US Federal Reserve official Dennis Lockhart has repeated his view that the US central bank could raise its key interest rate this year, the Financial Times reports. Lockhart, in a speech made on Monday in California, said the Atlanta Federal Reserve's baseline forecast "is for moderate growth with continuing employment gains and a gradually rising rate of inflation." "Consistent with this picture, I expect the normalisation of monetary policy - that is, interest rates - to begin sometime this year," he added. "I expect normalisation to proceed gradually, the implication being an environment of rather low rates for quite some time."
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Germany's economic growth improved as initially estimated in the second quarter, driven by strong exports. Gross domestic product rose 0.4% quarter-on-quarter, faster than the 0.3% expansion seen in the first three months of the year, final data from Destatis showed. The growth rate matched the preliminary estimate released on August 14. Annual growth in the German GDP accelerated to a price-adjusted 1.6% from 1.2% in the first quarter. The calendar adjusted GDP also grew 1.6% versus 1.1% expansion seen a quarter ago. Annual figures also came in line with preliminary estimate.
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German business confidence improved unexpectedly in August, reports said citing data from the the Munich-based Ifo Institute. The Ifo Business Climate Index rose to 108.3 in August from 108 a month ago. It was forecast to fall to 107.6
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President Recep Tayyip Erdogan officially called for new elections in Turkey, less than three months after the last polls. The announcement came after Erdogan met with the speaker of parliament and follows coalition talks, which got off to a rocky start and never seemed destined to reach a result. The ruling Justice and Development Party, which Erdogan helped found, failed to secure a majority in parliament in June for the first time since 2002.
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A leader of the Jundullah militant group in Afghanistan's Kunduz province was killed in a US drone strike, the national intelligence agency said. The Jundullah group is a branch of the Islamic Movement of Uzbekistan in Afghanistan.
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South and North Korea reached an agreement in talks to defuse tensions in the latest crisis on the peninsula. Under the agreement, North Korea's "quasi-state of war" would be lifted, and South Korea would stop its broadcast of propaganda by loudspeaker across their shared border, South Korean security advisor Kim Kwan Jin said from Seoul. North Korea apologized for a landmine explosion that critically wounded two South Korean soldiers.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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