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(An item published at 1224 BST misstated the size of the Bank of England's asset purchase programme. The correct version follows.)
LONDON (Alliance News) - Mining giant Rio Tinto Thursday said its pretax profit almost doubled in its first half and it raised its interim dividend by 15%, as the company passed its operating cash cost reduction target six months ahead of schedule and benefited from foreign exchange gains.
Pretax profit increased to USD6.09 billion for the six months ended June 30 from USD3.21 billion the previous year.
Insurers Aviva and RSA Insurance Group continued to report contrasting fortunes, with Aviva reporting a rise in pretax operating profit from continuing operations as increases in its life business and from fund management more than offset a drop in general insurance and health. Aviva increased its interim dividend by 4.5% to 5.85 pence from 5.60p, as it made a GBP1.05 billion pretax operating profit in the six months ended June 30, compared with GBP1.01 billion in the corresponding period last year.
RSA, meanwhile, reported a substantial drop in first half pretax profit as Chief Executive Stephen Hester continues to implement his turnaround plans at the embattled insurer. RSA did not pay an interim dividend but said it is targeting a restart at the end of the year. RSA said it made a GBP45.0 million pretax profit in the six months ended June 30, compared with GBP240.0 million in the corresponding period last year.
The Bank of England has kept interest rates unchanged at 0.50% and its asset purchase programme unchanged at GBP375 billion. The ECB decision follows shortly.
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Markets: UK stocks are trading a little lower, with company updates driving the main movers. With little in the morning economic calendar, the ongoing war of sanctions between the Russian and western economies is still weighing on sentiment, with Russia most recently imposing a "full embargo" on food imports from any country involved in the sanctions.
Futures markets indicate that Wall Street will open slightly higher Thursday.
FTSE 100: down 0.2% at 6,625.79
FTSE 250: up 0.1% at 15,271.22
AIM ALL-SHARE: down 0.2% at 750.02
GBP-USD: flat at 1.6853
EUR-USD: flat at 1.3378
GOLD: up at USD1,307.20 an ounce
OIL (Brent): flat at USD104.49 a barrel
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Other Top UK Corporate News
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Randgold Resources said its pretax profit jumped in its second quarter as higher gold production and lower cost of sales offset a fall in the price of gold. The mining company said its pretax profit increased 52% to USD92.1 million for the three months ended June 30, from USD60.7 million a year earlier, as revenue rose 28% to USD292.8 million. The company said gold production rose 41% on the year to 277,283 ounces in the second quarter, while its costs per ounce of gold fell 12% to USD701. In its first half as a whole, the company's revenue rose 12% to USD577.2 million and pretax profit increased 37% to USD200.1 million.
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Mondi said that pretax profit rose in its first-half, supported by strong performances in packaging paper, fibre packaging and its South Africa division, and lower restructuring charges. It increased its dividend by 39%. The FTSE 100-listed company said first-half underlying operating profit - which excludes items including restructuring costs and asset impairments - rose 3% to EUR377 million, from EUR366 million in the comparable period last year. Pretax profit rose to EUR312 million, from EUR229 million in the first-half in 2013 and EUR270 million in the second-half. The company said that on a like-for-like basis, excluding currency movements and disposal effects, revenue was in line with the comparable prior year period.
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Coca-Cola HBC said its pretax profit rose in the second quarter, despite a continued fall in net sales revenue, and said the strong second quarter drove profit growth in the first half as whole. The bottling group reported a pretax profit of EUR178.7 million for the three months to June 27, up from EUR120.0 million a year earlier, driven by cost cutting, lower input costs, higher pricing and lower financing costs. However, the group said that due to difficult economic and trading conditions, and a sudden deterioration of trading in Russia and a small number of other markets, it now expects the volume decline trend seen in the first half to persist in the remainder of the year.
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Old Mutual reported a drop in first half profit, as the group, which operates across numerous countries from the UK and South Africa to sub-Saharan Africa, was hit by the strength of sterling. Old Mutual increased its interim dividend to 2.45 pence from 2.10p. In a statement, the Anglo-South African investment, savings, insurance and banking group said it made a GBP564.0 million pretax profit in the six months ended June 30, compared with GBP805.0 million in the corresponding period last year. Revenue fell by GBP1.68 billion to GBP7.96 billion, while expenses fell by GBP1.45 billion to GBP7.39 billion.
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AMEC said its pretax profit slumped in its first half as revenue was hit by the strength of sterling and the continued slow down of operations in conventional oil and gas. The consultancy, engineering and project management services supplier said pretax profit fell 29% to GBP83 million for the six months ended June 30, from GBP118 million in the same period the previous year. Revenue fell 7% to GBP1.86 billion, from GBP1.99 billion, included a GBP160 million hit from the strength of sterling.
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Soco International plans to keep its full year production guidance, despite operational delays after it hit geological problems at a well in Vietnam. The oil and gas explorer and producer said in an activity update that it expects the CNV-7PST1 well in the Vietnamese Ca Ngu Vang field to be completed in September. The company said the well hit unexpected geological problems in the upper hole section of the well, just above the reservoir, and that borehole instability issues mean that part of the well has to be re-drilled and a new casing put in place. Despite this, Soco plans to keep its full year production guidance at 14,000 to 15,000 barrels of oil equivalent per day.
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Drax Group said the UK Court of Appeal has backed the Department of Energy and Climate Change in its decision not to allow the conversion of the second unit at Drax's power station to be eligible for new subsidies. Drax shares fell 10% to 639.00 pence, making it the biggest FTSE 250 loser. The UK energy provider started legal proceedings earlier this year against the UK government, after it said the second unit at the power station, which is due to be converted to burning biomass rather than coal, will not be eligible for investment contracts under a new contracts-for-difference scheme, a subsidy for low-carbon electricity generation.
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Cobham saw its shares jump after the company said that pretax profit and revenue declined in its first-half after big orders it had delivered a year earlier weren't repeated, although it remains confident that it will meet its expectations for the full-year after predicting higher trading margins in the second half. Cobham said pretax profit fell to GBP118 million in the six months to end-June, from GBP137 million a year earlier. Revenue declined 3% to GBP834 million, from GBP864 million, and order intake fell 25% to GBP728 million, from GBP976 million.
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Henderson Group reported a decline in assets under management over the course of the second quarter, as the creation of a 40%-owned real estate joint venture with IAA-CREF and the additional stake it took in 90 West came into effect. The investment manager said assets under management fell to GBP74.71 billion at the end of June, from GBP79.20 billion at the end of March. This was due to a GBP6.68 billion reduction due to those deals coming into effect, more than offsetting GBP1.86 billion of net inflows from retail clients and GBP179.0 million of institutional net inflows. Henderson is also awaiting the closing of a deal to acquire Geneva Capital Management, which had USD6.3 billion in assets under management at the end of May, for up to USD200.0 million.
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British Land Company said that its recently opened Old Market shopping centre in Hereford is now fully let as River Island and Joules joined the existing retailers at the GBP90 million centre on 10-year leases. The Old Market shopping centre opened on May 1, and British Land said that with the last three remaining units at the site now under offer, the scheme is now fully let and under offer.
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Lloyds Banking Group has said it will defend itself against a lawsuit filed by investors in the bank, which has the potential to be one of the biggest in terms of damages ever heard in English courts, the Financial Times reports. The bank was sued in London on Wednesday by investors over its UK government-arranged takeover of HBOS in 2008. The bank's former chairman, Victor Blank, and former chief executive, Eric Daniels, are both named as defendants in the suit, the FT said. The claimants argue they were misled into approving the merger as key information regarding the true financial health of HBOS was withheld.
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InterContinental Hotels Group said it has received a binding offer from Constellation Hotels Holding Ltd to acquire IHG's InterContinental Paris Le Grand hotel for EUR330 million. The owner of the Crowne Plaza and Holiday Inn chains said within the binding offer to acquire the 470-room Paris hotel, Constellation Hotels has made a further commitment to invest over time an estimated EUR60 million in renovating the hotel. IHG said that as at June 30, the hotel had a book value of EUR342 million.
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Vodafone Group and O2 are set to accelerate the rollout of superfast 4G networks in the UK after striking a deal with Arqiva, the Financial Times reported. The telecommunications infrastructure firm has signed a ten-year site-share deal with Vodafone and Telefonica UK, the operator of the O2 brand, under which the operators will get access to Arqiva's 16,700 sites across the country, the newspaper said.
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AIM MOVERS
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Metminco is a big gainer after a Chilean Constitutional Tribunal said that the company's attempted appeal to overturn a Supreme Court ruling that had backed the land owner's attempts to block further mining at the Mollacas project in the country was admissible. Graphene NanoChem is also up after it filed two new patents for graphene nanomaterials production processes. Mwana Africa is a big faller after it achieved mixed production rates in its first quarter, posting a significant fall in nickel production but growth in its gold and diamond operations.
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Top Economics And General
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Germany's industrial production grew for the first time in four months in June, Destatis reported. Industrial output increased 0.3% month-on-month in June, reversing the revised 1.7% fall in May. June's rate of growth was slower than the expected 1.2% increase.
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France's trade deficit widened more-than-expected in June, data from the Customs Office showed. The trade deficit increased to EUR 5.380 billion in June, which was larger than the EUR 4.912 billion deficit expected by economists. The shortfall was EUR 4.864 billion in the corresponding month of the previous year. In May, a trade deficit of EUR 5.129 billion was recorded.
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The Russian ban on all imports of meat, milk products, fish, fruits and vegetables from the US, EU, Australia, Canada and Norway goes into immediate effect and will last a year, Prime Minister Dmitri Medvedev said. He described sanctions as a "dead-end track", but said Russia was forced to respond to the measures taken by Western countries. Medvedev said the year-long embargo will bolster domestic agriculture, according to the Itar-Tass news agency. Russia was also considering steps to close its airspace to flights by European and US airlines to and from the Asia-Pacific region, Medvedev told a cabinet meeting.
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Israel would respond to any rocket fire from Gaza after the expiry of the current ceasefire, the army said. "The army would then resume operations, and I think more decisively," Communications Minister Gilad Erdan told Israeli radio. "We are taking the threat seriously" of a resumption of rocket fire, Erdan said. Hamas spokesman Sami Abu Zuhri said Wednesday that extending the 72-hour ceasefire, due to expire early Friday, was not under discussion, despite earlier reports to the contrary. Israel sent a delegation to Cairo on Tuesday for indirect talks with the Palestinians through Egyptian and American mediators.
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The number of Ebola deaths in West Africa has risen to 932, the World Health Organisation said Wednesday, as the disease continues to spread across the region. The number of confirmed or suspected cases rose to 1,711, according to the WHO, which has said the current Ebola outbreak is the deadliest on record.
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Afternoon Watchlist (all times British Summer Time)
12:00 UK BoE Interest Rate Decision
12:45 EU ECB Interest Rate Decision
13:30 EU ECB Monetary policy statement and press conference
13:30 US Jobless Claims
15:30 US EIA Natural Gas Storage change
20:00 US Consumer Credit Change
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Friday's Key UK Corporate Events
TUI Travel Q3 Results
Puricore Half Year Results
Bellway Trading Statement
Catlin Group Half Year Results
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Friday's Key Economic Events (all times British Summer Time)
00:50 Japan Bank lending
00:50 Japan Trade Balance
n/a China New Loans
03:00 China Trade Balance
n/a Japan BoJ Monetary Policy Statement
n/a Japan BoJ Press Conference
07:00 Germany Trade Balance
07:45 France Budget
07:45 France Industrial Output
09:30 UK Total Trade Balance
13:30 US Nonfarm Productivity Preliminary
15:00 US Wholesale Inventories
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