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(Alliance News) - Stock prices in London are seen opening higher on Wednesday, shaking off a stronger pound, as another decent session in New York lifts spirits in Europe ahead of a key day of central bank updates on Thursday.
In early UK corporate news, telecommunications provider Vodafone said it performed in line with guidance in its third quarter. Miner and commodities trader Glencore posted a mixed 2021 output report. Gambling software firm Playtech thinks shareholders are unlikely to back a takeover from a Sydney-listed suitor.
IG futures indicate the FTSE 100 index is to open 50.2 points, 0.7%, higher at 7,585.98. The blue-chip index closed up 71.41 points, or 1.0%, at 7,535.78 on Tuesday.
Vodafone hailed a "solid quarter". In the three months to December 31, revenue rose 4.3% annually to EUR11.68 billion from EUR11.20 billion a year earlier. On an organic basis, growth was 3.7%.
Service revenue, which includes airtime usage, monthly access charges and roaming, climbed 3.1% annually to EUR9.65 billion. It was up 2.7% organically. This is where Vodafone generates most of its revenue.
"Our team has delivered another solid quarter, demonstrating the sustainability of our growth strategy and medium-term ambition. This performance keeps us firmly on track to deliver FY22 results in line with the higher guidance we set out in November," Chief Executive Nick Read commented.
"We remain focused on our operational priorities to strengthen commercial momentum in Germany, accelerate our transformation in Spain and position Vodafone Business to maximise EU recovery funding opportunities. We are also committed to creating value for our shareholders through proactive portfolio actions and continuing to improve returns at pace."
Late last week, Bloomberg reported that activist investor Cevian Capital had taken a stake in Vodafone, and the two had discussed how to boost the performance of the telecom operator.
Vodafone affirmed that it expects annual adjusted earnings before interest, tax, depreciation, amortisation and after leases between EUR15.2 billion and EUR15.4 billion for all of financial 2022. It expects EUR5.3 billion in free cash flow.
Glencore said its operating environment "remained challenging in 2021". However, the company said its performance was "largely" in line with expectations.
It posted a 5% fall in annual copper output to 1.20 million tonnes from 1.26 million in 2020. For cobalt, a key mineral in electric vehicle batteries, output rose 14% to 313,000 tonnes from 274,000 tonnes.
Elsewhere, zinc and silver output each fell 4%, and nickel declined 7%, while gold and lead fell by 12% and 14%, respectively. Coal production was 3% lower, though ferrochrome output surged 43%, amid an easier lockdown-hit comparative in South Africa.
"Overall, our operations largely performed in line with guidance expectations. We completed the Cerrejon acquisition and Ernest Henry disposal in January, such transactions being consistent with our continued strategy to simplify and align our portfolio with the materials needed for the energy transition and the responsible decline of our coal business," Chief Executive Gary Nagle said.
Glencore left guidance for 2022 unchanged.
Mining peer Anglo American said diamond sales by its De Beers arm declined year-on-year in the first sales cycle of 2022. Cycle one relates to sales between January 17 and February 1.
Sales fell 0.5% to USD660 million from USD663 million a year earlier. However, sales were 96% higher than the USD336 million achieved in the tenth cycle of 2021.
Meanwhile, Rio Tinto, fresh from releasing damning report on its own workplace culture, noted an announcement by 86%-owned investee Energy Resources of Australia.
ERA said the cost of rehabilitating the Ranger mine in Australia's Northern Territory could cost as much as AUD2.2 billion, about GBP1.16 billion. A previously announced estimate was AUD973 million.
The revised date for completion has been pushed back a year to the fourth quarter of 2028. Rio said it is committed to rehabilitating the Ranger project area to the environmental standard of the adjacent Kakadu National Park.
Elsewhere in London, gambling software firm Playtech said its takeover by Sydney-listed Aristocrat Leisure is likely to not be backed by its shareholders, based on proxy votes. The vote requires 75% shareholder approval.
"The board has been actively considering its options for maximising shareholder value in a scenario where the Aristocrat offer does not proceed and lapses, and in so doing has been evaluating attractive M&A proposals it has received from third parties in respect of Playtech's B2B and B2C businesses," the company added.
In January, one-time Playtech suitor JKO Play confirmed it does not plan on making a bid to buy the gambling software company. JKO Play is controlled by Keith O'Loughlin and Eddie Jordan, the former boss of a Formula One team.
JKO pulling out of the race left Aristocrat in pole position to complete its agreed takeover.
On current trading, Playtech said its performance has been strong since its last trading update back in November.
On Wall Street on Tuesday, the Dow Jones Industrial Average and the Nasdaq Composite closed up 0.8%, while the S&P 500 added 0.7%.
Asian equities advanced on Wednesday. The Nikkei 225 in Tokyo surged 1.7%, while the S&P/ASX 200 in Sydney added 1.2%.
The dollar was weaker early Wednesday.
The pound was quoted at USD1.3537 early Wednesday, up from USD1.3505 at the London equity market close on Tuesday. The euro stood at USD1.1277, up from USD1.1247. Against the yen, the dollar was trading at JPY114.60, down from JPY114.80.
The eurozone's annual consumer price growth is expected to slow to 4.4% in January from 5% in December. The data is due at 1000 GMT on Wednesday. However, figures for both France and Germany this week have come in ahead of expectations, giving the ECB some food for thought at its monetary policy meeting.
Elsewhere, the economic events calendar on Wednesday has the US ADP national employment report at 1315 GMT. Financial markets remain closed in Hong Kong and Shanghai for Lunar New Year.
The ECB announces its interest rate decision at 1245 GMT on Thursday, after the Bank of England at 1200 GMT.
Gold was quoted at USD1,797.50 an ounce early Wednesday, down from USD1,805.05 at the London equities close on Tuesday. Brent oil fetched USD89.39 a barrel, down slightly from USD89.50.
The 23 members of the OPEC+ oil cartel, who meet on Wednesday, are expected to stick to their guns and increase output modestly as the price of crude surges.
Representatives of the 13 members of the Organization of the Petroleum Exporting Countries, and their 10 allies through the OPEC+ agreement, will first meet at ministerial level before a broader video conference scheduled for 1300 GMT.
The cartel's prudent approach dates back to the spring of 2021 as demand recovered from drastic cuts in the face of the Covid-19 pandemic.
Since then, OPEC+ has not deviated from its line, despite calls in the autumn from the White House to further boost supplies to tamp down prices.
By Eric Cunha; ericcunha@alliancenews.com
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