(Alliance News) - Oil major Royal Dutch Shell on Thursday outlined an amibitious plan to go net zero on carbon emission by 2050, while also aiming to reduce debt and maintain a "progressive dividend policy".
Shell said it wants to reduce net debt to USD65 billion. It also aims to "maintain the progressive dividend policy", planning payout growth of around 4% per year.
"Shell today set out its strategy to accelerate its transformation into a provider of net-zero emissions energy products and services, powered by growth in its customer-facing businesses. A disciplined cash allocation framework and rigorous approach to driving down carbon emissions will deliver value for shareholders, customers and wider society. Shell also confirmed its expectation that total carbon emissions for the company peaked in 2018, and oil production peaked in 2019," the company said.
"Shell will continue with short-term targets that will drive down carbon emissions as we make progress towards our 2050 target, linked to the remuneration of more than 16,500 staff."
Shell aims to reduce net carbon emissions by 45% by 2035 and to eliminate net emissions completely by 2050.
Shell A shares were down 0.9% early Thursday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.66 point at 6,525.02
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Hang Seng: closed up 0.5% at 30,173.57 in half-day session
Nikkei 225: Tokyo market closed for holiday
DJIA: closed up 61.97 points, or 0.2%, at 31,437.80
S&P 500: closed down 1.35 point at 3,909.88
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GBP: flat at USD1.3843 (USD1.3845)
EUR: soft at USD1.2127 (USD1.2135)
Gold: up at USD1,842.20 per ounce (USD1,837.45)
Oil (Brent): soft at USD61.10 a barrel (USD61.40)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
Chinese New Year Eve holiday. Markets closed in Shanghai and Hong Kong.
Japan National Foundation Day holiday. Markets closed in Tokyo.
EU winter interim economic forecast
0830 EST US initial jobless claims
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The UK should be "more or less free" of the coronavirus crisis by the end of the year, a leading epidemiologist has predicted. John Edmunds, a member of the government's Scientific Advisory Group for Emergencies, said some measures would remain "probably forever". But he told ITV's Peston: "I think we will be more or less free of this by the end of this year…say Christmas." His comments came as he warned against relaxing lockdown restrictions too quickly, and said there was a need to be "very cautious" about foreign travel. "I think we do have to keep our borders pretty tight at the moment – nobody likes this," he said.
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Bank of England Governor Andrew Bailey on Wednesday pressed the EU to agree a post-Brexit financial services deal by next month for the sake of pandemic recovery on both sides of the Channel. The costs of the City of London's lack of access since Brexit were laid bare in new data showing Amsterdam last month overtook London as Europe's top share trading hub. Rebutting some of the demands made by Brussels in return for the City to regain access to EU states, Bailey said Britain had no intention of creating "a low-regulation, high-risk, anything-goes financial centre and system". "We have an opportunity to move forward and rebuild our economies, post-Covid, supported by our financial systems. Now is not the time to have a regional argument," the UK central banker said in a speech. Euronext Amsterdam together with two other Dutch share markets last month displaced London's historic role as the main equities hub for Europe, the Financial Times reported. An average of EUR9.2 billion in shares were traded each day on the Amsterdam markets in January, more than four times their December figure and higher than London's EUR8.6 billion, the FT said.
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A recently signed free trade deal between Singapore and Britain entered into force on Thursday, the city-state's Trade & Industry Ministry said. The agreement, which has been "provisionally applied" since January 1, "will deepen the strong economic relations both countries share," according to Singapore's Trade Minister Chan Chun Sing. The deal, the first between Britain and one of the 10 members of the Association of Southeast Asian Nations, will "strengthen our roles as business hubs in our respective regions," Chan's ministry said on Wednesday. The ministry said that the bilateral deal means British and Singaporean businesses "will enjoy the same benefits" as under an older EU-Singapore trade agreement.
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BROKER RATING CHANGES
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BERENBERG RAISES NATIONAL EXPRESS PRICE TARGET TO 360 (280) PENCE - 'BUY'
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CREDIT SUISSE RESUMES CENTRICA WITH 'OUTPERFORM' - TARGET 70 PENCE
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CREDIT SUISSE RAISES ASOS PRICE TARGET TO 7250 (6650) PENCE - 'OUTPERFORM'
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COMPANIES - FTSE 100
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Drugmaker AstraZeneca's 2020 revenue rose 9.2% to USD26.62 billion from USD24.38 billion, with pretax profit more than doubling to USD3.92 billion from USD1.55 billion. Revenue was up 10% at constant currency. For the final quarter, revenue jumped 11% to USD7.41 billion, beating company-compiled consensus estimates of USD7.20 billion. Its annual payout was unchanged at USD2.80. For 2021, total revenue is "expected to increase by a low-teens percentage", though guidance does not account for any sales of its Covid-19 jab, nor does it include the contribution from soon-to-be acquired Alexion Pharmaceuticals. That deal is expected to close in the third quarter of the year.
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The World Health Organisation said Wednesday that AstraZeneca's vaccine could be used on people aged over 65 and also in places where new variants of the virus are circulating, following recent questions over the efficacy of the firm's jab. AstraZeneca commented on Thursday: "The University of Oxford, however, subsequently announced that a separate exploratory analysis of the COV005 Phase I/II South Africa trial, to be published in preprint in due course, showed that the vaccine had limited efficacy against mild-moderate disease caused by the B.1.351 South African variant. It was not possible to ascertain efficacy against severe disease and hospitalisation caused by this variant, given that subjects in the trial were predominantly young, healthy adults."
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Soft drinks bottler Coca-Cola HBC posted a 13% fall in net sales revenue in 2020 to EUR6.13 billion from EUR7.03 billion. According to the market consensus cited by Vuma, total reported revenue was expected to fall by 12% in 2020 to EUR6.15 billion. Annual pretax profit was 10% lower at EUR593.9 million from EUR661.2 million. But the bottler edged its payout 3.2% higher to EUR0.64, with consensus forecasts tipping a 16% cut to EUR0.52. Unit cases fell 5.7% annually, demonstrating how badly volumes were hit by Covid-19 lockdowns. However, a slightly greater fall of 6.0% was expected.
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COMPANIES - FTSE 250
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Royal Mail hailed its "busiest ever quarter", amid a surge in e-commerce related deliveries over the festive period. Third quarter revenue jumped 20%, including a 43% rise in parcel revenue. The company said 496 million parcels were handled. "On our busiest day we delivered 11.7 million parcels, 32% more than our busiest day during the first national lockdown in 2020," the company said. "We now believe that Royal Mail revenue growth for the full year 2020-21 will be significantly beyond the top end of the scenario presented in November of GBP380 million to GBP580 million."
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COMPANIES - MAIN MARKET AND AIM
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Coca-Cola European Partners posted a 9.5% fall in volumes in 2020, or 10% on a comparable basis. Revenue dropped 12% to EUR10.61 billion from EUR12.02 billion and pretax profit plunged 52% to EUR1.45 billion. The company noted that its takeover of Australian peer Coca-Cola Amatil remains subject to shareholder approval, court approval, and a green light from the New Zealand Overseas Investment Office. "Further updates will be provided in due course," CCEP added.
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COMPANIES - GLOBAL
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Zurich Insurance Group reported a decline in profit in 2020, with the first half hurt by Covid-19, though it reported a return to growth in the second half. Zurich said business operating profit came in 20% lower year-on-year in 2020 at EUR4.24 billion, with net income slipping by 8% on the prior year to EUR3.83 billion. Zurich Insurance explained that the Covid-19-related impact was USD852 million, including USD450 million in the property and casualty business. In addition, catastrophe losses were USD588 million higher than in 2019. More positively, the company said commercial insurance gross written premiums, which make up around two-thirds of the firm's Property & Casualty premiums, grew by 7% on a like-for-like basis in 2020. This was supported by significant rate increases in North America and Europe, as well as by improved customer retention.
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Thursday's Shareholder Meetings
Euromoney Institutional Investor PLC - AGM
Calisen PLC - GM re acquisition
Coral Products PLC - GM re sale of CPL And Interpack businesses
Glanbia PLC - EGM re replacement of CREST with Euroclear Bank
Law Debenture Corp PLC - EGM re amendments to Articles of Association
Tesco PLC - GM re special dividend, share consolidation
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By Tom Waite; thomaslwaite@alliancenews.com
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