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LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Diageo, the world's largest spirits producer, and a major producer of beer and wine, said that organic net sales were down 1.3% in the third quarter ended March 31, while volume fell by 1% overall, as volumes continued to decline in emerging markets. "The third quarter saw currency and economic weakness impact consumer confidence across many emerging markets while consumer trends in the developed markets were in line with those in the first half," the company said in a statement. Diageo said that the business has also been hit by currency movements, warning that current exchange rates would wipe around GBP330 million off of its operating profit for the year ending June 30.
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UK housebuilder Taylor Wimpey said it had experienced a strong first few months of the year, with the market improving in all regions of the UK thanks to the government's mortgage financing scheme as well as a general improvement in availability of affordable mortgages. Taylor Wimpey reported higher sales rates, a jump in its order book and higher selling prices in recent months. It also gave a bullish outlook, predicting margin improvements this year and next.
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Ferrexpo said sales volumes increased in its first quarter following strong production from its Yeristovo mine, and it reduced its cash costs by 21% partly due to a devaluation of the Ukrainian currency. The iron ore producer, which operates solely in Ukraine, said its sales volumes increased 10.8% to 2.8 million tonnes of pellets in the three months ended March 31, up from 2.6 million tonnes for previous year as production saw a positive increase during the period despite the ongoing crisis in the country. The company said the market for its iron pellets remained strong in the first quarter but the average price of 62% iron fell 11% to USD120 per tonne compared with USD135 per tonne in the fourth quarter 2013.
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RSA Insurance Group has sold its operations in the Baltics and Poland for GBP300 million in cash, part of its effort to shore up its balance sheet it the wake of its recent problems in Ireland. The insurer as forced to launch a GBP773.0 million rights issue as part of a package of measures to shore up its balance sheet in the wake of the Irish losses. The measures included the scrapping of its dividend, a cover policy underwritten by Berkshire Hathaway, and plans to raise GBP300 million from business disposals in 2014.
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Synergy Health saw its shares fall, after it said exchange rate movements and the postponement of surgical procedures due to bad winter weather in Europe and the US meant its revenue was lower than expected in the last quarter. The company, which provides a range of outsourced health services like medical device sterilisation, infection control, laboratory services and hospital linen, said it had worked hard to improve its operating margin and as a result still expects to report a result in line with its expectations. It didn't provide any details of the measures it had taken to improve its margin, and didn't give any details of the currency movements that had weighed on its revenue.
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Severn Trent said following continued constructive dialogue with Ofwat on its Business Plan for 2015-2020 it plans to resubmit the document to Ofwat on June 27.
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Royal Dutch Shell has made a deep water gas exploration discovery at the Rosmari-1 well off the coast of Malaysia, adding to a sequence of exploration successes in the region. The company said further exploration is now planned at the block and said the finding shows the positive potential for gas in the strategically important region for Shell.
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MARKETS
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FTSE 100: down 0.2% at 6568.10
FTSE 250: up 0.4% at 15810.68
AIM ALL-SHARE: up 0.3% at 826.18
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The pound is currently trading at a four-year high against the dollar.
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GBP-USD: up at USD1.6828
EUR-USD: up at USD1.3861
GOLD: down at USD1298.34 per ounce
OIL (Brent): down at USD109.55 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Germany's producer prices dropped for an eighth successive month in March and at a faster than expected pace, data from Destatis showed. The producer price index (PPI) fell 0.9% year-on-year in March, same as in February. Economists had a forecast a fall of 0.7%. Producer prices have declined every month since August last year and the biggest fall in the cycle was in January, when they dropped 1.1%.
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At least three people were killed and 13 injured in a clash involving pro-Russian activists at a national guard base in south-eastern Ukraine, the interior minister said Thursday as top diplomats gathered in Geneva for crisis talks. The discussions among Russia, Ukraine, the US and EU got under way as part of efforts to defuse the escalating tensions between Kiev and Moscow as more violence between Ukrainian forces and pro-Russian activists were reported. About 300 activists were involved in an attack Wednesday night on the base in Mariupol, in which they opened fire and threw Molotov cocktails at Ukrainian authorities, Minister Arsen Avakov said on his Facebook page.
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Western diplomats were gathering in Geneva with representatives from Ukraine and Russia to seek de-escalation of the crisis between the two neighbours, as NATO moved to bolster its eastern defences. The alliance decided Wednesday to deploy extra equipment and military personnel in its eastern expanses, as the standoff intensified Wednesday between pro-Russian militants and Ukrainian troops in eastern Ukraine. "We will have more planes in the air, more ships on the water and more readiness on the land," NATO Secretary General Anders Fogh Rasmussen said.
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The alliance's easternmost member states have said they feel threatened by Russia, which has annexed the Black Sea peninsula of Crimea from Ukraine in March. Western nations have accused Moscow of applying military pressure on Ukraine and instigating protests in the neighbouring country.
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Murky waters and strong sea currents have hindered repeated attempts to find any more survivors in a passenger ferry which sank off the South Korean coast, officials said. The confirmed death toll reached nine in the sinking Wednesday of the Sewol ferry, as fears grew for hundreds still missing, most of them high school students. Navy and Coast Guard divers failed to enter the capsized boat after 10 attempts, South Korea's Yonhap News Agency reported.
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