(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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UniCredit said its performance improved in the first quarter of 2021 and expects further growth going forward. The Milan-based bank said it delivered revenue for the first three months of 2021 of EUR4.69 billion, up 7.1% year-on-year, boosted by a rebound in trading income and record fees, which together more than offset persistent net interest income headwinds. Trading income was EUR639 million for the quarter, up sharply from EUR173 million a year ago, while fees totalled EUR1.69 billion, up 4.3% year-on-year. Net interest income, however, plummeted 13% to EUR2.18 billion as competition and government guaranteed loans in Italy hit loan rates.
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Anheuser-Busch InBev reported a rise in profit in the first quarter and named a new chief executive, as Carlos Brito steps down after 32 years at the company. AB InBev is a Leuven, Belgium-based drink and brewing company which owns brands such as Corona and Budweiser. In the first quarter, underlying profit increased 7.8% to USD1.10 billion from USD1.02 billion a year prior. Revenue rose 17% to USD12.3 billion from USD11.00 billion in the same period of 2020. Total volumes grew by 13% to 135.6 million hectolitres from 119.7 million hectolitres a year before. AB InBev additionally announced the promotion of North America Zone President Michel Doukeris to CEO, effective July 1. Doukeris will succeed Brito, who has served as CEO for 15 years, and has been at the company for 32.
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German carmaker Volkswagen reported a jump in first quarter profits Thursday but warned that a global shortage of semiconductors that has hurt production would have a "more significant impact" in the coming months. The auto giant reported net profits of EUR3.4 billion, up from EUR517 million over the January-March period in 2020 when the first wave of the pandemic closed showrooms and factories. Revenues for the 12-brand group, which includes the Audi, Porsche and Skoda marques, climbed 13% to EUR62.4 billion, it said in a statement. The hike was driven by a rebound in car sales especially in China, the world's largest auto market, and robust global demand for high-profit luxury models, VW said.
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UK clothing and homewares retailer Next remained as dour as ever, even while boosting its full-year profit guidance following a strong first quarter. Next said full price sales were down 1.5% in the 13 weeks to May 1 on two years ago, before the Covid-19 pandemic, which the company said was a more "meaningful" comparison. The FTSE 100 constituent said it had assumed full-price sales during period would be down 10%, but beat this forecast by GBP75 million. Next raised its central guidance for full-year pretax profit by GBP20 million to GBP720 million. Next explained the profit upgrade accounts for the GBP75 million sales beat in the first quarter. It has not raised sales growth guidance for the rest of the year, which remains at 3% higher against two years ago.
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Nintendo reported its highest ever annual profit after virus lockdowns caused sales of its blockbuster Switch console to soar, but the Japanese gaming giant warned the bumper pandemic year would be hard to repeat. While fresh waves of infections have dashed recovery hopes in many industries, further restrictions have helped extend a run of good fortune for video game companies as people seek indoor entertainment. The firm said net profit jumped 86% to JPY480.4 billion, about USD4.4 billion, in the financial year that ended in March – beating its prediction of earnings of JPY400 billion.Sales in financial 2021 surged 34% to JPY1.76 trillion, Nintendo said, propelled by the runaway popularity of its Switch console and the family-friendly game 'Animal Crossing', which became a lockdown hit.
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Amazon.com boss Jeff Bezos has sold nearly USD2 billion worth of his shares in the online retailer this week, filings from the US Securities & Exchange Commission showed on Wednesday. Bezos has sold Amazon shares several times recently. In February and November 2020, he parted with shares worth a total of more than USD7 billion. Bezos founded Amazon in 1994 and is still the largest individual shareholder in the company. Amazon was recently valued at USD1.65 trillion. Bezos plans to give up his position as Amazon's chief executive in the third quarter of this year and will become an executive chairman instead.
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PayPal Holdings on Wednesday reported its best-ever start to a year, with revenue jumping more than 30% and payment volumes surging by 50% as consumers got spending again. In the first three months of 2021, net revenue was 31% higher year-on-year at USD6.03 billion from USD4.62 billion. Pretax profit jumped to USD872 million from USD263 million. PayPal posted non-GAAP earnings per share of USD1.22, up 84% annually and topping CNN-cited consensus of USD1.01. Total payment volumes rose 50% to USD285 billion, the company said.
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Uber Technologies late Wednesday reported reduced first-quarter revenue but a narrowed loss. Revenue of USD2.90 billion in the first three months of the year, from USD2.35 billion a year earlier, fell after the firm took a USD600 million accrual for the resolution of historical claims in the UK relating to the classification of drivers. Excluding this, revenue grew 8% year-on-year to USD3.5 billion. Despite the revenue fall, the firm's attributable net loss narrowed to USD108 million from USD2.94 billion. Uber's diluted loss per share also slimmed, to USD0.06 from USD1.70. "Net loss benefited from a USD1.6 billion gain from the divestiture of ATG, partly offset by the USD600 million UK accrual," the firm explained.
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MARKETS
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Stock prices in Europe were flat to lower ahead of the New York open, also pointed to be flat. Among companies reporting on Thursday, UniCredit was up 4.5% in Milan, Anheuser-Busch InBev was up 4.5% in Brussels, Volkswagen was down 2.8% in Frankfurt, and Next was up 2.9% in London.
Investors are awaiting a Bank of England policy decision at midday in London and the US jobs report for April on Friday. "Data has been improving in the UK, which together with rising global inflationary pressures have raised speculation that the Bank of England will need to start thinking about tapering bond purchases and raising interest rates in the not-too-distant future," commented Fawad Razaqzada, market analyst at ThinkMarkets.
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CAC 40: down 0.3% at 6,322.89
DAX 30: down 0.3% at 15,119.13
FTSE 100: up 1.82 points at 7,041.12
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Hang Seng: closed up 0.8% at 28,637.46
Nikkei 225: closed up 1.8% at 29,331.37
S&P/ASX 200: closed down 0.5% at 7,061.70
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DJIA: called up 9.00 points
S&P 500: called up 1.00 point
Nasdaq Composite: called up 14.00 points, 0.1%
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EUR: up at USD1.2041 (USD1.2000)
GBP: soft at USD1.3900 (USD1.3910)
USD: soft at JPY109.20 (JPY109.26)
Gold: up at USD1,792.25 per ounce (USD1,781.79)
Oil (Brent): down at USD68.83 a barrel (USD69.89)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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China said it had suspended an economic agreement with Australia, in an apparent tit-for-tat response to Canberra's scrapping of a Belt & Road infrastructure pact and threat to undo a deal leasing Darwin Port to a Chinese company. Relations between the two sides have collapsed into acrimony after Canberra called for an independent probe into the origins of the coronavirus pandemic and banned telecoms giant Huawei from building Australia's 5G network. China – Australia's biggest trading partner – has already imposed tariffs on more than a dozen key industries, including wine, barley and coal, decimating exports. In the latest recrimination, the China-Australia Strategic Economic Dialogue was pulled "based on the current attitude" of the Australian government, China's National Development and Reform Commission said in a statement Thursday, blaming some officials of a "Cold War mindset" and "ideological discrimination". Beijing will "indefinitely suspend all activities under the framework" of the agreement, the statement added.
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US President Joe Biden's administration on Wednesday announced its support for a global waiver on patent protections for Covid-19 vaccines, and will negotiate the terms at the WTO. While intellectual property rights for businesses are important, Washington "supports the waiver of those protections for Covid-19 vaccines," US Trade Representative Katherine Tai said in a statement. "This is a global health crisis, and the extraordinary circumstances of the Covid-19 pandemic call for extraordinary measures," she added. European Commission President Ursula von der Leyen said Thursday that Brussels was ready to discuss a US-backed proposal to waive patents on Covid-19 vaccines. But she stressed that Europe's priority would be to boost global supplies, and implicitly criticised the US and the UK for limiting vaccine exports. As recently as two weeks ago, Von der Leyen told the New York Times, "I am not at all a friend of releasing patents," arguing the pharmaceutical industry must be rewarded for its innovation.
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Growth in eurozone construction activity held steady in April, as a steeper decline in Germany was offset by a slightly faster rise in Italy and an improvement in France, survey results from IHS Markit showed. The IHS Eurozone construction purchasing managers' index was unchanged at 50.1 points in April, signalling a fractional expansion for the second consecutive month. Italy's construction PMI rose to 56.7 in April from 56.3 in March, and in France the gauge rose marginally to 49.8 in April from 49.7 in March. However, the German construction index dropped to 46.2 from 47.5 in March, indicating a worsened slowdown.
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UK services sector activity growth hit a seven-and-a-half year high in April as lockdown restrictions eased, according to IHS Markit. The IHS Markit/CIPS UK services purchasing managers' index was revised higher to 61.0 points in April from a preliminary estimate of 60.1, having registered 56.3 in March. The latest reading signalled the fastest pace of expansion in the sector since October 2013.
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Polling stations have opened for voters to cast their ballots in a set of elections which could shake up British politics and have profound implications for the future of the UK. On what has been dubbed Super Thursday, polling stations opened at 7am across Great Britain in the largest test of political opinion outside a general election, with the future of the Labour Party and the state of the Union among the issues at play. Scottish National Party leader Nicola Sturgeon's push for a second independence referendum means the stakes are high in the Holyrood contest. In England, as well as local council and mayoral contests, the Hartlepool parliamentary by-election will indicate what progress – if any – Labour has made in regaining votes in its former northern heartlands.
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The UK is sending two Navy ships to Jersey amid concerns of a blockade of the island due to an ongoing row with France over post-Brexit fishing rights. Two offshore patrol vessels will "monitor the situation" after French maritime minister Annick Girardin warned on Tuesday that the country was ready to take "retaliatory measures", accusing the Channel Island of dragging its feet over issuing new licences to French boats. Reports suggest as many as 100 French fishing vessels are due to arrive in Jersey on Thursday to take part in a protest over the lack of access.
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UK retail footfall recovered somewhat in April, data on Thursday showed, as high streets in England became bustling spaces once again after lockdown curbs allowed non-essential shops to reopen. According to the latest monitor from retail insights firm Springboard, footfall was 33% lower in April compared to two years earlier. In March, footfall was 55% below pre-pandemic levels. Compared to 2019, April's footfall declined 42% in high streets, 39% in shopping centres and 7.4% in retail parks. "The results reflect our predictions for a substantial boost to footfall following retail reopening, and is evidence of significant pent-up consumer demand for bricks and mortar stores," Springboard said. Non-essential shops were allowed to reopen in England on April 12.
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By Tom Waite; thomaslwaite@alliancenews.com
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