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Production up, revenue down as Tullow Oil hit by oil price correction
BY:RHODRI MORGAN
The Africa-focused group saw revenue drop on the year prior weighed down by a weaker oil price.
Tullow Oil has returned to results reporting season with a bump with falls in revenue, profit and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) despite production increases.
The London-listed oil producer today said that revenue for 2023 came in at $1.63bn (£1.25bn) against $1.78bn (£1.4bn) the year prior, despite sales volume growing slightly from 55,170 to 55,754 barrels of oil equivalent per day (BOE/D).
The company attributed the decline to a lower year-on-year realised oil price in 2023, which averaged around $82 (£64.53) per barrel against the $100 (£78.69) per barrel average in 2022.
For example, the average price per barrel stood at $82.49 in 2023.12 Feb 2024
EBITDA fell from $1.46bn (£1.1bn) in 2022 to $1.1bn (£865m) and gross profit came in at just $765m (£601m) – a 29.5 per cent decrease from the $1bn (£786m) in 2022.
Impairments and write-offs for the 12 months also rose on the comparable year prior from $435m (£342.3m) to $391m (£307.6m)
In total, the company posted a full-year loss after tax of $110m (£86.5m) having been $49m (£38.5m) in profit the year prior.
Tullow is an independent energy company with oil and gas development projects across Africa, including in Ghana, Gabon and Côte d’Ivoire, alongside a material-discovered resource base in Kenya.
“In line with our strategy, we are continuing to focus relentlessly on operational excellence, capital efficiency and investments to drive growth,” said the firm’s chief executive Rahul Dhir.
“This strategy is delivering material cashflow generation and we are on track to deliver our target of c.$800m free cash flow over the 2023 to 2025 period and optimise our capital structure.”
Shares in the group were down 0.48 per cent at the market opening this morning.
Mayfair fund takes 5pc stake in ITV as advertising downturn sends shares tumbling
Story by James Warrington • 2w
IN THIS ARTICLE
ITV
Earnings in 5 days
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AMayfair fund has taken a £120m stake in ITV as the broadcaster grapples with a deep advertising downturn and slump in its market value.
Silchester International Investors has become one of ITV’s largest shareholders after snapping up a 5pc stake in the business.
The media-shy fund, which has also built a £500m stake in advertising giant WPP, states that its investment philosophy is to identify fairly valued businesses “capable of increasing earnings, assets and dividends by their own efforts”.
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Its investment in ITV makes it one of the broadcaster’s top five shareholders.
The stake building is likely to stoke speculation about a potential sale or break-up of the public service broadcaster as it battles a sharp decline in advertising that has wreaked havoc across the TV sector.
Dame Carolyn McCall, chief executive of ITV, has described the downturn as the worst since the financial crisis, with ad revenues expected to fall by 8pc across 2023.
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ITV boss Dame Carolyn McCall has warned the current downturn in the advertising market is the worst since 2008 - Anthony Harvey/Getty Images
ITV boss Dame Carolyn McCall has warned the current downturn in the advertising market is the worst since 2008 - Anthony Harvey/Getty Images
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Shares in ITV, which is best known for programmes including I’m A Celebrity… Get Me Out of Here and Love Island, are down by more than 55pc over the last five years and are trading close to their lowest level since the financial crisis.
This has left the broadcaster with a market value of under £2.4bn, well below its peak of more than £11bn in 2015.
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The dwindling valuation, coupled with broader concerns about the future of traditional TV in the streaming era, have fuelled speculation that ITV could become a takeover target.
Analysts said the upcoming renewal of ITV’s channel three licence, which will guarantee its status as a public service broadcaster for the next decade, would provide added certainty to any potential bidder.
Alex DeGroote, a media analyst, said ITV was “just ripe for a break-up or sale”.
The broadcaster is battling with a decline in traditional TV viewing as audiences increasingly move to streaming rivals such as Netflix and Disney. It has launched its own streaming service, ITVX, in a bid to reach younger viewers.
Mr Bates vs The Post Office, a drama about a huge miscarriage of justice that saw hundreds of sub-postmasters wrongly accused of theft and fraud, last month became the channel’s
GRAPHIC – M&A may breathe new life into Europe's neglected telecoms
07:01
Investors bet consolidation could lift margins
Telecoms stocks languish at record lows to market
Percentage of global funds overweight telecoms rises to 31%
By Danilo Masoni
MILAN, March 1 (Reuters) – A series of potential deals across Europe's fragmented telecoms industry has put the battered sector in the spotlight, as consolidation could help boost profit margins.
European telecoms stocks are at fresh record lows relative to the market after years of investor neglect in markets dominated by megacaps that offer fatter returns.
Since early 2000, Europe's telecoms have seen their market cap collapse six-fold to $270 billion.
"We strongly believe that M&A can draw attention to a completely forgotten equity sector," said Fabio Caldato, portfolio manager at investment company AcomeA SGR.
"We're building the position. There may be cross-border M&A that finally reduces competition and raises margins for telecom operators," he added.
Vodafone this week announced exclusive talks to sell its Italian arm to Swisscom for 8 billion euros ($8.7 billion), adding to other potential transactions in the making.
Mediobanca Securities analyst Fabio Pavan said the deal "was a step in the right direction" as it would create a group with a more than 30% share in both fixed and mobile markets in Italy, home to the European Union's third largest population.
"The telecom sector continues to show a strong need for remedies; M&A is the only effective one, opening a virtuous cycle of price-ups," Pavan also said.
The sector has been plagued by many players fighting for market share, while facing costly network upgrades to meet growing demand for data.
Analysts say industry consolidation could end price wars, allow companies to cut admin costs, and get synergies by sharing technology and infrastructure.
Telecom Italia is selling its fixed-line network to private equity investor KKR for up to 22 billion euros in "game-changing" deal BofA analysts believe will help the Italian group "remove the shackles of debt".
Orange and MasMovil got Brussels' conditional clearance in February for their 18.6 billion euro tie-up in Spain, while unlisted telecoms group Iliad took a $1.3-billion stake in Sweden's Tele2 , as its top investor, French billionaire Xavier Niel, seeks to push consolidation.
Caldato said the French, Spanish, Italian and British telecoms markets could offer opportunities, especially where companies have done most of the capex to upgrade their networks.
A European Commission document suggested regulators may loosen merger rules, although antitrust chief Margrethe Vestager in Brussels said last week such a move was not under consideration.
Investors are still chronically underweight European telecoms, but data from Morgan Stanley on funds with a combined $1.2 trillion in assets has shown positioning is on the rise.
The percentage of gl
BUZZ – Vodafone spikes on M&A chatter
12:04
* Vodafone suddenly spikes higher on M&A chatter with two traders citing a mention on deals website Betaville ** Vodafone did not immediately reply to an emailed Reuters request seeking comment ** Earlier this week co started exclusive talks to sell its Italian arm to Swisscom for $8.7 billion ** Vodafone up 3.4% by 1201 GMT. Stock down 29% over past 52 weeks
(Reporting by Danilo Masoni; Editing by Amanda Cooper) ((Danilo.Masoni@TR.com; Reuters Messaging: danilo.masoni.thomsonreuters.com@reuters.net)
UPDATE 2 – Swisscom profit rises on Fastweb growth, declines comment on Vodafone talks
08:31
(Adds comment and background on potential deal with Vodafone in paragraphs 3-5)
By Mateusz Dobrzyniewski and Anastasiia Kozlova
Feb 8 (Reuters) – Swisscom met expectations with a 4.9% rise in full-year core profit on Thursday boosted by growth in its Fastweb business in Italy.
Fastweb is seeing accelerating growth in its customer base, with revenue from both business and wholesale customers increasing despite lagging broadband demand in a tough market environment.
Telecoms groups in Italy are exploring opportunities to consolidate a market grappling with shrinking revenue and margins.
Britain's Vodafone on Monday said it was in "active discussions" about a deal in Italy, after rejecting an offer from rival Iliad last month in favour of pursuing other options.
Sources have said one of those options is a deal with Swisscom's Fastweb.
A Swisscom spokesperson declined to comment on the matter in an email to Reuters, saying the company would not publish any additional statements on Thursday.
The group posted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 4.62 billion Swiss francs ($5.29 billion) in 2023 while analysts had expected 4.61 billion, a company-compiled consensus showed.
The former state telecoms monopoly said business in Italy continued to develop positively, with a 6.1% year-on-year increase in Fastweb's revenue to 2.63 billion euros ($2.84 billion).
For 2024, Swisscom expects revenue of around 11.00 billion Swiss francs, compared with 11.07 billion last year. It forecast annual EBITDA in a range of 4.5 billion to 4.6 billion francs.
The company said it would propose a dividend of 22 francs per share for 2023, unchanged from a year earlier. ($1 = 0.8731 Swiss francs) ($1 = 0.9275 euros)
Its the shorts bring this downFund % short change Date changed
AKO Capital LLP 0.61% 0.11% 23 Jan 2024
BlackRock Investment Management (UK) Limited 0.60% 0.10% 15 Dec 2023
Kintbury Capital LLP 0.51% 0.03% 17 Jan 2024
Total 1.72%
Nuclear Armageddon: How Close Are We?
With the Doomsday Clock the closest it's ever been to midnight, Jane Corbin investigates the proliferation of nuclear weapons across the globe. She visits Los Alamos, home to the United States’ nuclear weapons development facility and the historic home of Oppenheimer’s Manhattan Project.
https://www.bbc.co.uk/programmes/m001vgq5
EUROPE RESEARCH ROUNDUP – Campari, Schneider Electric, Victrex
07:15
Jan 23 (Reuters) – Securities analysts revised their ratings and price targets on several European companies, including Campari, Schneider Electric and Victrex, on Tuesday.
Highlights
Atoss Software AG : Berenberg raises target price to EUR 250 from EUR
233
Campari : Citigroup raises to buy from neutral
Pennon Group Plc : Barclays cuts target price to 1060p from 1090p
Schneider Electric : Jefferies raises to buy from hold
Victrex Plc : Berenberg cuts to hold from buy
Following is a summary of research actions on European companies reported by Reuters on Tuesday. Stock entries are in alphabetical order.
ABN Amro : Deutsche Bank cuts target price to EUR 14 from EUR 15
Amplifon SpA : JP Morgan raises target price to EUR 33.50 from EUR 29.70
Atoss Software AG : Berenberg raises target price to EUR 250 from EUR 233
Bawag Group : HSBC raises target price to EUR 88 from EUR 82
Beazley : Berenberg raises target price to 860p from 850p
Branicks Group AG : Berenberg cuts target price to EUR 4 from EUR 7
Campari : Citigroup cuts target price to EUR 10.5 from EUR 11.5
Campari : Citigroup raises to buy from neutral
DR ING hc F Porsche AG : Citigroup cuts target price to EUR 86 from EUR
90
* E ON SE : Barclays raises target price to EUR 14 from EUR 13
Ferrexpo : Peel Hunt cuts target price to 97p from 105p
Fuchs SE : Deutsche Bank raises target price to EUR 49 from EUR 47
Kindred : Deutsche Bank raises target price to SEK 130 from SEK 109
Krones : Deutsche Bank raises target price to EUR 140 from EUR 130
La Francaise Des Jeux Saem : Deutsche Bank raises PT to EUR 38 from EUR 37
Pennon Group Plc : Barclays cuts target price to 1060p from 1090p
Qinetiq Group Plc : Berenberg raises target price to 445p from 440p
Rheinmetall : HSBC raises target price to EUR 425 from EUR 357
Rockhopper Exploration Plc : Panmure Gordon raises target price to 22.6p