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(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Consumer products maker Unilever hailed the progress of its restructuring programme, as the under-fire firm launched another large share buyback programme and promised to make no major acquisition in the "foreseeable future" after its failed tilt at the GSK Consumer Healthcare business. For 2021, Unilever generated revenue of EUR52.44 billion, up from EUR50.72 billion in 2020. The figure was higher than the company-compiled consensus forecast of EUR52.11 billion. Pretax profit rose to EUR8.6 billion from EUR8.0 billion the year prior. Underlying operating profit was EUR9.6 billion, up from EUR9.4 billion in 2020. Underlying sales growth was 4.5% in 2021, beating the consensus estimate of 4.3%. Unilever declared a quarterly dividend of EUR0.4268 per share, which results in 3% dividend growth for 2021. The company also said it will conduct a share buyback programme of up to EUR3 billion over the next two years, which it expects to commence in the first quarter. This matches the amount of share buybacks the company completed in 2021.
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L'Oreal on Wednesday said it increased sales and profit in 2021 and grew its business in Latin America and North Asia. For 2021, the Paris-based makeup, skin care and hair care company reported sales of EUR32.28 billion, up 15% from EUR27.99 billion the previous year. Chief Executive Nicolas Hieronimus told AFP it was the largest growth in 33 years. While he noted 2021 was a bit of an exceptional year given the market was rebounding from the pandemic, L'Oreal's sales have grown 8% from 2019, outperforming the overall beauty market which is just returning to pre-pandemic levels.
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AstraZeneca said sales shot up in 2021, helped by its Covid vaccine, and the pharmaceutical firm hiked its shareholder return. Revenue for 2021 rose 41% on a reported basis, and 38% at constant currencies, to USD37.42 billion from USD26.62 billion in 2020, lifted as product sales increased 41% to USD36.54 billion. Excluding Covid vaccine revenue, total sales for the year still rose a robust 26% to USD33.44 billion. Despite the sales growth, Astra swung to a pretax loss of USD265 million from a profit of USD3.92 billion year-on-year. This was due to research & development costs jumping 63% to USD9.74 billion from USD5.99 billion and selling, general & administrative expense increasing 35% to USD15.23 billion from USD11.29 billion. In 2022, Covid-19 medicine revenue is expected to decline by a low-to-mid twenties percentage, with an expected decline in sales of vaccine Vaxzevria being partially offset by growth in Evusheld, a Covid antibody treatment.
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Data analytics provider Relx fell slightly short of expectations for its 2021 results but did unveil a GBP500 million share buyback. Revenue for 2021 rose 2% to GBP7.24 billion from GBP7.11 billion, while pretax profit improved 22% to GBP1.80 billion from GBP1.48 billion. Adjusted pretax profit rose 8.3% to GBP2.08 billion from GBP1.92 billion. Revenue was seen by consensus at GBP7.34 billion for 2021 and adjusted pretax profit at GBP2.14 billion, meaning Relx's results fell short. Relx proposed a 6% uplift to its full-year dividend, taking it to 49.8p from 47.0p, and also said it plans to spend GBP500 million on share buybacks in 2022.
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TotalEnergies said it swung to profit in 2021 due to high oil and gas prices throughout the year. For the fourth quarter of 2021, the Paris-based oil, gas and renewable energy company reported net income of USD5.90 billion, up 24% from the previous quarter and up significantly from the same quarter a year ago, when net income was USD903 million. For the year as a whole, net income swung to positive USD16.37 billion from a loss of USD7.34 billion. The company also said it anticipates hydrocarbon production growth of 2% in 2022. In 2021, hydrocarbon production declined by 2%.
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Credit Suisse reported a drop in revenue in final quarter of a "very challenging" year, with the Swiss bank struggling from reduced risk appetite. In the three months to December 31, the Zurich-headquartered the investment bank and financial services firm recorded a pretax loss of CHF1.59 billion compared to a CHF88 million loss in the same period a year prior. The bank's attributable loss widened to CHF2.01 billion from CHF353 million. "2021 was a very challenging year for Credit Suisse. Our reported financial results were negatively impacted by the Archegos matter, the impairment of goodwill relating to the Donaldson, Lufkin & Jenrette acquisition in 2000 and litigation provisions, as we look to proactively resolve legacy issues," Chief Executive Thomas Gottstein said. The bank is under pressure to restore investor confidence following questions over risk management following last year's Archegos and Greensill scandals. Credit Suisse noted it commissioned a report into its Supply Chain Finance Funds but has "no intention" of publishing the report.
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Prudential said Chief Executive Officer Mike Wells intends to retire from the insurer at the end of March and will not stand for re-election as a director at the next annual general meeting. Prudential said it is conducting a search for a CEO to be based in Asia to succeed Wells, which includes both internal and external candidates. Mark FitzPatrick, currently chief financial officer and chief operating officer, will become interim CEO when Wells steps down. FitzPatrick has asked the board not to consider him for the permanent CEO role, the company said. Along with its next CEO, Prudential said the next CFO also will be based in Asia, saying this is the location of its largest businesses, its group regulator and the rest of its senior management team.
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Zurich Insurance posted a bumper annual performance with income up 34% thanks to improved customer metrics, with the insurance company confident in meeting its earnings guidance for the year ahead. Zurich reported pretax net income for 2021 of USD7.21 billion, up 34% from USD5.40 billion a year prior. Total revenue rose 25% to USD69.87 billion from USD59.00 billion. Gross written premiums increased 10% to USD55.78 billion from USD50.56 billion.
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Disney shares jumped in after-hours trade on Wednesday after the entertainment company a hefty annual rise in subscriptions of its flagship streaming service. In the three months to January 1, revenue jumped 34% to USD21.82 billion from USD16.25 billion a year earlier. Pretax profit jumped to USD1.69 billion from USD46 million. Revenue topped CNN cited consensus of USD20.3 billion. Revenue in its Disney Media & Entertainment Distribution jumped 15%, while it more than doubled in the Disney Parks, Experiences & Products arm. Disney reported sharp subscriber growth in its Disney+ streaming service, beating Wall Street estimates. Subscribers grew 37% annually to 129.8 million from 94.9 million a year earlier. The stock was up 7.8% in pre-market activity in New York on Thursday.
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Uber reported a swing to profit for the final quarter of 2021, leading to a massively narrowed loss for the year as a whole, driven by sharp revenue growth from both ride-hailing and food delivery. For the fourth quarter ended December 31, the San Francisco, California-based firm posted net income of USD892 million, swinging from a loss of USD968 million the same period a year before. This was driven mainly by a USD1.4 billion gain from Uber's equity investments related to the revaluation of the group's Grab and Aurora investments. This was on revenue which grew 83% year-on-year to USD5.78 billion from USD3.17 billion, as gross bookings increased 51% to USD25.87 billion from USD17.15 billion. For 2021 as a whole, Uber's net loss narrowed sharply to USD496 million from USD6.77 billion, on revenue which grew 57% year-on-year to USD17.46 billion from USD11.14 billion.
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Siemens has agreed to sell the mail and parcel business of subsidiary Siemens Logistics to German supply chain-focused technology firm Korber at an enterprise value of EUR1.15 billion. The mail and parcel business includes the design, manufacturing and sales of products and services involved in mail and parcel automation. However, the Airport logistics business will remain part of the Munich-based industrial manufacturing company. The deal is expected to be completed within the year, and is subject to regulatory approval. The sale is part of Siemens's strategy to focus on technology.
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Steelmaker ArcelorMittal reported a record annual profit for 2021, buoyed by the soaring prices of raw materials after a loss the previous year. The company reported net income of USD14.96 billion following a USD733 million loss in 2020. Sales jumped 44% to USD76.57 billion from USD53.27 billion. The group lost its top stop as the world's biggest steel company to China's Baowu in 2020 after the pandemic caused the global economy to sink. Demand for raw materials and commodities soared last year as economies emerged from Covid restrictions, causing prices to jump. "The global economic rebound post initial Covid-19 restrictions being lifted supported buoyant demand in all markets delivering very high levels of profitability," said Chief Executive Aditya Mittal.
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MARKETS
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Stocks were trading flat and the dollar was mixed on Thursday ahead of a key US inflation report. The consumer price index for January is released at 1330 GMT. Annual inflation is expected to have picked up to 7.3% from 7.0% in December, according to market consensus cited by FXStreet. The administration of US President Joe Biden tried to take the sting out of the likely news by predicting the increase but saying inflationary pressure is decreasing.
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CAC 40: down 0.1% at 7,123.09
DAX 40: up 0.2% at 15,505.34
FTSE 100: up 0.2% at 7,658.24
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Hang Seng: closed up 0.4% at 24,924.35
Nikkei 225: closed up 0.4% at 27,696.08
S&P/ASX 200: closed up 0.3% at 7,288.50
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DJIA: called marginally higher, up 5.00 points
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.3%
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EUR: firm at USD1.1445 (USD1.1437)
GBP: up at USD1.3575 (USD1.3551)
USD: up at JPY115.75 (JPY115.44)
Gold: up at USD1,833.10 per ounce (USD1,830.69)
Oil (Brent): soft at USD91.75 a barrel (USD91.90)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's consumer price report will likely show another lofty spike in US inflation in the first month of the year, the White House warned on Wednesday. Consumer prices rose by 7% throughout 2021, their fastest pace in four decades, and the Labor Department's consumer price index data set for release Thursday is anticipated to show a large increase compared to January 2021. "We expect a high yearly inflation reading in tomorrow's data," White House Press Secretary Jen Psaki told reporters. "Above 7%, as I think some are predicting, would not be a surprise." President Biden's approval ratings last year sank amid the spike in inflation caused by a combination of supply chain snarls, component shortages and the US economy's rebound from Covid-19. While the price increases were particularly severe for used cars and energy, particularly gasoline, they also hit items like food and rent. "What we're looking at is recent trends...the inflationary increases are decreasing month to month," Psaki said.
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Canadian Prime Minister Justin Trudeau said the trucker blockades of Canada-US border crossings to protest Covid restrictions are "unacceptable" and a threat to the economy. "Blockages, illegal demonstrations are unacceptable, and are negatively impacting businesses and manufacturers," Trudeau said in the House of Commons in reference to blockades of a bridge connecting Windsor and Detroit and a border crossing in southern Alberta province. "We must do everything to bring them to an end," he added.
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Hopes are rising that efforts to stop Russia from invading Ukraine may be starting to pay off, as the diplomatic push picks up Thursday with German Chancellor Olaf Scholz to meet Baltic leaders in Berlin and UK Prime Minister Boris Johnson heading to NATO and Poland. In the face of the worst stand-off between Russia and the West since the Cold War, diplomatic action has kicked into high gear with European leaders zipping across the continent seeking to defuse the crisis. Ahead of his huddle with Baltic leaders, Scholz said he saw "progress" on the diplomatic front. "The task is that we ensure the security in Europe, and I believe that that will be achieved," he said at a joint press conference with Danish Prime Minister Mette Frederiksen on Wednesday. The new German chancellor, who has been under fire over accusations that he has dithered over the crisis, will travel to Kyiv and Moscow next week for separate meetings with Ukraine and Russia's leaders, including his first face-to-face with President Vladimir Putin.
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Downing Street staff are braced for questions from UK police as detectives investigating lockdown parties in No 10 begin contacting those believed to have been involved. Scotland Yard said by the end of the week officers from Operation Hillman will have started sending out formal legal questionnaires to more than 50 individuals. The events under investigation include a number known to have been attended by PM Johnson, raising the prospect that he will be among those receiving a demand for answers in their inboxes. The announcement came after the Metropolitan Police said they would be widening their inquiries to cover a quiz night in No 10 in December 2020 after a photograph emerged of Johnson's wife and colleagues near an open bottle of sparkling wine. In a statement the force said the questionnaire would ask for "an account and explanation of the recipient's participation" in an event which is the subject of police inquiries.
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By Tom Waite; thomaslwaite@alliancenews.com
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