Rusal, the world’s largest aluminium producer, said yesterday it had bounced back into the black in the second quarter, buoyed by improving metal prices and cost-control measures.
The Hong Kong-listed company reported a profit of $116mn for the three months ending June 30, compared with a loss of $325mn in the previous quarter.
However, it still suffered a loss of $209mn on a six-month basis, although that compared with a $439mn shortfall a year earlier.
It is the first time the firm has reported a quarterly profit since the first three months of last year, according to a filing handed to the Hong Kong stock exchange.
“The market environment is improving,” board chairman Matthias Warnig said in the filing, adding that the second quarter saw “clear evidence of the beginning of a sustained recovery” following a profound dip in prices on the London Metal Exchange earlier this year.
Total quarterly revenue grew 6.5% from the first quarter to $2.26bn thanks to higher prices.
The firm has been working to control costs and enhance margins after it reported in March an annual loss of $3.22bn for 2013.
At the time it said a global economic recovery in the next two years would lead to an uptick in demand.
Aluminium’s price improved to $1,798 per tonne in the second quarter from $1,708 per tonne previously, Rusal said.
Recoveries in advanced economies in Europe and US coupled with expansion in China will fuel global growth, with demand expected to surge 6.5% to 55mn tonnes this year, the filing said.
Tiffany
Upscale jeweller Tiffany & Co raised its full-year profit forecast for a second time following a better-than-expected rise in quarterly profit, driven by strong sales and higher prices for its high-end jewellery in the Americas, its biggest market.
Tiffany’s shares rose 4.9% to a record high of $105.65 in early trading yesterday after the company posted its strongest sales growth in the Americas in nearly two years.
Sales in the region, which accounts for nearly half of overall sales, rose 10%, excluding currency fluctuations, in the second quarter ended July 31 - stronger than the 7% overall growth in the period and the first double digit growth since the third quarter of 2011.
Tiffany had been struggling for the past two years to find the right balance in the US between the pricey jewellery for which it is known and cheaper silver items that generate a quarter of sales.
Gross margin increased to 59.9% in the second quarter from 57.5% a year earlier due to lower raw material costs and higher average selling prices.
Tiffany’s net income rose 16% to $124.1mn, or 96 cents per share. Net sales rose 7.2% to $992.9mn.
Analysts on average had expected a profit of 85 cents per share on revenue of $987.9mn.
Bashneft
Bashneft, a mid-sized Russian oil producer, posted a 20% rise in net profit and its highest average daily oil production in 20 years for the second quarter, but its shares fell as its majority owner was barred from selling.
Bashneft had been considering listing up to $2bn worth of shares in London as early as September.
But parent company Sistema, a conglomerate, has been restricted from selling shares in Bashneft due to an investigation.
Yesterday a court in Moscow overturned an appeal by Sistema and upheld an injunction prohibiting it from selling Bashneft shares, according to reports in local news wires.
Both Bashneft and Sistema declined to comment on the ruling. Bashneft shares were down around 3.5% in Moscow.
Its oil production reached 4.37mn tonnes in the second quarter (352,600 bpd), up 11% compared with the same period last year and its highest output in 20 years, the company said.
Net profit reached 15.9bn roubles ($440mn) in the second quarter, with revenues up 21% at 163.2bn roubles. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 26% to 28.6bn roubles.
Since Sistema became the majority shareholder in 2009, Bashneft has been showing one of the highest production growth rates among Russian oil companies thanks to advanced recovery techniques used at its mostly depleted deposits.
Russian business daily Vedomosti has reported that state-controlled Rosneft, Russia’s biggest oil producer, was interested in buying Bashneft.
National Bank of Canada
National Bank of Canada reported a stronger quarterly profit yesterday, helped by a sharp jump in earnings at its wealth management and financial markets arms.
The Montreal-based bank said its net income rose to C$441mn ($404.59mn), or C$1.24 per share, in the third quarter ended July 31 from C$402mn, or C$1.16 a share, a year earlier.
Excluding special items, earnings were C$1.20 a share. Analysts had expected C$1.11.
Profit from personal and commercial banking, its biggest division, rose to C$190mn, up 6% from a year earlier. The bank said personal lending rose 7%, with the strongest increases coming from consumer loans and mortgages.
At its financial markets arm, net income rose 21% to C$187mn. National said revenue at the unit rose 17% on increases in trading activity revenue, financial market fees and banking services. Net income at its wealth management arm rose 31% to C$64mn, helped by the bank’s acquisition of TD’s institutional services business.
Evraz
Russia’s largest steelmaker Evraz returned to net profit in the first half of 2014 and said its assets in Ukraine remained unaffected by unrest in the country for now.
The company, partly controlled by Chelsea soccer club owner Roman Abramovich, swung to a first-half net profit of $1mn after a loss of $146mn in the same period last year, it said yesterday.
“This is mainly the result of an improvement in business performance,” Giacomo Baizini, Evraz chief financial officer, said in a statement.
Baizini said asset optimisation and cost efficiency measures contributed $193mn during the period, excluding the impact of foreign exchange. Revenue fell 7% to $6.8bn.
In the face of a weak global steel market, Evraz sold a plant in the Czech Republic and a part of a South African asset in the first half of 2014.
The company’s net profit missed the average forecast of $98mn in a Reuters poll of analysts. There was a wide range of estimates due to differences in the expected valuations of foreign exchange fluctuations and one-off items.
George Buzhenitsa, an analyst at Deutsche Bank, said Evraz posted a foreign exchange loss of $180mn and an asset impairment charge of $147mn in the first half.
The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 17% to $1.1bn, beating a $1.0bn forecast.
Evraz warned in April that the Ukraine crisis could hit its business, but said on Wednesday neither its operations nor its assets there had been affected by the unrest to date.
Air New Zealand
Air New Zealand posted a 45% rise in annual net profit yesterday, and predicted more strong growth in the current financial year amid rising demand and easing fuel prices.
The airline said net profit for the 12 months to June 30 was NZ$262mn ($218mn), up from NZ$181mn a year earlier.
In an often volatile industry, chairman Tony Carter said Air New Zealand had achieved its third consecutive year of growth, demonstrating that the carrier “continues to be a world-leading airline, both in terms of customer experience and financial performance”.
“Based on our current expectations of market demand and fuel prices, we expect to improve on the 2014 result in the coming year,” he said.
Underlying the airline’s confidence, it placed a $1.5bn order for 14 medium-range Airbus planes in June.
Carter said the arrival of new aircraft would significantly boost Air New Zealand’s capacity.
The airline’s operating revenue rose one% to NZ$4.7bn, earnings before tax were up 30% at NZ$332mn, and the board declared a final dividend of 5.5 cents a share, as well as a special dividend of 10 cents a share.
The announcement was made before trading started on the New Zealand stock exchange, where Air New Zealand shares last traded at NZ$2.15.
Motor Oil
Greece’s second-biggest refiner, Motor Oil, narrowed its first-half loss, helped by reduced oil inventory losses and lower taxes.
The Athens-based company said yesterday its net loss narrowed to €16.6mn ($21.9mn) from €31.6mn in the same period last year.
The result was below analysts’ average forecast for a €9.4mn loss in a Reuters poll.
Low European industry margins and weak fuel demand in recession-hit Greece have hurt profits at the country’s refiners.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were flat at €61.5mn on the same period last year, but below analysts’ average estimate of €64.7mn. Excluding the impact of a change in oil prices on the value inventories, adjusted EBITDA fell 31% to €68.5mn, at the low end of market expectations.
Sales were almost flat year-on-year, at €4.5bn, with higher exports - about two thirds of the refiner’s total revenues - offsetting weak demand at home.
Greece’s biggest oil refiner Hellenic Petroleum reported a larger-than-expected second quarter loss last month, also hurt by weak margins and volatility in crude oil markets.
Hypo Alpe Adria
Nationalised Austrian lender Hypo Alpe Adria will not need any more state aid before being broken up later this year, with most of its assets to be put into a “bad bank.”
The bank, which has already received around €5.5bn in state aid since 2008, will not now need another €700mn ($924mn) in state aid as originally agreed, a Hypo spokesman said yesterday.
Hypo posted a net loss of €1.67bn yesterday for the first half of the year, mainly due to provisions it had to make in preparation for the sale of its Balkan banking network and the winding down of its Italian business.
Provisions for the Balkan and Italian businesses in the first half of 2014 were €1.44bn.
Air China
Shares in Air China closed higher in Hong Kong yesterday even after the mainland’s flag carrier reported a 55% drop in first-half net profit.
Based on international accounting standards, the company recorded 510.4mn yuan ($82.9mn) in net profit for the first six months, it announced late Tuesday in a filing to the Hong Kong exchange where it is listed.
This compared to 1.14bn yuan in the first half of last year.
Although revenue grew 8.5% year-on-year to 49.9bn yuan in the first half, passenger yield—a measure of the average fare paid per mile by passengers—dropped 3.33% to 0.58 yuan from a year earlier, it said.
The results were in line with a profit warning issued in July, when it forecast a drop of 55-65% caused by foreign exchange losses as the yuan weakened.
Using Chinese accounting standards net profit was 474.38mn yuan ($77.14mn), down from 1.12bn yuan in the same period last year.
Shares in the carrier closed up 0.21% at HK$4.89 ($0.63) per share, while the overall Hang Seng Index ended down 0.62%.
A 2.5% decline in the yuan resulted in a net exchange loss of 721mn yuan, compared with a net gain of 1.1bn yuan for the same period last year, the airline said.
