Tag Archives: makes

AIG makes $4bn loss from unit sale

21 February 2013 Last updated at 21:56 GMT AIG logo AIG reported an operating profit of $290m, which excludes the sale of the leasing business American International Group (AIG) has reported a huge loss from the sale of its aircraft leasing business ILFC.

The insurer reported a net loss of $4bn (£2.6bn) for the last three months of 2012, due to the $4.4bn loss from the ILFC sale.

It had made a net profit of $21.5bn in the same period of 2011.

AIG also said Storm Sandy had been the second most expensive single catastrophic event for it in the US on record, costing $1.3bn after tax.

Despite that, it made an operating profit, which excludes the effects of the ILFC sale, of $290m, compared with $1.5bn in the last quarter of 2011.

“AIG’s operating profit this quarter shows the power and financial strength of our diverse global franchise,” said chief executive Robert Benmosche.

The results were better than had been expected and AIG shares rose 2.5% in after-hours trading.

The fourth quarter was a busy one for AIG, which sold its remaining stake in the Asian insurer AIA in December for $6.5bn.

Also during the quarter the US Treasury sold its remaining shares in AIG for about $7.6bn, repaying the last of its financial support to the insurer.

Coalition water plan leak makes splash in north


An environment group has described a federal Coalition plan to to build dams to irrigate northern Australia as a “vampire that has to be slayed a few times”.


A leaked draft discussion paper identifies 100 possible dam projects around the nation, with a heavy emphasis on irrigating a new “food bowl” in the Top End.


But Dr Stuart Blanch, director of the Northern Territory Environment Centre, says there is a lot of evidence the plan would not work.


“This thing keeps coming back from the dead,” he said.


“I have spent many years trying to kill these dumb ideas, along with many people, including farmers and fishermen, Aboriginal communities, scientists.


“There is room for irrigation development in the north but it’s not the food bowl, there’s just not the scale.”


Dr Blanch says it appears the Federal Coalition is running a strategy of encouraging public discussion about “hare-brained” schemes to develop northern Australia.


“(It seems they are saying) give us all your craziest, biggest ideas, that all the sort of good, solid, scientific reasons have said should never get up, and we’re gonna run with it,” he said.


Dr Blanch is urging the Territory Government to legislate to ensure a dam is never built on the Daly River.


He says that without legal protection there is always a possibility dams could be built on important rivers.


“It would be good to have actual legal protection for the Daly River, particularly to show that we Territorians are going to look after our own rivers,” he said.


Federal Opposition Leader Tony Abbott has told Macquarie Radio that Australia needs to get over its “dam phobia”.


“We don’t have a water problem in this country; we have a water management problem,” he said.


“We need to manage our water better; we need to make better use of our resources.


“We only make use of 6 per cent of our available water resources.


“I think these are things which we have to consider.”


The leaked draft discussion paper, details of which were published in Sydney’s Daily Telegraph newspaper, identifies 100 possible projects that would cost about $30 billion if they all went ahead.


Northern Territory Chief Minister Terry Mills says dams aren’t needed in the north for irrigation.


“What we do need to consider … is planning where our future water supplies for our increased population is going to come from,” he said.


“With all the water we have come out of the sky and flow down our rivers, we sometimes face the prospects of not having enough water to drink.”


The leaked draft document was written by a Coalition taskforce chaired by shadow finance minister Andrew Robb and deputy chair Barnaby Joyce, shadow environment minister Greg Hunt, spokesman on northern Australia Ian MacDonald, spokesman on the Murray Darling Simon Birmingham and Senator Bill Heffernan.


According to the Daily Telegraph report, one of the ideas mooted involves transporting water from the Kimberley region of Western Australia, 1500km south to Perth, using canals, pipelines and ocean super tankers, or large synthetic bags towed behind tug boats.

Topics: political-parties, environmental-management, regional, regional-development, nt, darwin-0800, perth-6000, wa

First posted February 14, 2013 12:05:57

Market makes solid gains but dollar slides


The Australian dollar has continued its slide against the greenback today, as the local share market posted solid gains on the back of confidence on overseas markets.


The Australian dollar has now fallen nearly one cent from where it was trading before the Reserve Bank announced it was keeping the official interest rate on hold yesterday.


The All Ordinaries index finished today’s session 38 points higher, or 0.8 per cent, at 4,941.


The ASX 200 index also gained 38 points to close at 4,921.


Retailers surprisingly posted solid gains, despite official figures revealing that retail trade unexpectedly fell 0.2 per cent in December.


The Australian Bureau of Statistics says the “other retailing” category, including books, fell the most and food retailers, restaurants and cafes also went backwards.


Woolworths rose 2.75 per cent while the owner of rival Coles, Wesfarmers, gained 1 per cent.


JB Hi-Fi closed 5 per cent higher, David Jones picked up 3.7 per cent and department store Myer rose 1.6 per cent.


The big four banks all gained ground, led by a 1.5 per cent rise for ANZ.


Rio Tinto closed 1.1 per cent higher and mining rival BHP Billiton went up by 0.9 per cent.


Seven West Media rose 8.5 per cent but the Ten Network fell 3.1 per cent.


Telstra slipped 0.9 per cent and hearing implant company Cochlear dropped 4 per cent.


Local airlines gained ground, led by a 4.7 per cent rise for Virgin Australia.


Qantas closed 0.7 per cent higher as the airline’s boss Alan Joyce told a tourism lunch in Sydney the continuing high Australian dollar should not be used as an excuse for not attracting overseas visitors.


In commodities, spot gold had weakened to $US1,674 an ounce.


West Texas intermediate crude oil was up slightly to $US96.64 a barrel, but Tapis crude in Singapore slipped to $US122.36 a barrel.


At 5:30pm AEDT, the Australian dollar was buying around $US103.54, 76.34 euro cents, 66.14 British pence, 97.08 Japanese yen and 122.65 New Zealand cents.

Topics: markets, business-economics-and-finance, currency, stockmarket, futures, australia

First posted February 06, 2013 17:57:59

Zuckerberg almost makes list of worst CEOs


Facebook founder Mark Zuckerberg has gone from hero to zero, almost making a list of 2012′s worst chief executives.


Mr Zuckerberg fell just short of the annual list compiled by Dartmouth College business professor Sydney Finkelstein and published by Bloomberg’s Businessweek.


Professor Finkelstein told Businessweek that Mr Zuckerberg almost made the list because of his “massive ego”, as well as his immaturity and the consistent decline in Facebook’s share price since it listed on the share market.


He made similar criticisms of Groupon’s boss, Andrew Mason.


“There’s no reason to believe they have the management skills to run a major public company,” Professor Finkelstein said.


As for those who did make the top five worst CEOs for last year?


Number one was Brian Dunn, who resigned as chief executive of Best Buy in April after allegations of an inappropriate relationship with a younger employee.


However, he was mainly nominated for a falling share price, falling sales, loss of market share and over-priced share buybacks.


Aubrey McClendon from Chesapeake Energy made the list for a series of personal transactions that appeared to involve a conflict of interest with his role as CEO.


Avon’s former chief, Andrea Jung, made the list because her company’s market value has plunged from $US21 billion to $US6 billion since 2004, and management rebuffed a takeover offer worth more than $US10 billion that Professor Finkelstein says looks like good value in hindsight.


Zynga’s boss Mark Pincus made the list because the online and mobile gaming firm saw its share price drop 75 per cent last year.


A European boss rounds out the top five, with former Bankia chairman Rodrigo Rato facing an investigation for practices that may have led to the bank’s collapse and bailout by the Spanish government.

Topics: business-economics-and-finance, corporate-governance, management, united-states

First posted January 18, 2013 13:04:20

Ford makes a concerted pitch for Lincoln

Image Credit: REUTERSJim Farley (C), Ford Motor Co. Group Vice-President Marketing and Sales, speaks while Alan Mulally (R), President and CEO of Ford Motor Company, and former Dallas Cowboys running back Emmitt Smith stand next to the Lincoln MKZ mid-size sedan during a press conference in New York December 3, 2012.

Detroit: Ford Motor Co wants to place its lagging Lincoln nameplate back on consumers’ shopping lists with an ambitious marketing campaign that draws on its heritage and includes the upscale brand’s first-ever Super Bowl spot.


The campaign blitz features a 60-second TV commercial that opens with an image of an actor playing Abraham Lincoln, the US president after whom the brand is named. Ford has also renamed the brand the Lincoln Motor Co, which was its original name when Ford purchased it in 1922.


The moves are part of the second-largest US car maker’s latest effort to reinvent Lincoln two decades after its sales peak. Lincoln faces challenges in the increasingly competitive US luxury vehicle market.


In 2011, Lincoln sales were 85,643 — less than half the amount sold by Lexus, Toyota Motor Co’s upscale brand. “Nobody is waiting for the next ad message from Lincoln,” Matt VanDyke, director of global Lincoln marketing, said. “We have to shout from the rooftops.”

Article continues below


Under chief executive Alan Mulally, Ford pruned its stable of brands over the last six years to pay for its financial turnaround. Ford initially focused on its mainstream line-up but in the last few years began to turn its attention to Lincoln.


By 2015, Ford will launch seven new or revamped Lincolns, starting with the new MKZ sedan, which will be in dealerships by the end of this month.


Mulally and Jim Farley, Ford’s global marketing chief and new head of Lincoln, marked the campaign’s launch in New York’s Lincoln Centre Plaza on Monday.


Ford is determined to show a different side to a brand that is known mostly for the discontinued Town Car. The goal is to attract younger, more progressive buyers by offering fresh designs, personalised service and glossier showrooms.


“I think we are well on our way and especially with the proof point of the first vehicle here today,” Mulally said.


A commercial during the Super Bowl, the most heavily watched annual event on US television, is designed to quickly reach a large, broad audience and highlight the brand’s new direction. “The Super Bowl is such an unusual and attractive venue for a brand that is really rebuilding itself,” Farley said.


Ford is aiming for the new MKZ sedan to command a more than 50 per cent “conquest rate”. Currently, more than 40 per cent of Lincoln’s current buyers come from other luxury brands. The MKZ competes with Cadillac’s CTS and the Lexus ES.


Ford wants to lower the average age of Lincoln buyers to 57 from 65 years old, and raise the target average income more than 50 per cent to nearly $160,000 a year.


“This is how Lincoln started. This is how we will become great again,” Ford says in print advertisements that began appearing in major newspapers and online media.


“We can’t do this one person at a time by word of mouth,” VanDyke said. “We do need to get noticed by the masses.”


Lincoln is partnering with late-night talk show host and comedian Jimmy Fallon to spark interest ahead of the Super Bowl on social media networks like Twitter. Fallon has more than seven million followers, while Ford has about 173,000.


Fallon reaches a different demographic for Lincoln, which has featured Mad Men actor John Slattery in its television advertisements for the last two years.


Ford’s smaller rival, Chrysler Group LLC, has benefited from its iconic Super Bowl ad in 2011 that featured the tag line “Imported from Detroit.” Ford decided not to advertise during the 2012 National Football League championship game.


The 2013 Super Bowl game will be broadcast by CBS Corp , which is selling 30-second ads for as much as $4 million.

Market makes second day of strong gains

Posted November 20, 2012 19:17:37

A rally in mining stocks has led the share market to its second straight day of strong gains.

The All Ordinaries closed up 25 points at 4,408, and the ASX 200 matched that gain adding just over 0.5 per cent to 4,386.

The market got off to a positive start after Wall Street closed firmer, following upbeat housing data and the belief legislators would reach an agreement to avoid the fiscal cliff.

Major miners BHP Billiton and Rio Tinto added more than 1 per cent, while some smaller operators saw gains of over 5 per cent during trade.

Rare earths miner Lynas ended 4 per cent higher after the company told shareholders it expects to start its processing plant in Malaysia next month, as environmentalists held campaigns outside its AGM against the plant.

Shares in uranium miner Paladin leapt 9 per cent.

The banking sector was a drag on the market.

Fortunes were mixed among the big four, with Westpac and NAB rising more than 1 per cent but ANZ and Commonwealth both falling close to 0.5 per cent.

The Reserve Bank released the minutes from its November board meeting, and most commentary was a repeat of the statement of monetary policy the bank released last week.

But one key line, that “further easing may be appropriate in the period ahead”, has many economists saying the cash rate will be cut in December.

The market is now pricing a 60 per cent chance of a cut.

The Australian dollar could be set to join the big league, with the IMF considering classifying the Australian dollar as an official reserve currency.

The move is a sign of the dollar’s rising importance and demand for it from foreign banks.

The Australian dollar had dipped following the release of the RBA’s minutes but had since recovered.

Just before 5:30pm AEDT it was buying 104.05 US cents, 81.3 euro cents, 65.4 British pence and 84.6 Japanese yen.

West Texas crude continued to climb to $US89, while Tapis was up $3 a barrel to $US116. Spot gold climbed to $US1,733 an ounce.

Topics: markets, business-economics-and-finance, australia

CBA makes $1.8b in three months

Updated November 07, 2012 09:02:16

The Commonwealth Bank has posted an unaudited profit of around $1.8 billion for the three months to September.

In its quarterly trading update, the bank says its interest margins had remained stable overall, however it had increased margins in its retail banking business, and lower commercial banking margins.

CBA’s bank’s preferred measure of cash earnings was broadly in line with the estimated statutory profit, at $1.85 billion.

The cash earnings result is just under 6 per cent higher than it was in last year’s September quarter update, when the bank posted unaudited earnings of $1.75 billion.

CBA says it has managed to restrain costs to maintain its profitability.

It also notes that loan arrears and bad debts have been stable to slightly lower, with impaired loans making up about 21 basis points of the total portfolio, or about $291 million.

CBA says its loan growth remains largely funded by deposits, which now account for 63 per cent of total funding.

Topics: money-and-monetary-policy, banking, business-economics-and-finance, company-news, australia

First posted November 07, 2012 08:58:00

Consumer confidence makes surprise jump

Updated November 14, 2012 15:46:55

There has been a surprise jump in consumer confidence, as the many interest rate cuts delivered through the year finally begin to sway households.

The Westpac-Melbourne Institute consumer sentiment index rose by 5 per cent in November to 104.3.

That is the highest level in a year-and-a-half, and just above the 100 level that suggests there are more optimists than pessimists in the economy.

Westpac chief economist Bill Evans says the boost comes after consumer sentiment remained stubbornly low through the year.

“The long run of interest rate cuts – 150 basis points from the Reserve Bank over the last 12 months – is starting to get some traction,” he said.

Mr Evans says sentiment was also likely lifted by the re-election of US president Barack Obama, with a large jump in confidence among 18 to 24-year-olds.

He has described it as a surprising and welcome result, but he is not popping the champagne corks just yet.

“I think it would be way too early to suggest that we’re going to get sustained improvement as a result of this one-off result,” he said.

Mr Evans still expects the Reserve Bank to cut rates in December, as several other indicators suggest weakness in the economy.

Well what it tells us is that the index is back at its highest level since April last year and it also tells us that the 150 basis points of cuts to the cash rate is starting to provide some traction in the economy, so the index is back above 100 at 104 – meaning optimists are outweighing pessimists.

So if you look at the cash rate down to 3.25 per cent, that’s helping consumers, but globally, people are feeling a bit less worried about the debt crisis in Europe and also, the survey show the re-election of president Obama last week was well received, especially by young people.

But Westpac’s chief economist Bill Evans says that while the improvement in confidence is welcome, it doesn’t mean the Reserve Bank is finished with its rates cutting strategy.

Despite the boost to consumer sentiment the latest survey of company directors has found that confidence is at its lowest level in two years thanks to the slowing local and global economies.

The Australian Institute of Company Directors spoke to more than 500 directors and found that sentiment had dropped dramatically compared to the first half of the year.

Forty per cent of directors think the Australian economy is weak, two thirds expect the economy to slow down.

Institute head John Colvin told The World Today that directors still remain concerned about the state of the global and local economies.

“Well I think it’s the combination of the high Australian dollar, global economy, consumer confidence and then building in or either effecting those three issues are policy and regulations which make jobs basically harder to do as a director,” he said.

The chances of a rate cut have also been buoyed by a modest rise in wages.

Bureau of Statistics data shows public and private sector wages rose an average 0.7 per cent over the September quarter.

ANZ senior economist Riki Polygenis says it is down from the 1 per cent rise the previous quarter, which is what the Reserve Bank has been hoping for.

“This should give them some comfort that inflationary pressures stemming from the labour market will stay sufficiently curtailed into 2013, so that does pave the way for further rate cuts should they see it necessary on the basis of weakening conditions in the non-mining sector,” she said.

The Reserve Bank has been hoping for wage growth to slow to keep inflation low.

Ms Polygenis says it is a win for workers and the RBA

“Workers are still benefitting from an increase in their wages, even if it is a bit more moderate than what we have seen in previous quarters,” she said.

“But at the same time it will be consistent with the RBA’s expectation that inflationary pressures will start to come off in 2013.”

Topics: consumer-finance, business-economics-and-finance, economic-trends, australia

First posted November 14, 2012 14:14:24

JWTs Mansoor Karim makes Pakistan Power 100 list


KARACHI: JWT Pakistan CEO Mansoor Karim Shaikh has been named one of Pakistan’s most powerful and influential people in the inaugural Pakistan Power 100 list, alongside cricketer-turned-politician Imran Khan, Ehsan Malik, Chairman Unilever Pakistan, and Lord Nazir Ahmed, a member of the House of Lords and the UK’s first Muslim life peer.


The Pakistan Power 100 was created by UK-based consulting company Carter Anderson Group, which publishes the Global Power 100. Over 33,000 nominations were received for the Pakistan Power 100, which was judged by a panel led by Pakistan-born investor and BBC’s “Dragon’s Den” star, James Caan.


The Pakistan Power 100 winner’s book, which was launched at a black-tie event in London on September 29, includes messages from British Prime Minister David Cameron and Pakistan President Asif Ali Zardari, who describes the Power 100 as “role models” whose “remarkable achievements are a source of inspiration for other Pakistanis.” “I am incredibly honoured and humbled to be included on this list,” said Mansoor.**

New Zealand makes Hobbit coins legal tender

Updated October 11, 2012 09:45:03

New Zealand will release commemorative Hobbit coins worth thousands of dollars ahead of next month’s premier of director Peter Jackson’s latest Tolkien epic.

The coins featuring characters such as Bilbo Baggins and Gandalf the wizard will be legal tender in the country, New Zealand Post said, although their face value will be only a fraction of the cost collectors will be expected to pay.

The most expensive, made from 28.3 grams of pure gold, will set Tolkien enthusiasts back NZ$3,695 ($3,020) but has a face value of just NZ$10, while the cheapest is a NZ$1 coin retailing for NZ$29.90.

The coins go on sale from November 1 and New Zealand Post said it expected strong international interest in the build up to the premiere of the first of the three Hobbit movies in Wellington on November 28.

Jackson, who was responsible for the Oscar-winning adaptation of Tolkien’s The Lord of the Rings trilogy, announced earlier this year that he would make three films from The Hobbit book, rather than two as originally planned.

British actor Martin Freeman, from The Office, takes on the central role of Bilbo Baggins, who is swept into an epic quest to reclaim the lost Dwarf Kingdom of Erebor from the fearsome dragon Smaug.

Other big names appearing include Cate Blanchett, Ian McKellen, Barry Humphries, Stephen Fry, and Billy Connolly.

New Zealand enjoyed a huge tourism boom after the original trilogy and is hoping to repeat the success with the Hobbit movies, launching a campaign branding the country “100 per cent Middle Earth” to coincide with the premiere.

AFP

Topics: film-movies, fantasy-films, currency, offbeat, new-zealand

First posted October 10, 2012 21:26:03

Good economy makes up for adverse political developments in Kuwait

Extraordinary economic facts help compensating Kuwait for adverse political developments. Reference is made to last week’s decision by the country’s ruler of dissolving the parliament for the sixth time in six years.

Certainly, this fact about calling for new elections tells a great about the state of politics in Kuwait. Anyway, as per a constitutional clause, fresh elections should take place within 60 days at a time of tense political tensions.

The controversial move followed weeks of political uncertainty amidst protests by the political elite for serious democratic reforms. Their demands include having an elected premier as well as providing the legislative branch all necessary tools to ensure oversight of the government, public finance and management of resources, notably the significant oil sector.

The argument goes that exceptional economic realities are not allowing the country to drift away into further problems on the back of political turmoil. The country is run on a patronage basis with the government providing numerous subsidies to the locals including jobs.

Article continues below

Suffice to say that governmental departments and enterprises associated with the state account for 92 per cent of employment opportunities for Kuwaiti nationals. What’s more, the state of public finance allows for employment of new Kuwaiti entrants to the job market.

Happily enough, plenty of evidence point to outstanding economic realities in the country. For instance, Kuwait registered a record $47 billion (Dh172.58 billion) in fiscal year 2011-12. The surplus marked the 13th consecutive year in a row in which the country registered a budgetary surplus. In retrospect, the previous highest surplus of $33.2 billion was posted in fiscal year 2007-2008. Interestingly enough, during the said fiscal year oil prices reached a record $147 per barrel.

Similar to the fellow Gulf Cooperation Council (GCC) state of Qatar, fiscal year in Kuwait runs from April to March. The practice allows for preparation of the budget on the basis of facts established following the start of the year.

Still, budgetary surplus would most likely be repeated in fiscal year 2012-13 if only for assuming conservative average oil price of $65 per barrel. Approved by the cabinet only recently due to political turmoil, the budget assumes a shortfall of nearly $26 billion on spending of $75.6 billion.

These economic facts contribute to another economic ending, namely, satisfactory sovereign ratings, For example, Standard & Poor’s (AA-) rating with stable outlook. The rating falls within the top level of investment grades and therefore provides an indication about economic direction. Also, Kuwait boasts ratings of (Aa2) by Moody’s and (AA2) by Fitch, certainly all within investment grades.

In fact, Kuwait stands out amongst GCC countries with regard to some key statistical performance, notably the magnitude of fiscal and trade surpluses. For example, according to 2010 figures, fiscal surplus in Kuwait amounts to more than 22 per cent of the gross domestic product (GDP).

Saudi Arabia ranks a distant second with fiscal surplus amounting to nearly 7 per cent of the GDP. Still, stronger budgetary surpluses mentioned above allow for expanding rather than narrowing statistical performance.

In addition, current account surplus represents some 28 per cent of the GDP in Kuwait, undoubtedly the highest within amongst GCC states. Qatar follows suit with a surplus standing at 25 per cent of GDP.

Certainly, other positive facts only add to the exceptional state of Kuwait’s economy. Amongst others, inflation is not a threat at the moment.

Nevertheless, it would be possible for Kuwait to appreciate its potential if its economic and political matters collectively are in the right direction. Only the future can tell that.

YouTube show makes it to national TV

San Francisco: The US TV network ABC will, in October, start broadcasting a cooking show that began as part of YouTube’s Original Channels initiative, the first such deal to take a YouTube-funded programme to national TV.

For Google-owned YouTube, the deal is a milestone in its effort to rebrand itself as a place to watch high-quality video, able to compete with traditional TV for advertising dollars as well as audiences.

The deal comes nearly a year after YouTube launched a $100 million campaign to shed its image as a repository for blurry, home-made cat videos, by paying producers to make slick, professional programmes like Recipe Rehab, the show that will make the jump to TV.

Although episodes will be re-shot for the 22-minute TV format, the show is being helmed by the same executive producer as the web version, and two of its star chefs from YouTube will migrate to the small screen.

Article continues below

“Recipe Rehab is the latest example of how creators are now harnessing the combined attributes of TV and the web to build scaled, engaged audiences,” said Alex Carloss, YouTube’s global head of original programming.

Recipe Rehab, which teaches viewers familiar recipes, will be broadcast on Saturday mornings on 200 ABC-affiliate stations across the US, and also continue as a standard YouTube channel.

Eni makes significant gas discovery

KARACHI: Eni has made a significant gas discovery onshore Pakistan, in the Badhra Area-B exploration concession, located in the Khirtar Fold Belt region, 350km north of Karachi, said a statement on Wednesday.

The Badhra B North-1 exploratory well, which led to the discovery, was drilled at a total depth of 2,450 metres and encountered over 54 metres of net gas pay in two thick cretaceous sandstones of the Mughal Kot Formation, it said.

During the production test, the well flowed high quality gas from the two reservoirs, respectively at 25 and 35 million standard cubic feet per day (mmscfd).

The size of the discovery is currently estimated between 300 and 400 billion cubic feet of gas in place and its delineation will require further appraisal wells, according to the statement.

The discovery is located 20km east of the Bhit gas processing facility, operated by Eni, which currently handles the gas production from Bhit and Badhra fields.

The drilling of Badhra North B-1 is part of the Eni’s new strategy in Pakistan, which aims at refocusing exploration activities in the neighbouring areas to productive fields and confirms the presence of significant exploration potential that can be exploited through the application of new geological models.

Eni has started discussions with the Pakistani regulator and the joint venture in order to speed up the production of the discovery through a long-term production test that will allow the commercialisation of gas, and helps reduce the national gas deficit, it said.

The short time-to-market for the development of the field is part of the Eni’s strategy to focus on the rapid development of conventional and synergistic assets.

Eni, through its subsidiary Eni Pakistan Limited, is the operator of the bloc with a 40 percent stake in the development phase, together with partners Premier Oil Plc., having six percent, Kufpec Pakistan Limited with 34 percent and Oil and Gas Development Company Limited (OGDCL) having 20 percent.

Corporate results: Pakistan Petroleum makes Rs41 billion in fiscal 2012

Oil and gas explor­er sets aside Rs5 billio­n for asset acquis­ition.  The board also declared a full year bonus of 25% and cash dividend of Rs6.5, taking the full year dividend to 11.5 per share.

KARACHI: 

Pakistan Petroleum Limited (PPL), the country’s second largest oil and gas explorer, profits soared 30% to Rs40.9 billion in fiscal 2012 on the back of higher oil and gas volumes and its prices.


The explorer benefitted from the 19% increase in oil price and 3% to 4% jump in gas price, said BMA Capital analyst Furqan Punjani.


Pakistan is an energy deficient and natural resource rich country, the ideal working climate for oil and gas explorers, according to experts.


The explorer set aside Rs5 billion each for asset acquisition and insurance reserve, says a notice sent to the Karachi Stock Exchange on Monday. The asset acquisition reserve reached Rs25 billion with the latest addition, shows the balance sheet.


In the most recent venture, Pakistan Petroleum was awarded exploration blocks in Diyala and Wasit provinces in eastern Iraq.


Earlier, PPL and Zhenhua had entered into a joint venture to participate in Iraq, and were expected to make an investment of $200 million, however, the Chinese firm has decided not to proceed due to security issues in Iraq.


Along side the result, the board of directors in its meeting also announced a full year bonus of 25% and cash dividend of Rs6.5 per share, taking the full year dividend to 11.5 per share.


The outgoing period proved to be an eventful year for PPL where higher average oil prices coupled with incremental oil volumes from fields like Nashpa, Mela, Kandhkot surfaced as major profit drivers.


PPL’s oil production is estimated to grow 10% with the commissioning of Nashpa-2. Production from the field shot up by 58% on a yearly basis and constituted 27% of the company’s total oil production during the outgoing financial year. On the gas front, production is anticipated to rise by 2% with Kandkhot field’s rise of 30% fuelling growth.


Resultantly, the company’s revenue grew by 23% to Rs96 billion in fiscal 2012 mainly on the back of improved gas prices and dollar appreciation.


The growth in topline was well complemented by 2.6-fold increase in company’s other income to Rs11.6 billion against Rs4.5 billion last year.


Stock price reacted positively and rose its upper daily limit of 5% to close at Rs215.34 on the announcement of a strong payout.


Published in The Express Tribune, August 14th, 2012.

Corporate results: MCB Bank makes Rs11 billion in six months

Sector focus shifts to trimmi­ng non-perfor­ming loans.  MCB Bank is one of the largest private sector banks in Pakistan with over 1,130 branches and 4.5 million customers. PHOTO: FILE

KARACHI: 

MCB Bank has made profits of Rs11.33 billion during January to June 2011 on the back of bad loans shrinking to one-fourth.


Provisioning expense has fallen sharply by 81% to Rs400 million from Rs2.4 billion and emerges as the key profitability driver, said Global Securities analyst Syed Saquib Ali.


This decline is primarily from prudent management of the bank, as it has done subjective provisioning which is resulting in reversal and stagnation in non-performing loans, according to Arif Habib Research.


The 7% increase in bottom-line from the preceding period is in line with market estimates.


The board of directors meeting chaired by the country’s richest person Mian Mohammad Mansha on Tuesday also announced a dividend of Rs4 per share, taking the total payout to Rs7 per share. The payout ratio currently stands at 57% in the first six months, up from historical annual payout ratio of 50%.


The State Bank of Pakistan’s move to increase minimum rate on savings account from 5% to 6% in May has hit the bank’s net interest income – the bank’s core earnings – hard.


Net interest income declined by 6% to Rs20.9 billion during the period under review against Rs22.2 billion in the same period last year.


The bank has adopted a conservative strategy and channeled most of its growth in deposits towards investments particularly in government treasuries, according to BMA Capital.


As a result during the first quarter, the bank’s net advances to deposits ratio (ADR) dropped significantly 45% from 56% in the same period last year. The resultant slow down in non-performing loan accretion is expected to lead a whopping 87% decline in provisioning charge during the period under review. Additionally, having provided for 81% of its non-performing loans the banks asset quality is termed best among its peers.


Non-mark up income was a positive surprise, surpassing market estimates by 13% and depicting growth of 25% on higher fees and dividend income.


Non-mark up expenses stood at Rs5.2 billion during January to June 2012 compared with Rs4.2 billion in the same period last year.


The bank has booked capital gain on securities worth of Rs669 million and more than double dividend income of Rs797 million.


The result did not have much impact on the stock price as it fell Rs0.84 to close at Rs184.77 and followed its fellow peers during trade at the Karachi Stock Exchange. 16 of the total 23 banks listed on the stock exchange closed in the negative zone.


The stock has gained 51% in 2012 till date and outperformed the bourse by 22%. The stock received its latest boost from news that Mian Mohammad Mansha earlier this month said that he is keen to launch banking services in India.


According to an article published in The Economic Times, the State Bank of Pakistan is examining a proposal from MCB Bank to open at least three branches in Delhi, Mumbai and Amritsar.


Published in The Express Tribune, August 8th, 2012.

Swiss chemical process makes eco-friendly jeans

The techni­que can produc­e a pair of jeans using up to 92 percen­t less water, up to 30 percen­t less energy. The dying technology, known as Advanced Denim, was described at the 16th annual Green Chemistry & Engineering Conference.

WASHINGTON: It takes lots of water and chemicals to make a pair of jeans, and environmentally conscious clothing makers caught on years ago to the need to make more sustainable versions these popular pants.

But a Swiss chemical company said Tuesday its process for making eco-friendly jeans could streamline those efforts, saving enough water to cover the needs of 1.7 million people per year if one quarter of the world’s jean-makers started using it.

The dying technology, known as Advanced Denim, was described at the 16th annual Green Chemistry & Engineering Conference, sponsored by the American Chemical Society’s Green Chemistry Institute.

Miguel Sanchez, a textile engineer at Clariant, said the technique can produce a pair of jeans using up to 92 percent less water and up to 30 percent less energy than conventional denim manufacturing methods.

Traditional techniques may require as many as 15 dyeing vats and a host of chemicals, while Advanced Denim uses one vat and a new kind of liquid sulfur dye that requires just one sugar-based reducing agent, he said.

The process, if used on a wide scale, could save 2.5 billion gallons of water per year, prevent the release of 8.3 million cubic meters of wastewater and save up to 220 million kilowatt hours of electricity, he added.

“Advanced Denim wants to go beyond the technologies that are today considered standard for obtaining denim material,” Sanchez said.

Many other companies, including denim-giant Levi-Strauss, already make their own versions of eco-friendly jeans that use less water, are made with organic cotton, or use natural dyes. These products remain a niche market, however.

Jeans, particularly those that are distressed to appear as if they have been worn, have come under fire in recent years for wasting water, overusing harmful chemicals and using sandblasting that can endanger workers’ health.

PPL makes ‘unauthorised’ investment of Rs31b

Compan­y argues its board has full powers to make rules of operat­ions. Company argues its board has full powers to make rules of operations. PHOTO: PPL

ISLAMABAD: 

The Auditor General of Pakistan (AGP) has unearthed that state-owned oil and gas explorer Pakistan Petroleum Limited (PPL) invested an amount of Rs30.92 billion in various bank deposits, term finance certificates (TFCs), Pakistan Investment Bonds (PIBs) and mutual funds without getting the approval of the Finance Division.

According to the policy guidelines of the Finance Division, released on July 2, 2003, dealing with deposits of working balances and investment of surplus funds belonging to public sector enterprises and local/autonomous bodies, working balance limit of each organisation is to be determined with the approval of the administrative ministry in consultation with the Finance Division.

According to an audit report, during the review of PPL records for the year 2010-11, auditors observed that the management of PPL invested funds worth Rs30.925 billion as of July 23, 2010 in various bank deposits, TFCs, PIBs and a nominal amount in mutual funds.

“Audit was of the view that the management should ensure complete compliance with the investment procedural requirement laid down in the subject policy circulated under the Finance Division,” the report said.

The auditors sought records pertaining to determination of working balances for 2010-11 and approval of competent forum in terms of guidelines issued by the Finance Division.

The PPL management, in a letter issued on December 27, 2011, stated that after approval of the board of directors, the company kept liquid funds against insurance of Rs19 billion and asset acquisition reserve of Rs25 billion. It said the company required substantial amounts to be spent on exploration in new blocks.

The management, in other replies dated February 7 and 24, 2012 told the auditors that the company’s operational activities varied from month to month based on the work programme for each period.

The working capital balance at any point of time ranges between Rs2 and Rs3 billion and fluctuates extensively based on exploration commitments and the operating and development programme.

“Therefore, it may not be possible to classify the company’s funds between the working balance required for operation and surplus funds. Furthermore, according to the Finance Division expenditure wing, PPL’s board has full powers under the companies ordinance to make own rules for operations,” the company management stressed.

Published in The Express Tribune, May 6th, 2012.