RBI fines Rs.71 crore on 36 foremost banks for non-compliance in SWIFT

RBI fines Rs.71 crore on 36 foremost banks for non-compliance in SWIFT (Global Messaging Software) operations

  • RBI Stated that the penalties ranging from Rs.1 crore to Rs.4 crore were enforced by orders dated January 31, 2019, and February 25, 2019
  • RBI had carried out an evaluation of compliance with its orders on SWIFT related operations with 36 Banks.
  • Fine of Rs.4 crore each has been enforced on Bank of Baroda, Catholic Syrian Bank, Citibank N.A., Indian Bank and Karnataka Bank.

– TFM Watch

The Reserve Bank of India on Friday stated it has enforced penalties worth Rs.71 crore on 36 public, private and overseas banks for non-compliance with various instructions on time-bound execution and strengthening of SWIFT operations.

SWIFT is a worldwide massaging software utilized for transactions by financial entities. The enormous Rs.14,000-crore fraud at the PNB was an instance of misuse of this massaging software. Bank of Baroda, City Union Bank, HSBC, ICICI Bank, SBI and YES Bank are the few foremost banks in the list.

The penalties were ranged between Rs.1 crore to Rs.4 crore, were enforced by orders dated January 31, 2019, and February 25, 2019, the RBI stated. And added, penalties are based on lacks of regulatory compliance and “is not planned” to pronounce upon the validity of any transaction entered by the banks with their customers.

The RBI had carried out an evaluation of compliance with its orders on implementation and strengthening of SWIFT related operational controls of 50 foremost banks. The evaluation, the RBI stated, uncovered that banks had not followed one or more of the important instructions relating to making of payment messages in the SWIFT and introduction of an extra layer of approval for all payment messages surpassing a specific limit, among others.
On the bases of evaluation conclusions and extent of non-compliance, notices (SCNs) were issued to 49 banks encouraging them to indicate cause regarding why fines should not be enforced for non-compliance with instructions.

“After considering the responses received from the banks, oral submissions made in the personal hearings where sought by the banks and examination of additional submissions, RBI decided to enforce fines on 36 banks, based on the extent of non-compliance in each bank,” the Reserve bank stated.

Fine of Rs.4 crore every ha been forced on Bank of Baroda, Catholic Syrian Bank, Citibank N.A., Indian Bank and Karnataka Bank.

The penalty on BNP Paribas, City Union Bank, Indian Overseas Bank, UCO Bank, Union Bank of India, and United Bank of India, is Rs 3 crore each.

The sum of Rs.2 crore each for Allahabad Bank, Bank of Maharashtra, Canara Bank, DCB Bank, Dena Bank, Jammu and Kashmir Bank, Oriental Bank of Commerce, and Syndicate Bank.

Fine of Rs.1 crore each has been enforced on Bank of America, Barclays Bank Plc, Central Bank of India, Corporation Bank, DBS Bank, Deutsche Bank A.G., HSBC, ICICI Bank and IDBI Bank.

Rs.1crore penalty was included IndusInd Bank, JP Morgan Chase Bank, Karur Vysya Bank, Punjab and Sind Bank, Standard Chartered Bank, State Bank of India, Tamilnad Mercantile Bank and YES Bank.

Source: PTI – Indiatoday

– TFM Watch

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Cabot Oil and Gas Q4 earnings misses estimate; Cash Flow & Reserves Jump

Cabot Oil and Gas Corp missed Wall Street estimates for quarterly profit on Friday

Companies like Cabot, which sells natural gas to industrial customers and power generation facilities, have been trying to increase production from the Marcellus area. The company said it would focus more on developing the Lower Marcellus region.

By Arundhati Sarkar on Reuters

TFM Watch

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Feb 22 (Reuters) – Cabot Oil and Gas Corp missed Wall Street estimates for quarterly profit on Friday, as transportation costs capped its gains from higher gas prices and the company cut its 2019 capital expenditure.

Expenses related to transporting and gathering natural gas for the Marcellus-focussed company rose nearly 18 percent in the quarter to $140.9 million.

Sales price of Cabot’s natural gas, including the impact of derivatives, jumped 43 percent in the quarter to $3.11 per thousand cubic feet.

However, the company lowered its 2019 capital spending to $800 million from a prior forecast of $800 million to $850 million and forecast a 20 percent growth in production.

The Houston, Texas-based company said total natural gas production, which makes the bulk of its revenue, rose to 206.3 billon cubic feet (bcf) in the fourth quarter from 164.4 bcf a year earlier.

It expects first-quarter 2019 production in the range of 2,250 to 2,275 million cubic feet equivalent per day.

Brokerage Williams Capital Group reaffirmed “hold” rating on the company’s stock despite production growth and capex missing its expectations on the back of company’s ability to generate free cash flow and higher yield for natural gas.

Cabot’s fourth-quarter free cash flow was $241.4 million, compared with $28.7 million a year earlier.

“Our free cash flow for the fourth-quarter exceeded our initial forecast of $200 million, driven by stronger than anticipated price realizations,” said Dan Dinges, Chief Executive Officer, in a statement.

The company’s net income was $275 million, or 64 cents per share, in the quarter ended Dec. 31. On an adjusted basis, it earned 55 cents per share, but missed the average analyst estimate of 58 cents.

Operating revenue rose 79 percent to $716.3 million.

Source: Reuters

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Dropbox Inc forecasted drop in current-quarter operating margins

Dropbox expects drop in first-quarter operating margin, shares fall

File sharing and storage company Dropbox Inc shares down nearly 11% on 22nd Feb after forecasting drop in current-quarter operating margins.

TFM Watch

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(Reuters) – File sharing and storage company Dropbox Inc forecast a drop in current-quarter operating margins from a year earlier, sending its shares down nearly 11 percent in extended trading.

The weak margin outlook overshadowed a better-than-expected quarterly profit and revenue, and current quarter revenue forecast that came in above estimates.

“Margin guidance reflects conservatism,” DA Davidson analyst Rishi Jaluria said.

Some investors might be picking on the net additions of 400,000 paying customers, which was above consensus but fewer than last year, Jaluria said. Dropbox added 580,000 paying customers in the year-ago quarter.

Shares of the San Francisco-based company, which rallied more than 25 percent so far this year, were down 10.5 percent at $22.90 in extended trading.

Dropbox forecast first quarter adjusted operating margins between 7 percent and 8 percent, compared to 10.9 percent last year.

The company, which competes with Alphabet Inc’s Google, Microsoft Corp as well as Box Inc, forecast current-quarter revenue between $379 million and $382 million. Analysts were expecting $377 million.

Dropbox said it had 12.7 million subscribers as of Dec. 31, beating analysts’ average estimate of 12.54 million, according to FactSet.

The company reported average revenue of $119.61 per user, beating estimates of $118.8, according to IBES data from Refinitiv.

Started as a free service to share and store photos, music and other large files, Dropbox now offers a range of enterprise software services and is betting on international expansion for user growth.

Last month, the company said it would buy electronic signature company HelloSign for $230 million in cash, aiming to expand its portfolio of workflow-related products.

Quarterly loss narrowed to $9.5 million in Dropbox’s fourth financial report as a publicly traded company, from $37.7 million a year earlier. The company is yet to turn a profit, which is common for startups that invest heavily in growth.

Excluding items, the company earned 10 cents per share, beating estimates of 8 cents.

Total revenue rose 23 percent to $375.9 million, above estimates of $370 million.

Source: Reuters

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Israel’s Wix.com sees 25% revenue growth in 4th quarter 2019

Israel’s Wix.com fourth-quarter profit up, sees 25 revenue growth in 2019

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TEL AVIV (Reuters) – Wix.com, which helps small businesses build and operate websites, posted higher-than-expected fourth-quarter profit and forecast a 25 percent rise in revenue in 2019.

It reported on Wednesday a net profit of 42 cents per share excluding one-time items, up from 16 cents a year earlier. Revenue grew 39 percent to $164 million.

Analysts had forecast adjusted profit of 33 cents a share on revenue of $162 million, I/B/E/S data from Refinitiv showed.

Israel-based Wix offers free basic features for setting up websites but users must pay for extra services such as shopping carts, individual web addresses and site traffic analysis.

The company has 142 million registered users. During the quarter it added 147,000 paid users to reach 4 million premium customers, up 24 percent from the end of 2017.

Wix projects 2019 revenue of $755-$761 million, up 25-26 percent from 2018. Analysts were forecasting revenue of $761 million.

Chief Financial Officer Lior Shemesh said Wix expects to generate free cash flow of about $155 million, from which it will use $15-$20 million for new growth initiatives.

“If there will be upside from those investments it’s not part of our guidance. Potentially there’s an upside,” he told Reuters, noting 2018 was a record year for product launches.

The company has seen strong demand for its paid set of tools Ascend, which was launched in December and allows businesses to connect with and manage customers.

President Nir Zohar said Wix’s main competitor is Squarespace, a private New York-based firm. There has been some recent M&A activity in the sector, with the $2 billion acquisition of Web.com by Siris Capital and Square Inc’s $365 million purchase of Weebly.

For the first quarter Wix, whose shares have jumped nearly 70 percent in the past year, estimates revenue of $172-$173 million, up 25-26 percent from a year earlier.

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Cathay Pacific Airways profit beating expectations; HK$2.3 billion ($293.05 million) for 2018

Cathay Pacific Airways sees 2018 profit beating expectations, shares surge

Shares surged by as much as 6.6 percent to their highest level since June 2018 after the market reopened for the post-lunch session.

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(Reuters) – Hong Kong’s Cathay Pacific Airways Ltd said on February 20 it expected to swing to an annual profit of about HK$2.3 billion ($293.05 million) for 2018, more than double analyst estimates, as it undertakes a turnaround plan.

Shares surged by as much as 6.6 percent to their highest level since June 2018 after the market reopened for the post-lunch session.

Before the announcement, 15 analysts polled by Refinitiv I/B/E/S had on average expected the airline to report a profit of HK$1.1 billion for 2018, up from a HK$1.25 billion loss in 2017, as out-of-the-money fuel hedges rolled off.

The airline said in a statement that its passenger business had benefited from capacity growth and improved revenue management, with average airfare prices up despite competitive pressures.

Cathay, which relies on cargo for about a quarter of its revenue, said the freight business was also strong, with rates up and volumes higher.

The airline last year said US-China trade tensions had not hurt its business but it was keeping a close eye on the situation in case trading volumes shifted.

Cathay and Singapore Airlines Ltd are both pursuing turnaround plans designed to cut costs and boost revenue to better compete against rivals from the Middle East, mainland China and budget airlines.

“The company’s transformation programme has had a positive impact,” Cathay said on February 20.

($1 = 7.8485 Hong Kong dollars)

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Albemarle Corp posted higher than expected 4th quarter profit

Albemarle bullish on lithium outlook after fourth quarter profit

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(Reuters) – Albemarle Corp, the world’s largest lithium producer, posted a higher-than-expected quarterly profit on Wednesday and gave a bullish 2019 outlook, saying it sees nothing that could slow demand for the white metal used to make electric car batteries.

The forecast for sales growth of up to 14% this year comes as anxiety grows among some investors that the race to supply lithium for batteries and other materials could flood the market, hurting profits by decreasing prices.

But the Charlotte, North Carolina-based company in a news release said it is “not forecasting any significant macroeconomic headwinds and have not seen any decline in our customer demand forecasts.”

Albemarle said it expects 2019 sales of $3.65 billion to $3.85 billion. Its shares rose 2.6% to $85 in after-hours trading.

The company reported fourth-quarter net income of $129.6 million, or $1.21 per share, compared to a net loss of $218.4 million, or $1.95 per share, in the year-ago quarter.

Excluding one-time items, Albemarle earned $1.53 per share. Analysts expected earnings of $1.47 per share, according to IBES data from Refinitiv.

Lithium sales rose 18 percent to $341.6 million during the quarter on both higher volume and prices that were up 4 percent from a year ago, the company said.

Lithium is Albemarle’s largest segment, with two smaller units selling industrial chemicals.

Albemarle is expected to discuss its financial performance and outlook during a conference call with analysts on Thursday morning.

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Millicom buys Spain’s Telefonica for $1.65 billion

Millicom spends $1.65 billion on Telefonica Central America mobile businesses

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(Reuters) – Millicom International Cellular, a cable and mobile operator in Latin America and Africa, said on Wednesday it bought the mobile telecommunications assets of Spain’s Telefonica in Panama, Costa Rica and Nicaragua for $1.65 billion.

Telefonica has long been rumoured to want to sell in Mexico and Central America. Millicom’s chief operating officer in Latin America, Esteban Iriarte, declined to comment when asked if Millicom was interested in a presence in Mexico.

Last month, Telefonica said it had reached an agreement to sell its Guatemalan and El Salvadoran operations to Mexican billionaire Carlos Slim’s America Movil.

While Millicom already operates in Panama, Costa Rica and Nicaragua, Iriarte said he does not think the acquisition will raise anti-trust concerns because Telefonica’s business is primarily mobile, while Millicom’s is fixed.

“Both of us are operating in Central America, but in different areas,” he said.

The company is eager to add the Telefonica team to its ranks, he said.

“They have a very good base of people in Central America, and it will give us the chance to incorporate new talent in the company,” he said. “It’s great talent to have in the mobile area.”

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GoDaddy first-quarter revenue forecast misses estimates

(Reuters) – GoDaddy Inc forecast current-quarter revenue on Wednesday that missed analysts’ estimates, sending its shares down more than 2 percent and overshadowing the web hosting company’s strong fourth-quarter results.

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For the first quarter, GoDaddy expects total revenue between $705 million and $715 million, while analysts were expecting $716.3 million, according to IBES data from Refinitiv.

The company also forecast full-year 2019 revenue in a range of $2.97 billion to $3.00 billion, compared with Wall Street estimates of $2.99 billion.

The world’s largest domain name registrar said it had about 18.5 million customers at the end of the fourth quarter, up 6.8 percent compared with a year earlier. Average revenue per user rose 6.6 percent to $148 in the reported quarter.

Net income attributable to the company fell to $42.5 million, or 24 cents per share, in the quarter ended Dec. 31, from $92.6 million, or 54 cents per share, a year earlier.

Analysts were expecting the company to earn 14 cents per share.

Total revenue rose 15.5% to $695.8 million, beating estimates of $693.6 million.

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Shaily Engineering Plastics: A disappointing Q3, but don’t overlook its long-term prospects

MoneyControl Report: Shaily Engineering Plastics: A disappointing Q3, but don’t overlook its long-term prospects.

Highlights:
– After the recent correction, the stock offers value
– Traction in the home furnishing segment will be crucial to overall growth
– Utilisation rate at the medical packaging facility will have a bearing on the margins
– Crude price volatility may impact short-term cash flowsHighest quarterly revenue for four years (since Q3 FY14/15) – US$14 billion, up 8.5% year-on-year (YOY) and 6th consecutive quarter of YOY revenue growth

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Shaily Engineering Plastics, a high-precision polymer processing player, reported a weak set of numbers for Q3 FY19. The stock trades close to its 52-week low and leaves enough room for a re-rating, albeit in the long run.

A growing order book in home furnishing, unique product offerings and impetus towards efficiencies in the medical segment, and steady demand trajectory in other verticals (auto, FMCG, lighting) would be the factors to watch out for.

Exports constitute 70-75 percent of Shaily’s annual turnover. Around 30-35 of the world’s leading original equipment manufacturers procure supplies from the company.

1

Q3 analysis

Positives 

  • Gross margin expanded because of pass-through of raw material costs, which were on an upmove in Q2 in tandem with crude prices

Negatives

  • Sales growth was slower year-on-year (YoY) because of delayed orders and change in inventory policies by the Swedish home furnishing major (SHFM)
  • EBITDA margin contracted due to lack of operating leverage and higher investments for bagging new orders. Net profit margin dipped because of lower other income and a significantly higher tax rate
  • Finance costs increased YoY since debt was taken for funding land acquisition and other capex
  • The target to achieve $100 million in revenue has been postponed by a year to FY21-end

Result snapshot2

Observations

Swedish home furnishing major’s expansion plans in India

SHFM is the world’s largest designer-cum-retailer of ready-to-assemble furniture and home/kitchen accessories. It plans to invest Rs 10,000 crore in India over the next 5-6 years. One of its outlets at Hyderabad is already functional, whereas two more will begin operations over the next two fiscals.

This development assumes importance for Shaily for the following reasons:
– 50-60 % of its revenue is attributable to the SHFM
– It is associated with SHFM for over a decade

– It possesses technical know-how to manufacture products in accordance with the SHFM’s strict standards. So, there are high entry barriers in this category.

Shaily will commence supplies of ‘carbon steel’ furniture to the SHFM from October 2019. The management expects sales of Rs.100-120 crore from this project (involving a capital outlay of Rs 50 crore) by FY21.

Client additions in home furnishing are underway

Starting Q4 FY19, Shaily will begin supplying products to another large Europe-based global department store, whose yearly sales are close to $100 billion and network spans 10,000 stores across countries. Going forward, the order size has the potential to increase substantially.

Demand for medical packages will help derive operating leverage

The healthcare segment is divided into two sub-segments – devices (insulin pens, dermatological pens) and CRC (child-resistant closures and bottles) packaging. Since compliance costs are steep and clients (i.e. pharmaceutical companies) are intolerant towards errors, there are not too many players in this space.

Utilisation rates at the package manufacturing facilities will pick up only when new orders are secured from domestic pharma clients. The CRC facility, at optimum utilisation levels, can add Rs.55-60 crore to Shaily’s top-line. For now, visibility is to the tune of Rs.20-25 crore only.

Higher use of plastics in auto, FMCG and lighting

In the automobile segment, the use of plastics for manufacturing critical components is on the rise within and outside India. The domestic FMCG industry is steadily growing, which results in higher demand for packages. Increasing electrification coverage has helped boost demand for LED lighting. Shaily has business associations with leading brands in these industries.

Cost rationalisation

Labour and power expenses, which rose sharply in 9M FY19, are expected to normalise over the next 2-3 quarters. Consequently, the strain on margin should reduce.

Key risks

– Delays in project implementation from the clients’ end may restrict top-line growth

– Raw material price hikes are passed on the customers, but the amount is received after a lag of 3-6 months. This impacts short-term cash flows

Outlook

– After a poor Q3 performance, the stock is close to its 52-week low
– FY19 will end on a subdued note because of sluggish sale volumes
– The stock trades at 20.2 times its FY20 projected earnings

– Any meaningful uptrend in valuation multiples may be visible only from H2 FY20 (i.e. when incremental orders in home furnishing start translating into revenue)

3

 

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PC maker Lenovo’s Delivers Strong Performance in Q3 profit and beats expectations

Lenovo Delivers Strong Performance with Highest Quarterly Revenue in Four Years and Record Pre-Tax Income.

  • Highest quarterly revenue for four years (since Q3 FY14/15) – US$14 billion, up 8.5% year-on-year (YOY) and 6th consecutive quarter of YOY revenue growth
  • All-time record high PTI of US$350 million – jumped 133% YOY
  • Recorded net income of US$233 million for the fiscal quarter, significantly improved from the net loss of US$289 million in the same quarter of last year
  • Major milestones hit across all businesses:
    • PC and Smart Devices business revenue record high at US$10.7 billion, up 11.6% YOY; continues as undisputed, global #1 in PCs with record 24.6% market share*
    • Mobile Business Group became profitable worldwide for the first time since the Motorola acquisition, with North American volume outgrowing the market by a staggering 40 points and China revenue quadrupling YOY
    • Data Center Group enjoyed continued hyper growth in Hyperscale and Software Defined Infrastructure, and increased its lead as #1 in the world’s TOP500 supercomputer rankings

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HONG KONG (BUSINESS WIRE) – Lenovo Group today announced results for its third fiscal quarter ended December 31, 2018. Lenovo posted its highest group revenue in four years of US$14 billion, up 8.5% YOY (12.8% YOY excluding currency impact). The company reported strong pre-tax income of US$350 million (up 133% / +US$200 million over the previous year) – an all-time record for the company as all businesses continued to report profit improvements.

The Group recorded a net profit of US$233 million for the fiscal quarter, significantly improved from the net loss of US$289 million in the same quarter of last year. Basic earnings per share in the third fiscal quarter was 1.96 US cents or 15.35 HK cents.

“When we set out on our journey of Intelligent Transformation, our goal was to restore and then accelerate Lenovo’s business momentum, while providing our customers and partners with the best technologies in smart IoT, smart infrastructure and smart vertical solutions. We’ve done exactly that and more – our strength and position as the industry’s most prolific global technology organization is firmly established. What I’m most pleased to see is how Lenovo is bucking the current industry trend – we’re strong, have delivered record-breaking results this quarter and are only getting stronger”, said Yang Yuanqing, Lenovo Chairman and CEO.

Business Group Overview:

The Intelligent Devices Group (IDG) posted record revenue and profit; powered by its third straight quarter since inception of revenue growth – up 6.2% YOY to US$12.4 billion.

  • During the quarter, the PC and Smart Devices (PCSD) business under IDG reported US$10.7 billion in revenue, up 11.6% YOY, and sequentially extending the Group’s momentum from the previous quarter. PC revenue grew 16% YOY, outperforming the market by more than 17 points with PTI margin also improving by 1 percentage point. Lenovo maintained its position as the world’s undisputed leader in PC sales with record market share of 24.6%. A focus on high-growth and premium segments saw Workstations, Thin and Light devices, and Visuals revenue outgrow the market by more than 30 points, Gaming by 16 points and Chromebook by over 220 points.
  • The Mobile Business Group (MBG) under IDG posted its first worldwide profit since the Motorola acquisition in October 2014. This notable achievement came from masterful execution on Lenovo’s strategy to reduce expenses, streamline the Group’s product portfolio and focus on core markets. Notably North America saw a breakthrough quarter for the Group with volumes outgrowing the market by a staggering 40 points. Additionally, MBG’s focus on other specific geographies is also showing significant results: Lenovo retains the #2 position in Latin America, despite currency fluctuations and supply constraints. In China, thanks to a range of new products under the Lenovo brand, the Group continued to build on the momentum quadrupling revenue and reporting strong growth in PTI margin.

Lenovo’s Data Center Group (DCG) reported its fifth consecutive quarter of profit growth (PTI margin up 3.6 percentage points YOY) on a 31% YOY increase in revenue to US$1.6 billion. In fact, DCG recorded YOY revenue growth in all geographies, highlighted by triple-digit growth in North America, and double-digit growth in Asia-Pacific, EMEA and Latin America. The NetApp joint venture, which is now operational in China, will further strengthen the portfolio and expand business opportunities. Hyperscale once again served as a significant contributor with triple-digit revenue growth and Software Defined Infrastructure (SDI) revenue grew almost 70% YOY. The Group not only remained #1 on the TOP500 list of supercomputers globally, but also increased its lead.

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HSBC reports net profit at $12.6 billion in 2018

Europe’s biggest bank has reported its net profit jumped 30% in 2018 from the previous year to $12.6 billion.

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Market corrections in late 2018 took a toll on HSBC and many other banks. Net profit in the October to December quarter was $1.5 billion.

By The Associated Press

Europe’s biggest bank has reported its net profit jumped 30% in 2018 from the previous year to $12.6 billion.

The London-based bank, whose profit is mainly from Asia, said its revenue rose 5 percent from a year earlier to $53.8 billion.

Pre-tax profit rose 16% to $19.9 billion, but lagged analysts’ estimates. For the fourth quarter, adjusted pre-tax profit was $3.4 billion, also below forecasts.

Market corrections in late 2018 took a toll on HSBC and many other banks. Net profit in the October to December quarter was $1.5 billion.

HSBC has been carrying out a corporate overhaul designed to boost profitability by focusing on its high-growth markets in Asia while shedding businesses and workers in other countries. Asia accounted for 89.5 percent of pre-tax profit in 2018.

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Ambuja Cements Q4 standalone profit jumps over 58%

Ambuja Cements 4th quarter standalone profit jumps over 58%

 

Analysts on average had expected the company, which is a unit of the world’s largest cement maker LafargeHolcim Ltd, to post a profit of 2.95 billion rupees, according to Refinitiv Eikon data.

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(Reuters) – India’s Ambuja Cements Ltd on Monday posted a 58.8% jump in fourth-quarter profit, exceeding analysts’ estimates, as it logged higher cement sales and a tax benefit.

Standalone profit, which includes a joint operation accounted on a proportionate basis, came in at 5.37 billion rupees ($75.22 million) for the quarter ended December 31, from 3.38 billion rupees a year earlier, the company said.

Analysts on average had expected the company, which is a unit of the world’s largest cement maker LafargeHolcim Ltd, to post a profit of 2.95 billion rupees, according to Refinitiv Eikon data.

During the quarter, the company saw a tax benefit of 3.33 billion rupees.

Cement sales volume rose 4.4% to 6.13 million tonnes, the Mumbai-headquartered cement maker said.

Cement sales for the quarter climbed 5.8% to 27.65 billion rupees.

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JK Tyres Q3 FY19 PAT beat estimates

JK Tyres reported an impressive set of results for the Q3 FY19. The numbers came in ahead of estimates.

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Revenue from operations rose to Rs.2,731 crore as compared to Rs.2,123 crore in the same period previous fiscal, JK Tyre & Industries said in a regulatory filing.

JK Tyre & Industries on Thursday posted over two-fold increase in its consolidated net profit. The consolidated revenue at Rs.2,731 cr grew sharply by 29% YoY and was ahead of our estimates. Demand traction in the aftermarket segment & price hikes lead to the strong topline growth.

The operating margins at 9.7% declined 30 bps YoY and was broadly in line with our estimates of 9.9%. The raw material for the quarter (RM/Sales) is up 300 bps YoY. Strong topline growth led to benefits of operating leverage, which largely offset the impact of the hardening raw material cost.

The EBITDA at Rs.265 cr is up 24.5% YoY and is ahead of our estimates.

The interest cost for the quarter at Rs.131 crore, is up 14% YoY. Tracking the strong operating performance, the adjusted PAT stood at Rs.47 crore, up 123% YoY and comfortably beating our estimates of Rs.42 crore.

JK tyres an exceptional expense amounting to Rs.20.45 cr (unfavorable foreign exchange fluctuation Rs.18.14 cr & VRS – Rs.2.31 cr). The Reported PAT stood at Rs.26.7 cr.

The board of directors have approved issue of equity shares to the promoter group upto an amount aggregating to Rs 200 crore. The issue is subject to required approvals. Other details including the issue price and date is awaited.

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Spicejet reports a 77% fall in Q3 net profit

SpiceJet Q3 profit dives 77% YoY to Rs.55 crore.

  • Net profit falls by 77% y-o-y to Rs.55 crore from Rs.240 crore.
  • Revenue rose by 20.2% y-o-y to Rs.2,487 crore from Rs.2,069 crore.
  • EBITDA fell by 62.7% y-o-y to Rs.113.2 crore from Rs.303.4.

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SpiceJet Q3 profit dives 77% YoY to Rs.55 crore.

Total income stood at Rs.2,530.8 crore as against Rs.2,096.1 crore in the same quarter last year.

SpiceJet reported a net profit of Rs.55.1 crore for the quarter ending December 31, 2018, defying the current market conditions, where other airlines are losing money.

The airline said that passenger yields increased by 8% that partially helped offset record high cost due to an increase of 34% in crude oil prices and 11% depreciation of the Indian Rupee against the US dollar. However, the airline’s profit during the quarter fell by 77% over the same period last fiscal, when the airline had registered profits of Rs 240 crore.

“The combined effect of these cost escalations was approximately Rs.329 crore. The Company also reversed some portion of its provisions on its FOREX obligations taken during the previous quarter for this financial year,” the airline said.

During the quarter, total income stood at Rs.2,530.8 crore as against Rs.2,096.1 crore in the same quarter last year. For the same comparative period, expenses were Rs.2,475.8 crore as against Rs.1,856.1 crore.

“Despite the huge cost escalation in ATF and exchange rate, SpiceJet has done remarkably well thanks to our superior revenue performance, tight control on other costs and the continued confidence our passengers have shown in the airline. With a strong improvement in the macro cost environment and the increasing induction of the fuel efficient MAX aircraft, the outlook looks stronger than it has over the past year,” SpiceJet CMD Ajay Singh was quoted in the media statement.

“With sector headwinds having subsided, we are bullish on our future prospects and will continue to invest aggressively in creating capacity in line with our forecasts. The new generation 737MAX aircraft with its cost efficiencies and increased revenue opportunities (due to superior payload performance) will become a substantial portion of our Boeing fleet further improving our margins. The increased seating capacity on the Bombardier Q400s will also result in improved margins,” the statement added.

SpiceJet has added 12 new planes – nine Boeing 737 MAX 8 aircraft and three Q400s – between October and December 2018 and now operates a fleet of 72 aircraft.

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Eicher Motors Q3 consolidated net profit rises by 2.4% y-o-y

Eicher Motors Q3 profit rises 2.4% to Rs.533 cr, margin below 30% for first time in last 11 quarters

  • Net profit rose by 2.4% y-o-y to Rs.533 crore from Rs.520.5 crore.
  • Revenue surged by 3.2% y-o-y to Rs.2,341 crore from Rs.2,264 crore.
  • EBITDA slipped by 3.9% y-o-y to Rs.679.5 crore from Rs.707.2 crore.

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Eicher Motors Q3 profit rises 2.4% to Rs.533 cr, margin below 30% for first time in last 11 quarters

At operating level, consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) declined for the first time in last eight years and margin fell below 30 percent for the first time since March quarter 2016.

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Royal Enfield maker Eicher Motors third quarter (October-December) consolidated profit grew by 2.4% year-on-year to Rs.533 crore with low revenue growth and weak operating income.

Profit in same quarter last year stood at Rs.530.9 crore.

Revenue from operations in Q3 increased 3.2% to Rs.2,341 crore year-on-year, but Royal Enfield sales volume declined 6 percent YoY against 3.6% rise in Q2.

The company sold 1.94 lakh units during the quarter ended December 2018.

At operating level, consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) declined for the first time in last eight years and margin fell below 30% for the first time since March quarter 2016.

EBITDA dipped 3.9% year-on-year to Rs.679.5 crore and margin contracted 220 bps to 29% in Q3FY19.

Numbers were ahead of CNBC-TV18 poll estimates which were at Rs.497 crore on profit and Rs.2,270 crore on revenue. EBITDA was estimated at Rs.665 crore and margin at 29.2% for the quarter.

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