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reports that European Central Bank officials may consider as soon as today
which concessions they are prepared to grant Ireland to lower the cost of the
nation’s bank bailout, according to two people with knowledge of the matter.
Patrick Honohan, Irish Central Bank
governor, will meet his European counterparts for the
first time since they rebuffed an initial bid to cut the burden of Anglo Irish
Bank’s rescue two weeks ago. He will likely pitch a new proposal during an
unofficial dinner preceding the ECB’s Governing Council meeting tomorrow,
according to the people, who declined to be named because the matter is private.
While Honohan’s plan will continue to include the
replacement of the so-called promissory note the government issued in 2010 with
a long-term bond, he’ll drop a proposed guarantee that the Irish central bank
would hold the security for at least 15 years, the people said. A decision may
be made as soon as tomorrow, one of the people said.
Aer Lingus today reported that full-year 2011 revenues rose by 8.2%
to €1.39bn from €1.29bn in 2011.
Operating profits before exceptional items surged 40.7% to €69.1m from
€49.1m. However pre-tax profits for the year to the end of December fell by
51.9% to €40.6m from €84.4m.
Christoph Mueller, Aer Lingus' CEO commented: "2012 was an excellent
year for Aer Lingus. We made an operating profit for the year which is 40.7%
above 2011. Our operating margin, as a measure of our competitiveness, has
increased to 5.0% with free cash flow of €75.2 million. Improved processes and
service delivery are reflected in a record on-time arrival performance of 88%
and a high customer satisfaction level. At 31st December 2012, the number of
forward passengers booked on our services was ahead of the figure booked at the
same time in 2011 and in January 2013, we recorded the single highest day of
revenue booked in our history.
I firmly believe that this result, representing our third consecutive year of
profitability, validates our value carrier business model and shows that our
strategy is delivering a leaner, more efficient and profitable airline, to the
benefit of customers, shareholders and staff. Therefore we are proposing to pay
an increased dividend of 4 cent per share for 2012."
Total flown passenger numbers, including Aer Lingus Regional operations,
increased by 3.6% to 638,000 in January 2013 compared to January 2012.
Short haul flown passengers, including Aer Lingus Regional, in January 2013 were
583,000, an increase of 2.8% on January 2012, while long haul flown passengers
in January 2013 were 55,000, an increase of 12.2% on January 2012.
Aer Lingus mainline’s flown passenger load factor in January 2013 increased by
2.3 points on January 2012 to 64.6%. Short haul flown load factor was 62.7%, an
increase of 0.2 points on January 2012, with capacity decreasing by 4.4%. Long
haul flown load factor was 68.2%, an increase of 6.4 points on January 2012,
with capacity increasing by 2.9% on prior year.
Dónal O'Neill of Goodbody commented:
Aer Lingus Impressive FY12, cautious
but confident FY13 outlook; "Aer Lingus has delivered an impressive set of
results for FY12 driven primarily by a very
strong revenue performance on both short haul and long haul. Revenue for the
year was up
8.2% to €1,393m. Passenger revenues grew by 8.1% to €1,336m, primarily due to a
increase in yields. Short haul revenue grew by 4.5% to €816m on a 3.8% increase
while long haul fare revenue was up by 19.7% to €344m on a 9.6% increase in
Ancillary revenues climbed 4.6% to €177m due to the introduction of the sky
deli menu on
board and the flexi-fare family. Cargo revenue rose 7% due to export led cargo
long haul flights.
On the cost line, the fuel bill was again a major headwind, rising 24% to
€359m, while nonfuel
expenses increased by just 1.5% to €966m due to further cost savings from the
Greenfield programme. In total, Greenfield has now achieved cost savings of
equates to 7.9% of total revenue. The airline has to date hedged 57% of its FY13
requirement at $994/mt and its dollar requirement at €1 = $1.35. Given its
tonnage requirement of c.450k tonnes for the current year, we would expect the
fuel bill to
remain broadly flat for FY13. Additionally, management expects a €15m headwind
increased airport charges in Dublin, Heathrow, Italy and Spain.
Management has given a cautious but confident outlook. While the macro
remains weak, most notably in Ireland and the UK, management believes that it
sustainable and profitable growth opportunities as it wins market share from
legacy and low
cost carriers. In a sign of confidence in the business and the expectation that
generation will continue to be strong as capex declines, management is proposing
increase the dividend by one third to 4c."
Elan today posted 2012 revenues of $1.20bn for 2012, up 13% on the
previous year. It said that adjusted EBITDA rose by 31% to $220m from
$168.6m mainly due to the continued growth of Tysabri, the multiple sclerosis
It reported a loss of $137m in 2012.
Kelly Martin, CEO said: “2012 was a year in which we continued to make
significant progress and adjustments in our business. We achieved top line
revenue growth of 13%; advanced ELND005 into two Phase 2 programs for
neuropsychiatry; strengthened our balance sheet through refinancing and sale of
our Alkermes shares; we remained disciplined with our cost structure and
investment decisions. In addition, we demerged our pathology-based drug
discovery platform into a new listed company, Prothena Corporation plc, enabling
shareholders investment choice.”
David O'Brien of Goodbody commented
- - Smurfit Kappa
Significant increase in dividend is key take away from Q4 results:
"Smurfit Kappa has reported Q412 EBITDA of €240m (-2% yoy), which compares to
our forecast of €249m (4% behind) but ahead of consensus estimates of €233m. A
better than expected outturn for European operations was offset by a weaker
As expected net debt (€2.79bn) has come in better than forecast (€2.83bn),
helped by strong working capital inflows. The strength of the balance sheet and
cash flow dynamics has given management the confidence to announce a 37%
increase to the final dividend bringing the FY12 dividend to 28c versus our
forecast and consensus expectations of 22.5c.
EBITDA for the European division increased by 3% yoy to €200m, 3% ahead of
our forecast of €194m. European corrugated volumes were broadly flat in Q4 (-2%
in Q312 and -1% in FY12) in contrast to our forecasts for a 1-2% decline.
Corrugated prices were down by less than 1% qoq which was in line with the
outturn for the FY. Latin America was more challenging than expected reflecting
difficult market conditions in Venezuela and Argentina where volumes were down
17% and 12%, respectively. The performance was stronger in Mexico (vols +2%) and
Columbia (flat vols).
Management has indicated that the acquisition of Orange County Container
Group in Mexico is already exceeding expectations with FY EBITDA of $60m
reflecting positive pricing momentum. An update on the integration synergies,
which we believe are conservative at $14m, will be given in Q1. The focus on
cost efficiencies is again evident with the announcement of another cost savings
programme which aims to take €100m of costs out in 2013.
This is a solid set of results from Smurfit Kappa and reinforces the
investment case. We believe the increased dividend is likely to be well received
by the market. In addition, we believe the bias to forecasts is to the upside
given the potential for further refinancing, conservative synergy targets, and
the improving pricing cycle. With a solid balance sheet, attractive yield and
good exposure to high growth markets we believe Smurfit Kappa’s valuation
discount to peers is unwarranted. We reiterate our BUY recommendation.
David O'Brien added on DCC's Q313 IMS (interim management statement) –
Trading in line with expectations, guidance nudged upward: "
This morning DCC
Q313 IMS covering the three months to December end.
Management expects operating profit and eps to grow by 17.5% and 20% in constant
currency terms respectively. This compares to previous guidance for a 15%
operating profit and eps on a constant currency basis. We are forecasting
operating profit of
€222m in line with current guidance. However, there is upside to our 195c eps
which compares to DCC guidance of 200c driven by better tax and interest.
The Energy division grew volumes by 19% yoy benefitting from both
stronger demand for heating oil. The SerCom business is also trading in line
expectations as strong growth in mobile communications and tablets offset
weakness in the home entertainment market. Healthcare and Food & Beverage are
ahead of the prior year while Environmental is slightly behind yoy.
At first glance we estimate that we will be upgrading our FY13 eps forecasts
3% to circa 200c. In addition, we believe the record acquisition spend in the
will underpin earnings growth in the medium term. Despite its consistently
double digit returns and the attractive growth opportunities available for its
main divisions (representing 90% of Group Profit) DCC continues to trade at a
discount to peers which we feel is unjustified. We reiterate our Buy
Economic View: Irish industrial production shows signs of recovery in
December; Juliet Tennent comments - -"Provisional industrial
production for December, released yesterday, saw an annual increase in
seasonally adjusted production volumes of 2.8%. This follows three consecutive
months of annual declines. Within this the “modern” sector, which includes
chemicals, pharmaceuticals, medical and computer goods rose by 1.9% yoy, also
halting a three month run of annual falls. The “traditional” sector saw annual
volumes decline by 1.3%. Volatility in the “Basic pharmaceutical products and
preparations” category is responsible both the weakness in production volumes
for the “Modern” sector seen between September and November 2012 and the
recovery seen in the latest data. As the monthly data is volatile we also
analyse the data on a three monthly basis. Here the annual decline in industrial
production persisted (-7% yoy) driven by the modern sector (-10% yoy). However
the rate of decline has eased from -7% and -10% respectively.
The fall in production volumes in the pharmaceutical sector may be as a
result of the well documented patent cliff that the sector faced last year. At
the time the industry maintained that they had made plans to deal with the
expiration of patents. With the production of pharmaceuticals accounting for
over a third of industrial production volumes the slowing in the rate of decline
is welcome. However, the data is provisional and volatile and we remain cautious
on whether the 'cliff' has been successfully negotiated."
Conall Mac Coille of Davy commented
- - "Markets regained some poise yesterday as positive
corporate earnings data helped sentiment, with investors still worried by
political events in southern Europe. Irish industrial production data showed a
rebound in December, but output is still down 4.4% quarter-on-quarter in Q4
2012, and 7.1% year-on-year. The industrial sector should reduce Irish GDP
growth by 1% in Q4, a similar negative contribution to the economy as in Q3."
Justin Doyle, Investec Bank Ireland, said
The Dell $24bn LBO seemed to perk up the
equity markets after a torrid day previously, U.S. and Asian markets both
closed strongly with Europe opening in the black also;
The big winner overnight was the Japanese
Nikkei index, posting a gain of 3.8% following the news that BoJ Governor
Shirakawa will step down three weeks before the end of his five year term.
The Japanese yen weakened by close to 3% against yesterdays highs of close
Up today we have a relatively quiet calendar
ahead of us, with factory orders in Germany will be the main release in
Europe as the markets await the ECB and Mr. Draghis monthly rate statement
and Q&A session tomorrow afternoon.
In New York Wednesday, the Dow
rose 99 points or 0.71% to 13,979.
The S&P 500 added 1.04% and
the Nasdaq advanced 1.29%.
The MSCI Asia Pacific Index rose 1.3% in Tokyo Wednesday.
The Nikkei 225
jumped 3.77%; China's Shanghai composite index rose 0.06%; South Korea's Kospi
fell 0.10%; Australia's S&P/ASX 200 gained 0.78%; in Mumbai, the Bombay Stock
Exchange's Sensex 30 dipped 0.10%.
In Europe, the
Dow Jones Stoxx Europe 600 gained 0.25% in morning trading Wednesday.
In Dublin, the
ISEQ has risen 1.56%.
Aer Lingus is up
0.78%; Elan has jumped 10.67%; DCC is up 3.05% and Smurfit Kappa has climbed
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
in Brent jumped 14% to average 567,000 contracts in the year to November 20
compared with all of 2011, while WTI fell 17% to 575,000, according to data from
the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.