| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: May 17, 2013 - 8:05 AM


Markets: Glanbia, UTV Media and KBC Bank Ireland issue reports
By Michael Hennigan, Finfacts founder and editor
May 16, 2013 - 2:23 PM

Email this article
 Printer friendly page
Glanbia's global operations

Justin Doyle, Investec Bank Ireland, said today:

  • Abenomics seems to be kicking at last in as overnight data showed that Japanese GDP for Q1 came in higher than expected at 3.5% vs. 2.7%. The good news didn’t knock on to the equity markets as the Nikkei had a rare down, day closing small in the red;
  • It was a different story in the U.S. however as the benchmark S&P index closed back up close to its all time highs of 1,662 after a late evening sell off. It is still a bit of head scratch for us FX beasts to look on at very perky equity markets and a perky dollar skip happily down a sun drenched beach as we have spent most of the last 5 or 6 years watching them move in different directions;
  • Having said all that the dollar upswing has taken a bit of a breather overnight, with most dollar crosses remaining in tight ranges with the exception of maybe the Australian dollar which is really beginning to look like one way traffic;
  • A fortnight ago you wouldn’t have been wrong in saying that an AUD/USD rate of 1.0000 would have been a super level to buy AUD, now almost 600 points later as it languishes close to 0.9800, that psychological level of 1.0000 most definitely feels like a decent sell area;
  • Most of the important economic data is coming out of the US later this afternoon with the headliners being CPI. Philly Fed survey and initial jobless claims due. There is the final April EZ CPI reading also which should give the ECB some food for thought.

Irish Economy: ESRI in grim outlook; Revises down previous GNP estimates

ESRI's FitzGerald says Irish GNP and Current Account surplus overstated

Japan reports strong first quarter growth

Glanbia, the food group, said today that the group is performing to expectations so far this year.

In an interim management statement (IMS), the company confirmed its outlook for this year of 8% to 10% growth in adjusted earnings per share. However, it expects its first half earnings growth to be stronger than the second half due mainly due to the timing of market price movements.

Glanbia said that its Dairy Ireland revenues for the first four months of the year grew by about 2% with volumes 2% higher while price increases contributed over 4%. But the sale of the Yoplait Ireland franchise last year had a negative impact on revenues.

The company said that the retail environment in Ireland remains ''very challenging'' and its consumer products division had a difficult start to the year.

Liam Igoe of Goodbody comments  -- "Glanbia FY13 guidance maintained post Q1 IMS: In Glanbia's IMS this morning it re-iterated it's FY13 guidance of 8-10% growth in underlying EPS. Performance Nutrition has seen over 10% revenue growth, a good part of which we except was volume driven. The building of its new $45m Chicago facility has started and it will be commissioned in Q113. The Ingredient Technologies (whey manufacture) business saw slightly weaker pricing as anticipated. This business will benefit from the inclusion of Asceptic Solutions this year, but despite this and higher volumes, profits are expected to be lower in FY13 (close to our expectations). Glanbia's Pre-Mix Ingredients has seen flat volumes so far in 2013 but is expected to deliver growth for the full year, mainly in H2.

Finally, Glanbia's US cheese business has seen higher prices and volumes though profits look unlikely to be higher than last year due to higher milk input costs.

Glanbia's Irish Consumer Foods business is set to show "significantly lower performance" this year. This is due to the increase in milk costs (the key raw material) which will only be partially recovered this year through product price increases. Associates meanwhile are expected to show a similar performance (adjusted for GIIL) to FY12 in FY13. Higher Southwest Cheese profits will be offset by reduced profits elsewhere.

We would not be inclined to adjust overall forecasts or price target on the back of this IMS though we may review this further after next Thursday's investor day in London."

UTV Media said today in an IMS that its first-quarter revenue fell 5%, hurt mainly by a weak performance at its British radio business, which includes the sports radio station Talksport.

Gavin Kelleher of Goodbody comments  --  "UTV Media Q1 IMS highlights weaker performance expected in H1, more encouraging H2 outlook: UTV released its Q113 trading statement this morning reporting group revenue -5% yoy to £28.1m. On outlook, management states that forecasts from media agencies suggest that the GB radio market will see a return to growth in H213. However, given the challenging conditions, management remains cautious about the outcome for the year and has therefore implemented additional cost saving measures. In terms of Radio GB, revenue was -7% yoy (talkSPORT -10% and Local Radio -3%). The group noted that the UK radio market is weak and talkSPORT will be impacted in H1 by the tough comps with Euro 2012 last year. Radio Ireland revenue was -8% on a reported basis and is expected to be down -6% in Q2. In Television, Q1 revenue was down 3% (London NAR +5% and Irish NAR -12%). Total NAR in Q2 is expected to be down -11% yoy, largely due to Euro 2012 comps but Irish NAR is expected to be +1% in Q2. New Media revenue was up by +9% in Q1 and Q2 revenue is expected to be up +3%. On the balance sheet, net debt was £47.1m at the end of March (£51.7m March 2012). Overall, given the group’s performance in Q1 and guidance for Q2, H1 looks like it will come in down 6-7% yoy versus our forecast of -4% yoy. Commentary around a return to growth for the radio GB market in H2 is encouraging, and the group will have easier yoy comps which should support growth in H2. We expect to lower our FY13 EBIT by c.4% from £22.8m currently. The Q1 performance and Q2 outlook are disappointing, but the group

Economic View: ESRI upgrades Irish economic forecasts sharply; Dermot O'Leary of Goodbody comments - - "It is rare that economists are in general agreement but this is where we find ourselves this morning in relation to the new forecasts published by the Economic and Research Institute (ESRI). The independent think-tank is forecasting that Irish GDP will grow by 1.8% in 2013 and by 2.7% in 2014. As reference, we are forecasting GDP growth of 1.6% and 2.6% in these years. These represent significant upgrades from the 1.3% and 2.3% forecasts published in January. In light of forecast downgrades at a European and global level, some might see the latest upgrade as somewhat of a surprise.

Going into the detail of the forecasts, the ESRI’s upgrades are for similar reasons to our own upgrades at the turn of the year. Export growth forecasts have been reduced for 2013 (from 4% to 3%) but import growth forecasts have been reduced sharply (from 4% to 2%) while there are modest tweaks to the components of domestic demand forecasts in 2013. For 2014 though, the ESRI is more confident about both consumption (forecast going from -0.5% to 0.4%) and investment (from 3.6% to 5.5%), owing to a combination of better labour market trends and an expectation of a continued inflow of FDI. On the public finances, deficit forecasts have been reduced in light of the deal on promissory notes, with the deficit forecast for 2013 in line with our own estimate of 7.2% of GDP. Debt is expected to peak at 121% of GDP in 2013, again similar to our own estimates.

Forecasts for the Irish economy are now in a pretty tight range of 1%-2%, with the ESRI at the upper end of this range. Being bang in the middle of consensus can often be a dangerous position. The big swing variable for the Irish economy continues to be the euro area economy. Continued recession may put downward pressure on forecasts for 2014 in particular."

KBC Bank Ireland today reported a first quarter after-tax loss of €77m compared with a loss of €148m the same time last year as the bank continued to suffer  from high bad debt charges.

Banks: KBC results show higher QoQ impairment charge in Q1 in Ireland; Eamonn Hughes and Colm Kelleher of Goodbody comment - - "KBC Group released Q113 results this morning and we have looked at their comments in relation to their Irish operation. Ireland is reported within the International Markets Business Unit (IMBU division) and recorded a loss of €77m in Q1, which compares to an average quarterly loss of €101m in the prior four quarters.

Total income was €32m in the quarter, with net interest income stable sequentially, and costs were €21m, driving a 65% cost income ratio (49% for FY12 though 71% in Q412). The credit charge in Q113 was €99m, equivalent to 2.47% of loans and up from the €87m recorded in Q412 and €195m in Q112. The average FY12 credit charge was 334bps. Compared with Q412, there were lower specific loan loss provisions for mortgages and corporate lending, but increased portfolio-based loan loss provisions for mortgages. The statement reiterated its previous guidance on potential loan losses in Ireland “where impairment charges of €300-400m are expected to be recorded for the full year”. Non-performing loans were 24% of the loan book (up 70bps in the quarter, from +150bps in the previous quarter), with 48% provisions coverage. The IMBU loan book was down 1% quarter on quarter (mainly due to Ireland) whilst deposits were up 4% QoQ and 18% yoy (again, mainly due to Ireland which was up 12% QoQ and +89% yoy).

Whilst up slightly on the Q412 level, the Q1 credit charge in KBC’s Irish operations looks to reside within the overall full year impairment charge guidance from the bank. Recent IMS updates from both AIB and BOI indicated lower impairment charges as likely this year relative to last year, with those directional trends reflected in our estimates."

Bank of Ireland: BOI to entry MSCI indices; Eamonn Hughes of Goodbody comments  - -"MSCI has indicated overnight that re-weighting changes will see Bank of Ireland enter its Global Standard indices, for inclusion at close of business on May 31. Estimates on potential share volumes required to be purchased is pitched anywhere from 9-16 days of average daily volumes, equivalent to c.1-1.2bn shares.

The news has been well flagged but is undoubtedly a technical positive for the name. The estimates of potential shares to be purchased is equivalent to c.3-4% of the share count, but given the relatively tight shareholder structure, possibly closer to 6-7% of the actively traded free float (and c.20%+ of the trading in the name over the past 3 months). This should continue to be supportive for the stock in the coming weeks."

AIB Group Filing updates indicate bank is poised to continue market issuance:  Eamonn Hughes added - - "AIB has filed updated bond prospectus documents with the Central Bank and Companies Office in recent weeks (according to the Irish Independent). The papers were filed with the Companies Office in early May and allow the bank to now move quickly on any issuance, incorporating the updated FY12 documentation. AIB has raised two covered bonds in the last six months totalling €1bn (Goodbody was co-manager on both €500m transactions). In a recent note on the bank, we indicated that we anticipated further issuance from the company, highlighting ample ACS capacity at the bank. We estimated a basic covered bond issuance potential of around €4-5bn on top of which there is potential to retire some existing self-issuance bonds and future maturities. Insurance: Aviva Q1 IMS shows large drop in Irish premiums;  Eamonn Hughes and Colm Kelleher of Goodbody comment - - Aviva released a Q1 IMS this morning. Of interest to us is the performance of the Irish business and more specifically the general insurance arm. Net Written Premiums (NWP) in Q113 were £71m v £82m in Q112 (-12% yoy) and -7% qoq. The combined operating ratio for the general insurance business of 108% compares to 104% for the same period in 2012. The company indicates that the performance is “unsatisfactory” and remains a work in progress, including taking out costs and leveraging from its UK underwriting expertise."

US Markets

The Dow rose 60 points or 0.40% Wednesday to 15,275.

The S&P 500 added 0.51% and the Nasdaq advanced 0.26%.

Asia Markets

The MSCI Asia Pacific slid 0.4% in Tokyo Thursday.

The Japanese Nikkei 225 fell 0.39% and Shanghai Composite Index gained 1.22%; Kospi 200 index rose 0.79%; Australia's ASX/S&P 200 added 0.50%; in Mumbai, the Bombay Stock Exchange the S&P BSE India Sensex Index climbed 0.17.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600 is down 0.16% in early afternoon trading Thursday.

In Dublin, the ISEQ is down 0.o4%.

Glanbia is off 0.64%; No trade in UTV Media..


European Benchmarks

Irish Share Prices

Key Index Performance Statistics

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.2899 and at £0.8449.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.

On Wednesday the BDI fell 11 points or 1.26% to 861.

Crude oil for June 2013 delivery is currently trading on the Chicago York Mercantile Exchange (CME/Nymex) at $94.24 down 6 cents from Wednesday's close. In London, Brent for June delivery is trading on the International Commodities Exchange at $103.89. The North Sea benchmark accounts for two-thirds of the global market.

Bloomberg 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.

Daily trading 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.

Gold spot price

The spot price of an oz of gold is trading on the CME in Chicago at $1,374.30 down $22.20 from Wednesday's closing.

Gold had hit a record high of $1,921.05 a troy ounce on Sept 06, 2011.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

International
Latest Headlines
Wednesday newspaper review: December 17, 2014
Tuesday newspaper review: December 16, 2014
Monday Newspaper Review - Irish Business News and International Stories - - December 08, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 28, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 27, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 25, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 21, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 20, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 19, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 18, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 17, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 14, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 13, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 12, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 11, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 06, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 04, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 03, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 31, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 30, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 29, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 28, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 24, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 22, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 21, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 20, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 17, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 16, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 15, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 13, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 09, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 08, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 07, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 06, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 02, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 01, 2014
Monday Newspaper Review - Irish Business News and International Stories - - September 29, 2014
Friday Newspaper Review - Irish Business News and International Stories - - September 26, 2014