Business

PARIS — Steel giant ArcelorMittal said on Thursday it recorded its best quarterly performance in a decade as commodity prices have soared due to booming demand fuelled by an economic recovery from the pandemic.

The Luxembourg-based group's net profit nearly doubled to $2.3 billion (1.9 billion euros) in the first quarter compared to the last three months of 2020, according to an earnings statement.

Sales surged by 15 per cent in the first three months of the year to $16.2 billion as steel prices and iron ore revenues rose.

Prices of raw materials ranging from copper to lumber and tin have skyrocketed in recent months as economies have started to bounce back from the coronavirus pandemic.

ArcelorMittal forecast an increase in steel demand of up to 5.5 per cent after a contraction last year.

"The first quarter of this year has been our strongest in a decade," chief executive Aditya Mittal said in a statement.

"While this is naturally a very welcome development following a highly challenging 2020, we are mindful that Covid continues to be a health challenge across the world, especially in developing economies," Mittal said.

The group is present in 60 countries and is listed in stock markets across Europe and New York.

FRANKFURT — Lufthansa's shareholders on Tuesday approved a plan for the airline to raise 5.5 billion euros ($6.6 billion) on the market, in order to start paying down state aid that has kept it aloft during the coronavirus pandemic.

The airline group, which also includes Austrian, Swiss and Brussels Airlines, was saved from bankruptcy last June by a German government bailout.

The company is in the throes of a painful restructuring to slash costs that will include thousands of job cuts. 

Calling for the capital hike, chief executive Carsten Spohr said it would help the company "return to financial stability" after a turbulent year.

Most of the sum to be raised would go towards repaying state aid, he added.

The planned new share issuance would take place this or next year, said the company's financial director Remco Steenbergen last week.

Such capital hike programmes are usually unpopular with shareholders as they essentially dilute the value of the shares in circulation.

Lufthansa has so far used 2.5 billion euros of the 6.8 billion euro government bailout. The group repaid a billion euros in February.

Like other airlines around the world, Lufthansa found its planes grounded as governments closed borders to halt the coronavirus early on in the pandemic.

Since then, an early recovery last summer turned out to be shortlived, and passenger demand has remained low.

Underlining the long road to recovery, Lufthansa said in March that capacity will climb to 90 per cent of 2019's level only in "the middle of the decade".

SAN FRANCISCO — Twitter on Tuesday said it is buying Scroll and its ad-free news app to bolster a coming subscription service, and channel money to journalism in the process.

The global one-to-many messaging platform did not disclose how much it is paying for Scroll, which owns the Nuzzel app.

"Scroll will become a meaningful addition to our subscriptions work as we build and shape a future subscription service on Twitter," Twitter Product Manager Mike Park said in a blog post.

US-based Scroll confirmed the acquisition, apologising to users that it will go into a private beta mode as it is integrated into a Twitter subscription play later this year.

"Scroll is at the heart of a coalition of publishers and platforms building a new user experience model that sustainably funds journalism," Chief Executive Tony Haile said in a blog post.

"At the core of that is a simple membership that enables people to fund the sites they love, without having to deal with the ads and trackers they don't."

Subscribers can visit an array of websites such as The Atlantic, The Verge, and USA Today for news stories "with no ads, no dodgy trackers and no chumboxes of clickbait", according to Scroll.

News publishers would get attention and money in the process.

"As a Twitter subscriber, picture getting access to premium features where you can easily read articles from your favorite news outlet, or a writer's newsletter from Revue, with a portion of your subscription going to the publishers and writers creating the content," Park said.

Twitter has been struggling to create ways to make money from its service without disrupting the real-time flow of posts that has been it defining characteristic.

Last week, Twitter reported weaker-than-expected earnings and disappointing user growth.

A key figure of "average monetisable daily active users" was below expectations at 199 million, an increase of 20 per cent from a year ago.

Twitter has struggled to expand beyond its core audience of celebrities, journalists and political leaders, even if it has become an important forum for policy debates.

"People turn to Twitter to see and talk about what's happening, and we are helping them find their interests more quickly while making it easier to follow and participate in conversations," Chief Executive Jack Dorsey said during an earnings call.

Twitter has faced challenges in tackling misinformation and abusive content even as it strives to become a platform for political discourse.

RIYADH — Energy giant Saudi Aramco on Tuesday posted a 30 per cent jump in first quarter profits, beating forecasts in a sign of recovery from last year's oil market crash fuelled by the coronavirus pandemic.

Aramco said its net profit rose to $21.7 billion in the first three months of the year, compared to $16.7 billion in the same quarter of 2020, owing to a stronger oil market and higher refining and chemicals margins.

The bumper results follow strong profits posted last month by major oil firms — from American giants ExxonMobil and Chevron to Britain's BP and France's Total — as a recovery in crude prices fuelled their rebound from the pandemic.

"The momentum provided by the global economic recovery has strengthened energy markets," Aramco chief executive Amin Nasser said in a statement.

"Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming. And while some headwinds still remain, we are well-positioned... as economies start to recover."

Oil prices tumbled midway through last year's first quarter as the pandemic shuttered large parts of the global economy, piling pressure on petro-states including OPEC kingpin Saudi Arabia.

The strong earnings provide relief to Aramco, Saudi Arabia's cash cow, which has revealed consecutive falls in profits since it began disclosing earnings in 2019.

The company's low earnings last year piled pressure on government finances as Riyadh faces a ballooning budget deficit and pursues multi-billion dollar projects to diversify its oil-reliant economy.

The first quarter profit beat a forecast of around $20 billion by RBC Capital Markets, which said the results highlight "Aramco's leverage to rising commodity prices".

Aramco declared a dividend of $18.8 billion for the first quarter. That is in line with the company's plan to pay an annual dividend of $75 billion — a key revenue source for the government, Aramco's biggest share holder.

Saudi Arabia is currently seeking to monetise its energy assets, as it explores new revenue streams to fund its ambitious diversification drive.

Last month, Aramco said it had struck a $12.4 billion deal to sell a minority stake in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners.

Long seen as the kingdom's "crown jewel", Aramco and its assets were once tightly government-controlled and considered off-limits to outside investment.

But with the rise of Crown Prince Mohammed bin Salman who is accelerating efforts to implement his "Vision 2030" reform programme, the kingdom has shown readiness to cede some control.

In late April, Prince Mohammed said Saudi Arabia, the world's top crude exporter, was in talks to sell 1 per cent of Aramco to an unnamed foreign energy firm.

Aramco previously sold a sliver of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world's biggest initial public offering.

The energy giant could announce another offering of shares to international investors within the next year or two, the prince said.

In a major new diversification push in March, Saudi Arabia announced plans to pump investments worth $3.2 trillion into the national economy by 2030, roping in the kingdom's biggest companies including Aramco.

Under a programme named "Shareek", or partner, Aramco and other top Saudi companies will lead the investment drive by contributing 5 trillion riyals ($1.3 trillion) over the next decade, Prince Mohammed said.

WASHINGTON — Verizon announced on Monday it was selling faded Internet stars Yahoo and AOL to a private equity firm for $5 billion, ending the media ambitions of the telecoms giant.

The deal with Apollo Global Management also includes the entire Verizon Media unit, including the advertising tech operations of the two brands.

Verizon will retain a 10 per cent stake in the company, which will continue to be led by chief executive Guru Gowrappan, the company said in a statement.

Verizon acquired Yahoo in 2017 for some $4.5 billion, ending the run for one of the storied brands of the early internet. It merged Yahoo into its division with AOL, another star of the early Internet era, which Verizon acquired in 2015.

Both AOL and Yahoo lost traction — and lofty market valuations — as Internet users shifted to newer platforms such as Google and Facebook.

"We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands," said Reed Rayman, private equity partner at Apollo.

"We have enormous respect and admiration for the great work and progress that the entire organisation has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo's growth in its next chapter."

Apollo's David Sambur added, "We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer Internet platforms."

AMMAN — Arab Bank Group has consolidated the financial statements of Oman Arab Bank under Group accounts in the first quarter of 2021, according to a bank statement.

Oman Arab Bank has recently finalised the acquisition of Al Izz Islamic Bank, a full-fledged Islamic bank.

The step strengthens the bank’s presence in the Sultanate of Oman and it is in line with Arab Bank’s strategy to reinforce its business in the Gulf region, according to the statement.

The consolidation of Oman Arab Bank under the Group accounts has materially increased the size of Group balance sheet during this period, with total assets increasing by $8.1 billion and loans and deposits each increasing by $7.1 billion.

Arab Bank Group reported net income after tax of $128.3 million compared to $147.6 million for the same period last year, recording a drop of 13 per cent. Customer deposits grew by 30 per cent to reach $45.8 billion compared to $35.2 billion, while loans grew by 28 per cent to reach $33.5 billion compared to $ 26.2 billion.

Sabih Masri, chairman of the Board of Directors said the results of Arab Bank reflect its resilient performance in this challenging economic environment, compared to the pre-covid normal operating environment which prevailed in the first quarter of the last year.

Nemeh Sabbagh, chief executive officer, commented that while operating revenue continues to be impacted by low interest rates and a higher cost of risk, the bank’s performance demonstrates its robust fundamentals, its strong liquidity and capital base with equity of $10 billion, capital adequacy of 16.4 per cent, and a loan to deposit ratio of 73.1 per cent.

In the statement, Masri concluded by expressing optimism in future economic prospects, noting that the high pace of vaccination programmes witnessed by countries around the world will hopefully lead to the gradual recovery of regional and global economies.

HONG KONG — Asian and European markets rallied on Thursday as traders welcomed blockbuster earnings from Wall Street titans and after the Federal Reserve painted a rosy picture of the US economic outlook, repeating a pledge to stick to its guns with an ultra-low monetary policy.

Traders were also keeping an eye on President Joe Biden's first address to Congress as he laid out another huge spending plan aimed at helping American families and paid for with taxes on the wealthy.

After a shaky couple of weeks on trading floors, equities appear to be finding their feet again and getting ready to push to new highs as vaccines are rolled out, lockdowns eased and economies get back on track.

While there have been fears the expected surge in activity in this year could fan inflation and force central banks to step back from their loose monetary policies, the Fed said Wednesday it was ready to stay the course.

After its latest meeting the bank upgraded its outlook for the world's top economy, while its boss Jerome Powell said that the expected spike in inflation will be temporary owing to last year's low base of comparison and is not likely to need policy action.

"An episode of one-time price increases as the economy reopens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation," he said.

He added it was not yet time to start talking about tapering its vast bond-buying programme that has pumped trillions into the financial system.

"The Fed's outcome-based guidance and triple-down bet on not talking about tapering should provide an easy playbook leading up to the June 16th (policy) meeting," said OANDA's Edward Moya.

"The US will need to see a couple of blowout nonfarm payroll reports, herd immunity reached before the June meeting, and inflation above 3.5 per cent for the Fed to be willing to start talking about tapering."

Markets strategist Louis Navellier added: "One observation about why the Fed is maintaining such a high level of conviction that inflation will not be long lasting is that the global reopening is not a synchronous economic event.

"China, the US, and parts of Europe are experiencing late-stage pandemic growth, but this is not happening in several key developing and emerging markets, where Covid-19 data is surging, and their economies are still suffering."

'Ready for takeoff' 

However, Michael Hewson at CMC Markets said: "To sum up, the Fed appears to be on autopilot through the summer, however if the data continues to surprise to the upside the market will probably front run it anyway."

While US markets struggled to lift off, with all three main indexes ending down, Asia was well in the green, with Hong Kong, Sydney and Singapore leading the way. Shanghai, Wellington and Jakarta were also up, though Seoul dipped and Taipei was flat. Tokyo was closed for a holiday.

London and Paris were well up in the morning though Frankfurt was flat.

The upbeat mood was helped by forecast-beating earnings reports from Apple and Facebook, two of Wall Street's biggest hitters, who essentially saw their profits double in the first quarter.

That came after a similar strong release by Google.

The three companies, along with Amazon, are among tech titans that have thrived as the pandemic accelerated a shift to working, learning, shopping and socialising online. 

South Korean giant Samsung also said Thursday it saw net profit jump by almost half in the first three months.

In Washington, Biden hailed the US vaccination drive and its recovery from the pandemic, telling a joint session of Congress: "America is ready for takeoff."

He also laid out his $1.8 trillion American Families Plan to pour money into early education, childcare and higher education -- all paid for by letting the top rate of income tax rate return to the pre-Donald Trump level around 37 per cent.

Americans earning less than $400,000 a year, however, would face no extra taxes, he said.

The spending splurge follows a $1.9 trillion stimulus and comes as a $2.2 trillion infrastructure proposal is being debated by lawmakers.

While the higher rate of tax is unlikely to please Wall Street, analysts have said traders were likely to be willing to overlook it for now as they concentrate on the economic recovery drive.