Business

PARIS — European aircraft manufacturer Airbus flew back into the black in the first three months of the current year as cost-cutting and restructuring measures began to pay off, but the group warned that the crisis caused by the coronavirus pandemic was not yet over.

Airbus said in a statement that it booked bottom-line net profit of 362 million euros ($440 million) in the period from January to March, compared with a loss of 481 million euros a year earlier.

First-quarter revenues were stable at 10.5 billion euros.

"The good Q1 results mainly reflect our commercial aircraft delivery performance, cost and cash containment, progress with the restructuring plan as well as positive contributions from our helicopter and defence and space activities," said chief executive Guillaume Faury.

However, "the first quarter shows that the crisis is not yet over for our industry, and that the market remains uncertain."

Airbus said it had delivered a total of 125 commercial aircraft in the three-month period, up from 122 a year earlier, including nine A220s, 105 A320 family, one A330 and 10 A350s.

Looking ahead, the aircraft maker said it was sticking to its previous forecasts for stable aircraft deliveries of 566 for 2021 as a whole - the same number as in 2020 - and underlying operating profit of two billion euros. 

LONDON — British bank NatWest said on Thursday that net profit more than doubled in the first quarter as the UK economy started to recover from the Covid pandemic.

Profit after tax jumped to £620 million ($862 million, 713 million euros) in the three months to March, aided by a release of impairment provisions due to the improving economy, NatWest said in a statement. 

That compared with net profit of £288 million in the same period of 2020, when the Covid-19 pandemic erupted.

"NatWest Group's profit in the first quarter of 2021 is a result of a good operating performance in our core franchises, as well as modest impairment releases that reflect the better-than-expected performance of our loan book," said chief executive Alison Rose.

"Defaults remain low as a result of the UK government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.

"However, there is continuing uncertainty for our economy and for many of our customers as a result of Covid-19," she added.

NatWest revealed it had released £102 million of cash that it had previously set aside for loans that might not be repaid due to coronavirus fallout.

The performance of NatWest, like rival Lloyds Banking Group, hinges on the performance of the domestic British economy because both have core UK retail operations.

LONDON — The 13 members of the Organisation of the Petroleum exporting Countries (OPEC) and 10 other oil-producing countries, including Russia, said on Tuesday they would stick to an agreement for progressive production increases over three months from May given current stable prices and upbeat demand forecasts.

"We have examined the market situation and again have confirmed the decisions which were taken a month ago," Alexander Novak, the Russian deputy prime minister whose portfolio includes energy, told Rossiya 24 television following a ministerial meeting, confirming a decision the market had priced in.

"Market prices are currently more or less stable," he added. "We hope this trend continues through to year's end."

At its previous meeting at the start of April the alliance had decided to increase production by 350,000 barrels per day (bpd) in May, as much again in June and then by an additional 450,000bpd in July.

OPEC said the members of the OPEC+ alliance, formed in 2016, had agreed on the progressive increase in highlighting what it termed the importance of rebalancing the global oil market following last year's downward adjustment of output as a result of the COVID-19 pandemic.

Alliance members are currently leaving around seven million barrels of potential output a day in the ground in order not to flood a market struggling with the economic fallout of the pandemic.

The alliance, which accounts for approximately a third of global oil production, announced it would meet again in June to review output for July and August.

It noted ongoing concerns over rising COVID-19 cases not least in India, which before the virus hit was consuming more than 5 million bpd, third only to the US and China, according to BP data.

LONDON — Global stock markets were subdued on Tuesday on the eve of a monetary policy update from the US Federal Reserve (Fed) and ahead of earnings results from tech giants.

While trading floors are geared up for a rocket-fuelled surge in economic activity in the second half of the year and into the next, thanks to vaccinations and the easing of lockdowns, traders are in wait-and-see mode.

The Fed's monetary policy meeting outcome on Wednesday is broadly expected to see it reassert its pledge to maintain ultra-loose policy until its goals on unemployment and inflation are met.

The Fed's accompanying statement will be closely examined for clues on the state of the coronavirus-ravaged US economy and the future path for borrowing costs.

The central bank's meetings are a crucial focus of investor interest as they continue to fret that the expected strong recovery will send prices soaring and force policymakers to raise the record low interest rates cementing a global rally.

US President Joe Biden, meanwhile, will make his first State of the Union address on Wednesday, in which he could unveil a $1.8 trillion American Families Plan that would provide national child care, paid family leave and free community college, paid for with higher taxes on the rich.

After Monday saw record high closes, Wall Street opened slightly off.

Apple case 

Apple ceded 0.25 per cent as EU competition authorities were expected to imminently file formal accusations against the US company for unfairly squeezing out music streaming rivals, according to sources close to the case.

Separately, Russian regulators slapped a $12.1 million fine on Apple for "abusing" its dominant position in the market by giving preference to its own applications.

Tesla was down 2.8 per cent despite reporting record profits on a huge jump in revenues. 

Shortly after the US opening, there was a glimmer of cheer after a survey showed US consumer confidence hitting a post-pandemic high. 

Earlier, most Asian markets had swung in and out of positive territory with Tokyo, Hong Kong, Sydney, Seoul, Jakarta and Manila all in the red.

Major European markets all marked time, London off 0.2 per cent even as energy major BP rebounded into first-quarter profit on recovering oil prices while Frankfurt and Paris and also slipped into the red.

Google owner Alphabet and Microsoft will publish first quarter results on Tuesday while Apple, Amazon and Facebook will release their figures later this week.

"What looks like a holding pattern across most major stock markets seems set to continue," noted IG analyst Chris Beauchamp.

"It is another day of tech earnings, but until these arrive late this evening there is relatively little to go on, aside from further speculation about any tinkering with tomorrow's [Federal Reserve] statement."

Elsewhere, oil prices rose before Wednesday's key output meeting of OPEC and other major crude producers.

SAN FRANCISCO — Apple said on Monday it plans to boost its investment plans in the United States to $430 billion over the next five years, saying this would add some 20,000 jobs.

The updated plan includes more than $1 billion for a new campus and engineering hub in the Research Triangle area of North Carolina.

Apple also plans to invest "tens of billions of dollars for next-generation silicon development and 5G innovation across nine US states", a statement said.

The California tech giant said it was increasing its 2018 goal of $350 billion in US investments after Congress passed a measure lowering taxes on repatriated profits for American firms.

"At this moment of recovery and rebuilding, Apple is doubling down on our commitment to US innovation and manufacturing with a generational investment reaching communities across all 50 states," said Apple Chief Executive Tim Cook.

"We're creating jobs in cutting-edge fields — from 5G to silicon engineering to artificial intelligence — investing in the next generation of innovative new businesses, and in all our work, building toward a greener and more equitable future."

The news comes with Apple and other tech giants facing heightened antitrust scrutiny for their growing dominance of key economic sectors, which has increased during the pandemic.

Big Tech firms are also being targeted for tax reform both in the United States and globally.

Apple said it is "the largest taxpayer in the US" and has paid almost $45 billion in domestic corporate income taxes over the past five years.

The company said it was on track to meet its 2018 goal of creating 20,000 new jobs in the US by 2023 and that with the latest commitment, expects to create another 20,000 over the next five years.

The latest effort calls for expansion or new facilities in parts of California, Colorado, Massachusetts, Texas, Washington state, and Iowa.

LONDON — Digital euros, yuan and dollars? Faced with increased popularity for cryptocurrency Bitcoin, as well as for online payments during the pandemic, central banks are exploring new units of their own.

Outlined below is an examination of how central bank digital currencies could resemble and differ from cryptocurrencies and "stablecoin" projects like Facebook-backed Diem.

What are central banks doing? 

With the backing of Europe's biggest economy Germany, the European Central Bank (ECB) is mulling a digital euro that could be guaranteed by the central bank, in turn potentially offering greater security than by commercial banks.

The ECB has spoken also about the  possibility one day of central bank personal payment cards and accounts being linked to a digital euro. 

A formal decision on how to proceed is expected this year following consultations amid European concerns around privacy protection.

Issuing and transferring digital euros could be done using technology similar to the blockchain ledger on which cryptocurrencies such as Bitcoin rely.

But the ECB has stressed that a digital euro would not replace cash and should not be seen as a cryptocurrency.

Indeed, 13 years after the creation of Bitcoin, while the wider cryptocurrency market has swelled to a value above $2 trillion, its use as a means of payments has yet to take off. 

While one Bitcoin is today worth around $60,000, the ECB has noted that one euro must remain one euro.

China's central bank has been working on a digital currency since 2014 and is testing the use of a "digital yuan" or "e-CNY" in various pilot programmes across the country. 

Consumers across the country already widely use mobile and online payments, but the digital yuan could allow the central bank — rather than the big tech giants — greater data and control over payments.

Although no official launch date has been announced, China is intending to make it possible for foreign athletes and visitors to use its digital currency during the Winter Olympics next year in Beijing.

The Bank of England, along with the UK government, is meanwhile looking into the possibility of creating a digital currency that households and businesses could use instead of cash — an initiative finance minister Rishi Sunak dubbed "Britcoin".

In the US, the Federal Reserve is researching a possible cyber dollar, but is moving slowly to ensure it addresses the risks of fraud and counterfeiting.

Digital versus cryptocurrency 

The issuance of cryptocurrency like Bitcoin is regulated by an algorithm, not by a central bank's monetary policy committee. 

The de-centralised system ensures that Bitcoin's creators cannot print new money for example to help stimulate economic growth. 

At the same time, central banks have hit out at the highly-speculative world of cryptocurrencies.

Regarding the UK project, "as cryptocurrency investors ride a wave of speculation, the [British] government will be keen to distance itself from what is still seen as the wild west of the payments world", noted Susannah Streeter, senior analyst at stockbrokers Hargreaves Lansdown.

She added that "the attraction of the de-centralised system is still likely to keep crypto firmly in the speculative spotlight".

What about 'stablecoins?' 

The ECB appears to be considering a digital euro more because of the threat posed by stablecoins, such the planned unit Diem backed by Facebook, rather than Bitcoin.

Stablecoins are seen as less volatile than cryptocurrencies since they are pegged to traditional units such as the euro and dollar.

Should Facebook enable payments in Diem to be processed on its social network platforms, including WhatsApp, traditional currencies could suffer.

PARIS — What was initially downplayed as a brief hiccup in the supply of semiconductors looks more and more like a shortage that may last throughout the year in what would be a big blow to automakers.

They were planning to rev up production this year to meet an expected surge in demand from consumers as the pandemic wanes and to recover from last year's losses. But without enough chips those hopes are fading.

Stop and go manufacturing 

The shortage of chips has pushed automakers to idle production lines for brief periods when they temporarily run out of supplies. 

Toyota, Volkswagen, Ford, Peugeot, Fiat, Jeep, Honda, Jaguar Land Rover and even the Chinese startup Nio have had to pause production in their factories in the past months.

Automakers have reduced the stocks of parts they keep on hand in recent years as part of cost-cutting measures, so delivery delays can quickly force an entire shutdown. 

Renault CEO Luca de Meo told shareholders this past week that "the semiconductor shortage could cause a drop in production volume this year of at least 100,000 vehicles".

In Germany, thousands of autoworkers were on reduced work hours or temporary unemployment as Volkswagen and Mercedes factories were forced to halt production.

Fiat slowed production at its Brazilian factory in Betim for the second time this month.

The Stellantis factory in Rennes-La Janais in France, where 2,000 people work, was also nearly idle.

Essential chips 

Computer processors are a key element in today's vehicles, which can easily have several dozen to control elements such as the engine, automatic braking system, airbags, automatic parking system and the infotainment system. 

The main manufacturers are located in Asia, such as TSMC in Taiwan and Samsung and SK Hynix in South Korea, although there are still some factories in the United States and Europe.

The surge in demand for electronic devices during the pandemic is the main cause of today's shortage of chips.

A fire in a Japanese factory did not help and now a drought in Taiwan may force a reduction in output.

Automakers adapt 

Automakers say they are managing the situation on a day by day basis and are trying to avoid shutting down production lines completely.

Due to the chip shortage, "GM is building some vehicles without certain modules when necessary," the US carmaker said in a statement. 

"They will be completed as soon as more semiconductors become available", it added. 

Stellantis was able to resume production of the new Peugeot 308 at half the normal pace after a three-week halt. It went back to a dashboard console that uses an analogue speedometer. 

Most automakers say they hope to make up lost production during the second half of the year.

Current shortages of semiconductor chips that are slowing car production worldwide "can be compensated for by the end of the year", Daimler CEO Ola Kallenius said in a statement.

End of the tunnel? 

Others are more pessimistic.

"An improvement in the short term is not to be expected" said Volkmar Denner, the CEO of Bosch, which is a major supplier of components for automakers.

"Our entire industry will probably be confronted by this unsatisfactory situation for months to come," he added.

French auto component maker Faurecia does not expect an improvement before the very end of the year as the consumer electronics industry is gearing up for its peak manufacturing period.

"The third quarter is very important for manufacturing goods for Christmas. We can be more optimistic for the fourth quarter," said the company's CEO, Patrick Koller.

According to Iris Pang, a specialist on the Taiwanese economy at ING, the chip shortage risks lasting into next year or even 2023. The drought has prompted authorities to order firms in areas where chip factories are located to reduce water usage.

"This has started to make semiconductor factories nervous when they have more semiconductor orders," she said.

BEIRUT — A Lebanon-made electric car made its debut on Saturday, the first time the Mediterranean country has manufactured an automobile, despite struggling amid a dire economic crisis with frequent power cuts.

The red sports car with butterfly doors — named "Quds Rise", using the Arabic name of Jerusalem — is the project of Lebanese-born Palestinian businessman Jihad Mohammad.

It is the "first automobile to be made locally", Mohammad told reporters, at the unveiling in a parking lot south of Beirut.

It was built in Lebanon "from start to finish", he said of the prototype, emblazoned at the front with a golden logo of the Dome of the Rock, the shrine in Jerusalem's Al Aqsa Mosque compound, Islam's third holiest site.

The car is to cost $30,000.

Production of up to 10,000 vehicles is hoped to start later this year in Lebanon, with cars to hit the market in a year's time, said Mohammad, the director of Lebanon-based firm EV Electra.

Mohammad, 50, said he set up the company four years ago after years abroad, employing Lebanese and Palestinian engineers among 300 members of staff.

He says his long-term goal is to compete on the international market for hybrid and electric cars, as well as to make sales in Lebanon.

But the unveiling comes as Lebanon struggles amid its worst economic crisis in decades, and imported car sales are at a record low, in part due to capital controls and drastic devaluation on the black market.

Mohammad said potential Lebanese buyers would be offered the opportunity to pay for half the new electric car in dollars, with the rest paid in Lebanese pounds at an exchange rate better than the black market one, to be paid over five years without interest.

The economic crunch since late 2019 has plunged more than half the population into poverty.

Lebanon also relies on fossil fuels for power generation, already insufficient for a population of around 6 million who suffer daily power cuts.

To power its new electric cars, the firm plans to set up around 100 recharging stations across the country connected to generators.

These could then be fuelled by solar and wind power generation, Mohammed said.