Business

LONDON — British luxury car maker Aston Martin Lagonda on Wednesday revealed its third-quarter net losses more than doubled on supply-chain disruptions, offsetting accelerating sales.

Losses after tax hit £228 million ($262 million) in the three months to the end of September, after a shortfall of almost £90 million a year earlier, according to the group which is targeting electrification of its range.

Sales of the brand, loved by fictional spy James Bond, zoomed by a third to £315.5 million, but this was propelled by a 28-per cent increase in the average car price, it said in a statement.

Aston Martin faced "supply chain and logistics disruption as well as inflationary pressures impacting the broader automotive industry" which delayed car deliveries and ramped up costs, noted chairman Lawrence Stroll.

The group was hit also by a plunge in the pound that made dollar-denominated debt more expensive.

Aston Martin has been knocked off track also by a collaboration with troubled electric car battery startup Britishvolt.

UK-based Britishvolt on Wednesday said it had secured "necessary near-term investment" after media reported on Monday that the cash-strapped firm was on the brink of collapse.

The startup, which is developing a £3.8-billion electric battery factory in north-eastern England, also warned that the "weakening economic situation is negatively impacting much business investment".

Britishvolt said staff had agreed to a temporary pay cut despite a UK cost-of-living crisis amid sky-high inflation.

Britain is due to ban the sale of new high-polluting diesel and petrol cars from 2030, forcing its car manufacturing sector to increasingly switch production to electric models.

Aston Martin meanwhile suffered vast losses in 2019 as it crashed spectacularly on weak global demand linked to China's economic slowdown and Brexit.

Losses then deepened further as a result of fallout from the coronavirus pandemic.

The automaker was saved from bankruptcy in early 2020 by Canadian billionaire Lawrence Stroll, who is the top shareholder.

Saudi Arabia became the second-biggest investor following a capital injection from its sovereign wealth fund earlier this year.

Aston Martin is looking to shift gear into fully-electric vehicles from 2025.

FRANKFURT — Volkswagen (VW) on Tuesday became the latest German auto giant to get rid of its car-sharing business, after it too struggled to make a profit in the emerging sector.

VW said it was selling its WeShare unit, which offers around 2,000 all-electric cars for hire in Hamburg and Berlin, to German company Miles Mobility.

No financial details were disclosed.

"We made it very clear in 2020 that we didn't think the [service] would be profitable for us," Christian Dahlheim, head of VW group sales, said in a call with reporters.

Rivals Mercedes-Benz and BMW agreed last May to sell their Share Now joint venture to US-European carmaker Stellantis, after they experienced lower-than-expected interest in car-sharing services.

As part of the deal with VW, Miles Mobility will order more than 10,000 all-electric vehicles from VW's stable of brands, including Audi and Seat cars.

Miles Mobility already runs a fleet of 9,000 vehicles across eight German cities, including Bonn, Cologne and Munich, and two cities in Belgium.

"With a strong partner to operate the fleet and with vehicles from various Volkswagen group brands, car sharing will become available to an even broader spectrum of customers," Dahlheim said in a statement.

German automotive expert Ferdinand Dudenhoeffer said VW's decision to sell its WeShare service showed that car-sharing remained a "niche market" that carried "considerable risks of losses".

Miles Mobility for its part said it aimed "to become the leading car-sharing platform in Europe" and welcomed the addition of VW's zero-emission cars to its fleet.

"The electrification of our fleet is a cornerstone of the Miles strategy towards sustainable urban transport," it added.

DUBAI — Most of the Middle East and North Africa's non-oil producing economies are experiencing a "gradual slowdown", the International on Monetary Fund (IMF) said on Monday, while resource-rich states are benefiting from high fossil fuel prices.

Despite soaring inflation and murky economic prospects worldwide, the IMF maintained its projection of 5 per cent growth for the region in 2022, dropping to 3.6 per cent in 2023.

But the figures, although higher than elsewhere in the world, don't reflect the region's "challenges", Middle East and Central Asia Director Jihad Azour told journalists in Dubai.

The Middle East and North Africa region varies wildly, from low-income states growing at just 0.8 per cent to the wealthy Gulf monarchies that are running at 6.5 per cent economic growth, according to the IMF.

"Almost two-thirds of the non-oil countries in the region are witnessing a gradual slowdown," he said, presenting the IMF's latest regional report which includes Iran but not Israel.

"[This] is expected because of the repercussions of the global slowdown and also the impact of monetary policy to address inflation, and the rise in interest rates."

"The real issue is the combination of new vulnerabilities," Azour said, highlighting inflation that is projected at 14.2 per cent this year and to remain in double digits for the fourth straight year in 2023.

Even the Gulf countries will retreat to 3.6 per cent growth next year on lower demand and production, the IMF said.

Underlining the sombre global outlook in the next 12-18 months, Azour urged the region's governments to accelerate reforms and set up social security safety nets to protect their populations.

AMMAN — Arab Bank Group delivered strong financial performance in the first nine months of this year, reporting net income after tax of $405.8 million as compared to $271.7 million for the same period last year with an increase of 4 per cent. The Group’s core banking activities kept up the momentum in most areas of operations delivering solid underlying growth in loans and deposits.  At the end of September 2022, loans were up by 4 per cent from September 2021 level to reach $35.6 billion, while deposits reached $47.8 billion, up by 3 per cent from the 2021 level. 

Mr Sabih Masri, chairman of the board of directors, stated that the strong performance shows the growth potential and resilience that diversification brings to the Bank despite the challenging economic environment. Mr Masri expressed his confidence in the Bank’s ability to continue to grow based on its sound strategy, while maintaining the strength of its balance sheet.

Ms Randa Sadik, chief executive officer, stated that the underlying results reflect Arab Bank’s earnings capacity strength with 13 per cent growth in net operating income across the Bank’s lines of business. This is primarily driven by the increase in total net interest and commission income; in addition to the controlled operating expenses. Ms Sadik added that the Group’s liquidity and asset quality remains solid where loan-to-deposit ratio stood at 74.3 per cent, and credit provisions held against non-performing loans continue to exceed 100 per cent. Arab Bank Group maintains strong capital base that is predominantly composed of common equity with capital adequacy ratio of 16.4 per cent.

Ms. Sadik noted that Arab Bank is on track to deliver its strategic digital transformation objectives, providing a comprehensive range of banking solutions and seamless customer experiences across the network and segments.

Earlier this year, Arab Bank was named “Best Bank in the Middle East 2022” for the seventh consecutive year by New York-based international publication “Global Finance”.

LISBON — One of the world's biggest technology get-togethers kicks off in the Portuguese capital on Tuesday, with organisers saying a key aim is to ask tough questions about cryptocurrencies.

Around 100,000 people are expected to gather in Lisbon for the four-day Web Summit and related events, the first full-scale edition since 2019 following the disruption of the pandemic.

The conference attempts to bring together start-ups, investors, business leaders and agenda-broadening speakers — linguist Noam Chomsky and heavyweight boxing champion Oleksandr Usyk are among this year's lineup.

Several of the prime slots, though, are taken by cryptocurrency specialists led by Changpeng Zhao, boss of crypto exchange Binance.

And plenty of companies present — from start-ups to billion-dollar behemoths Yuga Labs and OpenSea — are promoting the technology that fans claim will be the future of the web, gaming and ultimately the entire financial system.

But crypto has so far been derided as a tool to generate investment bubbles, hide illicit wealth and enable scams.

Conference organiser Paddy Cosgrave told AFP there were "a lot of questions to be answered" about crypto, describing it as "largely smoke and mirrors".

"We've done our best to persuade many of the leading lights in the space to come and some of them will get a bit of a kicking on stage, we'll see how that goes," he added.

Crypto sceptics including actor Ben McKenzie (Gotham, The O.C.) have also been given slots.

Organisers said the event's 70,000 tickets had sold out, with Cosgrave reckoning some 30,000 more people would be in Lisbon for side events.

Whistleblower focus 

Zhao's company is the dominant player in the crypto sector, but it has been repeatedly accused of trying to dodge regulatory scrutiny — claims the company has denied.

And it became embroiled in one of the biggest stories of the week, with a $500 million investment to back Elon Musk's takeover of Twitter.

But the wider crypto sector is struggling with plunging values and flatlining interest from the public.

And the tech industry as a whole is also struggling with supply chain problems, trade disputes between the US and China, and economic volatility that has sent investors fleeing.

Cosgrave, though, played down any suggestion that conferences like his had a role in helping to stimulate investment or turn around the fortunes of the sector.

"It's not really about the establishment or the dominant companies of today," he said.

"It's a gathering of companies that in the future may play some significant role."

As usual, though, the Web Summit will host plenty of figures from the dominant companies — Amazon, Apple, Google and Meta will all be there.

But on a lower level than last year, when the conference played host to Facebook's Nick Clegg and to whistleblower Frances Haugen, who accused their company of stoking hatred in return for clicks.

Cosgrave highlighted the event's history of giving a platform to whistleblowers — this year Mark MacGann, who revealed details of Uber's aggressive lobbying, will be giving a talk.

The organisers say more than 1,000 speakers will take part, giving talks on subjects from cyber security to artificial intelligence.

NEW YORK — Tech shares were back on their front foot on Friday following solid Apple results, boosting the Nasdaq nearly three per cent and adding to weekly gains.

Apple, the biggest company in terms of market value, soared nearly 8 per cent after reporting higher profits despite lower-than-expected iPhone sales. 

Apple's surge helped offset a comparable drop in Amazon shares on a disappointing holiday-quarter forecast and added to buying momentum on Wall Street following a mixed day in global bourses and a drop in oil prices.

"The stock market showed impressive resilience today," observed Briefing.com after the Dow's sixth straight positive session.

The gains by Apple helped prompt an advance by large tech companies like Microsoft and Google parent Alphabet that were punished earlier in the week in a pullback that investors feared could mark a major negative turning point for tech giants.

Art Hogan, analyst at B. Riley Financial, said tech shares benefited Friday from an "oversold rebound", adding that semiconductor shares were lifted by Facebook parent Meta's plan to boost investment in the metaverse.

Stocks have also been boosted in recent sessions by hopes the Federal Reserve will soon moderate its policies to counter inflation.

Markets largely shrugged off a mixed US economic data that showed inflation lingering but also a jump in household spending. 

In Europe, Germany's economy unexpectedly grew in the third quarter, but slowing growth in France and Spain added to fears that high inflation and an energy crisis will tip the region into recession.

"Today's positive growth data is a welcome surprise. However, it does not mean that the German economy will be able to prevent a recession," said ING economist Carsten Brzeski.

Elsewhere, the yen was down against the dollar after Japan's Prime Minister Fumio Kishida said the country would spend $260 billion on a stimulus package to cushion the weak economy.

The yen has plunged to 32-year lows versus the dollar in recent weeks as Japan's central bank refuses to hike interest rates despite sky-high inflation, fuelled by soaring energy prices.

"The Japanese yen is once again the worst performer today after the Bank of Japan kept its monetary policy unchanged," said market analyst Michael Hewson at CMC Markets.

CAIRO — Egypt has clinched a $3 billion loan deal with the International Monetary Fund (IMF) conditioned on a currency depreciation and state subsidy cuts, the government said on Thursday.

The Egyptian pound shed 17 per cent of its value against the dollar after the staff agreement was announced.

Egypt has been battered by inflation and is among the world's top five countries most at risk of defaulting on its foreign debt, according to the international credit rating agency Moody's.

The IMF deal is conditioned on reforms that include further cuts to subsidies, bringing yet more pain for struggling households in the Arab world's most populous nation.

In August, global investment firm Goldman Sachs estimated that Egypt would need about $15 billion in funding to be able to repay its foreign debt, currently estimated at about $150 billion.

In addition to the latest $3 billion loan, Egypt has also unlocked another $1 billion from the IMF from a facility dedicated to developing countries, Prime Minister Mostafa Madbouly said Thursday.

The loan programme is scheduled to run for four years and is due to be sent to the IMF board of directors for approval in December, Madbouly said.

He added that Egypt had also received an additional $5 billion from "regional and international organisations", without specifying which.

The IMF meanwhile said in a statement that its staff and "the Egyptian authorities have reached a staff-level agreement on comprehensive economic policies and reforms to be supported by a 46-month Extended Fund Facility Arrangement of $3 billion".

Plunging currency 

Egypt has been dependent on bailouts both from the IMF and from Gulf allies, particularly since the 2013 ouster of Islamist late president Mohammed Morsi.

The Egyptian tourism sector — already battered by extremist attacks and the coronavirus pandemic — and the major wheat importer's food industry have lately been hit hard by Russia's invasion of Ukraine.

With the latest depreciation, Egypt's local currency has shed a total of 47 per cent of its value since the start of the year, going down to 23 pounds against the greenback as markets closed Thursday, down from 15.6 pounds in a matter of months.

The pound's continued free-fall against the dollar has caused many importers to stop bringing in goods.

The pound previously saw a dramatic devaluation in 2016 when it shed need nearly half its value overnight.

Inflation has also surged recently, reaching 15.3 per cent in September, driven by the skyrocketing food prices.

Non-oil private sector activity has continued to contract since 2017, while experts fear an impending real estate bubble as the military continues to launch massive-scale development projects that often lack financial transparency.

LONDON — The euro on Wednesday jumped back above parity with the dollar, the US currency sliding against its main rivals on concerns over the world's biggest economy and the prospect of slower interest rate hikes.

The euro bounced back above one dollar for the first time since mid-September, helped also by expectations of a big interest-rate hike from the European Central Bank on Thursday.

There were large gains against the dollar also for the British pound and yen, helping them recover some ground following the recent sharp losses.

The dollar retreated following "a string of negative [US] economic data released since the beginning of the week", noted ActivTrades senior analyst Ricardo Evangelista.

Poorly received data, including slower house price growth and weaker consumer confidence, showed that big rate hikes from the Federal Reserve (Fed) are "starting to open some cracks in the American economy", he said.

"The Federal Reserve has been hiking rates aggressively in an attempt to bring inflation under control and the country's economy is starting to suffer as a result," Evangelista added.

Risk investments rebound 

A string of poor economic news has been welcomed by investors as it opens up the possibility that the Fed can slow down or end its interest rate hikes sooner. The recent news has seen risk investments like equities rebound in recent weeks.

The Bank of Canada on Wednesday increased its main rate by a smaller than expected 0.5 percentage points.

Market analyst Michael Hewson at CMC Markets said the move "suggests that central banks are starting to wake up to the possibility that too aggressive rate rises could do more harm than good".

He added: "It's also got markets asking the question, could the Fed follow suit next week after another poor set of housing numbers from the US?"

Wall Street, which had opened lower on poor results from tech giants, was mostly higher in late morning trading.

In Europe, London, Frankfurt and Paris stocks all ended the day higher.

Sterling on Wednesday jumped more than 1 per cent against the dollar, winning a boost also from markets welcoming the appointment of Rishi Sunak as prime minister.

The move was seen as offering stability to the UK economy after weeks of upheaval fuelled by predecessor Liz Truss's tax-cutting budget.

"The pound pushed back above the 1.1600 area against the US dollar today and risen against the euro despite the prospect that next week's budget statement has been delayed until 17th November in order to allow time" for updated fiscal forecasts, said Hewson.

NEW YORK — General Motors (GM) confirmed its full-year financial forecast Tuesday, lifting shares as it reported strong consumer demand in spite of a "challenging" environment with grinding inflation.

The big US automaker scored a 37 per cent jump in third-quarter profits to $3.3 billion, bolstered by strong vehicle pricing in a market with historically low auto inventories. 

Revenues jumped 56 per cent to $41.9 billion, a quarterly record.

GM Chief Financial Officer Paul Jacobson acknowledged rising worries about the drag from inflation on economic growth, but said the company was still seeing robust demand for its products.

"We haven't seen any direct impact on our products. Pricing remains strong, demand remains strong for our product," Jacobson said on a conference call with reporters.

"I think we can't ignore what others are saying out there and what others are seeing out there," he said. "So we're going to continue to be agile, with both our cost investments as well as our production."

"But we continue to see that strong demand so the best we can do is be prepared for it." 

GM benefitted from increased auto deliveries worldwide, including in North America where it shipped around 75 per cent of the partially-built autos from the prior quarter that had been suspended due to shortages of key materials.

Like other automakers, GM's operations have been constrained by limits on components, especially semiconductors.

The Detroit-based company pointed to "improvements" in the supply chain and semiconductor availability, but said it still faced "commodity and logistic challenges", according to its earnings presentation.

"I wouldn't say we're completely out of it yet," GM Chief Executive Officer Mary Barra said of the semiconductor issue. "It's more volatile than I would expect at this point. But we're continuing to work through the different challenges and quarter by quarter, we're seeing it improve."

In an interview with CNBC, Barra said GM was better positioned for a potential recession than in the past because inventories — while elevated compared with a few months ago — remain lower than historical averages.

"We have the ability right now because inventories are so low to really monitor the situation," Barra said, adding that "we're much better prepared to manage if we do move into a recession or have challenges from a demand-side perspective".

The results translated into higher-than-expected profits per share, but revenues slightly lagged analyst expectations.

Shares rose 3.1 per cent to $37.04 in pre-market trading.