LONDON (Alliance News) – The following is a summary of top news stories Tuesday.
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COMPANIES
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US technology giant Apple must pay Ireland up to a record EUR13 billion in illegally granted tax benefits, the European Commission ruled, in an eagerly awaited landmark decision that Ireland now plans to appeal. “Ireland granted illegal tax benefits to Apple which enabled it to pay substantially less tax than other businesses over many years,” said EU Competition Commissioner Margrethe Vestager. “This selective treatment allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003, down to 0.005% in 2014,” she added. The Apple case, which the commission has been looking into since mid-2013, is one of several high-profile probes into tax deals that EU member states granted multinationals including Starbucks, Amazon.com, and McDonald’s.
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Royal Dutch Shell said it has agreed to sell four blocks it owns in the Gulf of Mexico to EnVen Energy Corp for USD425.0 million in cash, plus future royalty payments. Shell said it will sell its wholly-owned Green Canyon blocks 114, 158, 202 and 248 to EnVen with the expectation that the deal will close in October. The four blocks to be sold are better known as the Brutus/Gilder assets. The Brutus/Glider assets include the Brutus tension leg platform, the Glider subsea production system, and the oil and gas lateral pipelines used to transport production from the platform. The assets currently have a combined production rate of around 25,000 barrels of oil equivalent per day, Shell said.
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The chief commercial officer of BHP Billiton said the tailings dam disaster at the Samarco joint venture in Brazil had a “devastating impact” and said it has reviewed how such dams are managed across its entire portfolio. The Samarco accident killed numerous people and caused damage to the area surrounding the operation back in November last year when a tailings dam burst. The operation is a 50:50 joint venture between BHP and Brazilian firm Vale. “In November 2015, BHP Billiton committed to making the findings of this investigation public, and we are determined to learn from this tragedy,” said BHP’s Chief Commercial Officer Dean Dalla Valle.
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Anglo American said it has completed the sale of its 70% interest in the Foxleigh coal mine in Queensland, Australia, to a consortium led by Taurus Fund Management. Anglo American, which originally announced the signing of the sale and purchase agreement for the asset on April 4, said the terms of the transaction remain confidential. Foxleigh is an open-cut coal operation which produced 1.86 million tonnes of high-quality pulverised coal injection coal for Anglo American in 2015. The asset is one of many to be offloaded by the miner to raise funds to reduce debt, as Anglo restructures to cope with weak commodity market conditions.
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Bunzl said revenue and profit both saw material growth in the first six months of 2016 as the international distribution and outsourcing group also revealed it has acquired some new businesses. Bunzl said pretax profit in the first six months of 2016 increased by 6.0% to GBP155.6 million from GBP147.1 million as revenue rose 10% to GBP3.44 billion from GBP3.15 billion. Bunzl raised its interim dividend by 11% to 13.0 pence from 11.75p. Bunzl also said it has acquired two companies in Canada and agreed to by another business in Hungary.
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Petrofac said it returned to profit in the first half of 2016 on a rise in revenue, allowing the company to maintain its dividend for the period, as the oilfield services firm also named its new chief financial officer. Petrofac said it made a net profit of USD12.0 million in the first six months of 2016, turning from the USD182.0 million net loss in the same period a year earlier, after revenue increased to USD3.88 billion from USD3.18 billion. Notably, if the exceptional charges arising from the Laggan-Tormore project are excluded, the net profit amounted to USD236.0 million in the period, up from USD130.0 million last year.
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Polymetal International said it has completed construction of its Svetloye mine in Okhotsk in Russia nine months ahead of the original schedule. The mining company said total capital expenditure for construction totalled USD60 million, which is 33% below initial project estimates due to the devaluation of the Russian rouble. The leaching process commenced on August 15, and the first 10,000 ounces of gold were produced at the Merrill Crowe circuit on Monday.
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MARKETS
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London shares were mixed after the long bank holiday weekend in the UK with the mining sector weighing on the FTSE 100 index. The pound was lower against the dollar as data showed UK mortgage approvals declined to the lowest level since early 2015. Wall Street was pointed to a lower open.
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FTSE 100: up 0.2% at 6,848.48
FTSE 250: down 0.1% at 17,919.53
AIM ALL-SHARE: up 0.4% at 795.92
GBP: down at USD1.3076 (USD1.3184)
EUR: down at USD1.1169 (USD1.1257)
GOLD: down at USD1,319.66 per ounce (USD1,330.60)
OIL (Brent): down at USD49.56 a barrel (USD50.05)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK mortgage approvals declined to the lowest since early 2015, the Bank of England reported. The number of mortgage approvals fell to 60,912 in July from 64,152 in June. This was the lowest since January 2015. Economists had forecast approvals to fall to 61,900. Consumer credit rose by GBP1.2 billion in July compared to June’s increase of GBP1.9 billion. The pace of increase was slower than the expected growth of GBP1.7 billion. Lending secured on dwellings increased by GBP2.7 billion in July, slower than a GBP3.2 billion rise seen in June. Secured lending was expected to rise by GBP3.1 billion.
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The UK Home Secretary travels to Paris to meet her French counterpart amid growing fears the French could axe British border controls in Calais and send the Jungle camp to Dover. Amber Rudd is due to discuss security with French Interior Minister Bernard Cazeneuve during the scheduled trip on Tuesday – her first official overseas engagement since taking up the post. It comes after a growing number of prominent French politicians have warned that France might tear up the deal which allows British border checks to be carried out in Calais unless radical changes are made. Xavier Bertrand, president of the Hauts-de-France Nord Pas De Calais-Picardie region which includes Calais, told the BBC Radio 4 Today programme he wants a “new treatment” for asylum seekers trying to get to Britain from France.
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IRELAND AUG UNEMPLOYMENT RATE STABLE AT 8.3%
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The jobless rate in Japan came in at a seasonally adjusted 3.0% in July, the Ministry of Internal Affairs and Communications said. That beat forecasts for 3.1%, which would have been unchanged from the June reading.
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Retail sales in Japan fell 0.2% on year in July, the Ministry of Internal Affairs and Communications said. That beat forecasts for a decline of 0.9% following the upwardly revised 1.3% contraction in June (originally -1.4%).
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A powerful typhoon accompanied by heavy rain and strong winds slammed into north-eastern Japan with authorities urging tens of thousands of residents to evacuate their homes. Typhoon Lionrock made landfall in the city of Ofunato, 400 kilometres north-east of Tokyo, shortly before 6 pm (0900 GMT). It is the first typhoon to directly strike north-eastern Japan since records began in 1951, the Japan Meteorological Agency said. The agency warned of flooding, mudslides and swollen rivers in the north-east and on the northern island of Hokkaido, while the storm could generate waves of up to 8 to 10 metres.
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President Dilma Rousseff defended her record in office during her impeachment trial Monday in the Brazilian Senate, rejecting charges of corruption and warning of a rupture in the country’s democracy. “We are faced with a coup,” the leftist Worker’s Party (PT) leader said in an emotional and combative speech that could well be her last as president. Rousseff, 68, is charged with manipulating government accounts to obscure the country’s deteriorating budget situation during her 2014 re-election campaign. She is also accused of authorizing lines of credit without congressional approval.
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The Italian government was forced into an embarrassing U-turn, after the remote mountain community that suffered the heaviest death toll from last week’s earthquake protested proposals to hold a funeral service somewhere else. Rather than in the stricken town of Amatrice, authorities had suggested that a Mass could take place Tuesday in the provincial capital of Rieti, where dozens of bodies had already been taken. The city is at least 1 hour’s drive away.
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Syrian rebels backed by the Turkish army took control of 11 villages from Kurdish-led forces in the north of the country in the past two days, while capturing only two new villages from Islamic State, the Syrian Observatory for Human Rights reported. Turkey is now fighting a three-front war against Kurdish militants: on its own soil, in Syria and most recently in Iraq. The escalation in fighting between Turkish forces and their rebel allies and the Kurdish-led fighters has sparked concern from the US that the war against Islamic State, its top priority, could be negatively affected.
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A top aide to Democratic presidential nominee Hillary Clinton announced she will separate from her husband after he was caught in another embarrassing sexting incident. “After long and painful consideration and work on my marriage, I have made the decision to separate from my husband,” Huma Abedin said in a statement. Abedin said she and her husband, former congressman Anthony Weiner, “remain devoted to doing what is best for our son” and asked for privacy.
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Wayne Rooney will continue his role as England captain, manager Sam Allardyce said. Rooney, England’s record goal scorer with 53, inherited the armband from Steven Gerrard in 2014. He captained the side at Euro 2016, where a shock loss to Iceland in the final 16 led to Roy Hodgson’s resignation as manager. Allardyce, who took over last month, called it an “easy decision” to stick with his 30-year-old skipper heading into qualifying for the 2018 World Cup.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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