Russian gas giant Gazprom yesterday announced a 5% fall in net profits in the first quarter of this year, as lower gas prices meant it failed to cover growing expenses.
From January to March the state-run behemoth registered a drop in profits to 362bn roubles ($5.6bn, €5bn) from 382bn roubles in the same period last year, a statement said.
The world’s largest gas company — which supplies around a third of Europe’s gas — has been hit by a drop in gas prices linked in part to the falling price of oil.
The drop in profits comes despite a rise in overall revenues to 1.74tn roubles, up just over 5% from 1.65tn roubles for the first quarter of 2015.
The overall volume of gas sold increased 9% to 144bn cubic metres of gas. The volume shipped to the key markets of Europe and Turkey rose by 49% but the net value of those sales only rose 22 %. The volume of sales to other former Soviet nations fell by 16%, due in part to Ukraine turning its back on Russian supplies against the backdrop of its broader feud with Moscow.

Wendy’s
Burger chain Wendy’s Co reported lower-than-expected quarterly comparable sales yesterday as a fall in grocery prices encouraged more diners to eat at home, sending the company’s shares down as much as 8%.
Total sales fell 22% to $382.7mn as the company franchised more outlets, but beat the average analysts’ estimate of $367.6mn, according to Thomson Reuters I/B/E/S.
Net income fell to $26.5mn, or 10 cents per share, in the second quarter ended July 3 from $40.2mn, or 11 cents per share, a year earlier.Food prices have been on the decline in 2016, according to the US Department of Agriculture.
Poultry prices dropped 3.4% in June from a year earlier, while beef and veal prices fell 6.7%, helped by lower transportation costs due to a fall in oil prices and the strength of the dollar, which has made imports cheaper.
Egg prices, which peaked during the avian flu outbreak last year, were 26.9% cheaper.
Restaurants, however, have not to been able to pass on the full benefits as their labour costs have risen substantially due to increases in minimum wages.
Against this background, fast-food chains including McDonald’s Corp, Dunkin’ Brands Group and Starbucks Corp, as well Wendy’s, posted disappointing same-restaurant sales for the quarter.

Kors
Michael Kors Holdings reported a bigger-than-expected drop in quarterly comparable sales as fewer shoppers visited malls and a strong dollar discouraged tourists from spending on its handbags and accessories.
Shares of Kors, which also forecast current-quarter sales below analysts’ expectations, were slightly higher in volatile trading yesterday after falling as much as 3% earlier.
Kors’ revenue rose slightly to $987.9mn in the quarter ended July 2, beating the average estimate of $953mn.
Demand increased in Europe, mainly for “cross-bodies, small leather goods and athletic footwear”, while handbag and watch sales weakened, Idol said.US retailers have been hurt as shoppers turn to the internet, reducing their visits to malls.
Luxury goods makers such as Kors and rival Coach Inc have also tightened supply to department stores to avoid deep discounting on their products, which they fear will erode their brand value.
Its profit forecast of 84-88 cents per share was also below the average estimate of $1.03.
Net income dropped 15.7% to $146.3mn, or 83 cents per share.

Cargill
Global commodity trader Cargill yesterday said it turned in a quarterly net profit, boosted by special gains that offset poor results from trading and oilseed processing.
Revenue for the privately held company declined for the eighth straight quarter.
Minnesota-based Cargill reported net income of $15mn for the fourth quarter ended May 31, compared with a net loss of $51mn a year earlier.
Revenue fell 5% to $27.1bn.
Excluding items such as inventory adjustments and gains or losses from sales of assets, the company posted an operating loss of $19mn, compared with a year-earlier profit of $230mn.
Cargill’s report was the latest in a series of disappointing financial statements from agriculture-focused companies.
Rival agribusiness Archer Daniels Midland Co last week reported a sharply lower quarterly profit due to volatile grain prices and weak trading and processing margins.
Bunge, another Cargill rival, posted higher earnings but warned of near-term headwinds due to tightening margins.
After ample global crop supplies had limited trading opportunities for large grain companies earlier this year, a weather-related harvest shortfall in South America riled markets this summer and caught some traders wrong-footed.
Cargill is in the midst of a restructuring aimed at making itself more responsive to commodity market swings.

HKEX
Tumbling volumes at the London Metal Exchange (LME) helped depress first half-profits at its parent, the Hong Kong bourse, but fee cuts on short-dated trades will hopefully boost trade in the second half, the bourse’s head said yesterday.
Also, a new spot commodity platform on mainland China will begin testing in the fourth quarter, Charles Li, chief executive of Hong Kong Exchanges & Clearing’s (HKEX), told a results presentation.
HKEX second-quarter net profit slumped 38% as falling trading volumes pushed down fees for buying and selling shares and commodities contracts. Contributing to the overall HKEX earnings decline, daily traded volumes on the LME shrunk by 9% in the first half due to difficult market conditions, HKEX said, and after higher fees discouraged trading on the metals bourse.
Last week, the LME said it will cut fees for short-dated trades from Sept.
1, in what sources say was an attempt to halt the slide in trading volumes since charges were raised across the board last year.
Volumes on the 139-year-old LME have been falling since trading fees rose an average 31% in January 2015.
The average daily number of metals contracts traded on LME fell to 635,111 lots from 695,588 lots in the first half of last year.
Core first-half earnings of HKEX’s commodity division — almost exclusively LME business — slumped by 19% to HK$513mn as trade in metals declined while hiring linked to a new spot commodities trading platform in China drove up costs.
Trading fees fell by 11% due to the drop in daily average volumes, as well as the effect of incentive rebates introduced in the third quarter of 2015, it said.
Operating expenses jumped by 15%, mostly due to hires for “strategic initiatives” such as HKEX’s plan to roll out a spot commodities trading platform in Shenzhen.

Prudential
Insurer Prudential could shift more funds from its asset management business to Dublin or Luxembourg to maintain access to the European Union’s single market after Britain’s vote to leave the bloc, its asset management boss said yesterday.
Prudential, like other British insurers, has experienced volatility in its share price from the uncertainty caused by the Brexit vote at the end of June.
But the life insurer is concentrating its growth efforts on Asia, which contributes around a third of its operating profit.
“At the group level, the immediate impact of Brexit will not be material,” chief executive Mike Wells told reporters on a conference call. “Asia has been and will continue to be the growth engine of this group.”
But Prudential said in a statement accompanying its first-half results that its UK-domiciled operations, including fund management division M&G, could be hit by Brexit.
M&G chief executive Anne Richards told reporters the company could increase the number of its funds domiciled in Dublin and Luxembourg, depending on the outcome of Brexit negotiations.
M&G said shortly after the Brexit vote that it was looking at expanding its operations in Dublin.
The company reported a forecast-beating 6% rise in first-half operating profit to £2.06bn ($2.69bn) yesterday, led by Asian growth. Analysts had expected group operating profit of £1.88bn, according to a consensus forecast compiled by the company.

Interserve
Interserve, a British support services and construction company, said it would exit its energy-from-waste business, after it took a £70mn ($91mn) charge in the first half from cost overruns and delays in a contract in Glasgow.
Interserve also said its outlook for the full year remained unchanged despite the increased political and macro-economic uncertainty following Britain’s vote to leave the EU.
The outsourcing company has reported a 2.1% rise in headline operating profit to £62.9mn in the six months ended June 30.
The company, whose activities range from providing care services for people in their own homes to building repairs at Britain’s Sandhurst military academy, said the energy-from-waste business has six contracts signed between 2012 and 2015, with total whole-life revenue of £430mn ($561mn).
“Every pound of revenue is valuable of course, but we are interested in the revenue that we generate profit from, not the revenue that we generate losses from,” Chief Executive Adrian Ringrose told Reuters.
“I think exiting that part of our business will be a very beneficial thing to do,” he added.
Interserve said it expects to complete these contracts during 2017 and the impact of these contracts on its income statement would be contained within the previously announced charge.

Adecco
Adecco has not been hit so far by Britons’ vote in June to leave the European Union, Chief Executive Alain Dehaze said yesterday, forecasting modest growth ahead for the world’s biggest staffing group.
“We don’t see any material impact of Brexit, either in the UK or in the neighbouring countries and the UK’s trading partners,” he told Reuters after the company posted in-line results for the second quarter.
Adjusted for trading days, Adecco generated organic revenue growth of 3% in the quarter, in line with rival Randstad.
Volume growth in July was similar to June, it added.
Organic revenue in the United Kingdom and Ireland, its third-biggest market, rose a headline 6% as growth in professional staffing and information technology helped offset a decline in finance and legal.
In France, its biggest single market, growth was recovering after a May marred by strikes and bad weather.
“We have seen a continuation of this modest growth and slow recovery in France in the month of July and also since the beginning of August,” Dehaze said, adding September would be key as clients return from holidays and size up their order books.
Staffing companies are seen as bellwethers for the broader economy, with companies often taking on temporary staff at the beginning of a recovery or releasing temporary workers when a downturn begins to bite.
Adecco’s stock has been one of the weakest performers among Swiss blue chips this year, losing more than a fifth as investors took fright over uncertainty in the wake of events like the Brexit vote. Dehaze gave a moderately upbeat assessment of market conditions.”The growth is continuing.
It is modest growth, 4% organic, but we don’t see any slowdown with a France that is robust, a little bit softer in North America.”
Revenue in North America eased 1% in the quarter, and its operating margin there also contracted year on year.
Adecco’s net profit rose to €190mn ($211.8mn), just ahead of the average estimate of €188mn in a Reuters poll of analysts.

Yelp
Consumer review website operator Yelp swung to an unexpected second-quarter profit and raised its full-year revenue forecast as investments in sales and marketing led to more businesses and consumers signing up for its services.
The company also gave a better-than-expected revenue forecast for the current quarter and said it partnered with and made a small investment in Nowait, a mobile platform that allows restaurants to manage their waiting lists..
Yelp posted a net profit of $449,000, or 1 cent per share, for quarter ended June 30, compared with a net loss of $1.3mn a year earlier and $15.5mn in the prior quarter.
Revenue rose 29.5% to $173.4mn.
Analysts were expecting a loss of 7 cents per share and revenue of $169.8mn, according to Thomson Reuters I/B/E/S.
Yelp has been spending heavily to stay competitive in a market that includes everyone from heavyweights such as Alphabet’s Google and Facebook to smaller rivals such as GrubHub and start-ups like TaskRabbit.
The investments helped Yelp’s local advertising accounts rise 32% to about 128,400 in the quarter, compared with analysts’ average estimate of 128,100, according to FactSet StreetAccount.
“We see enormous opportunity within a local advertising and transactions and we remain focused on attracting more consumers and more businesses to Yelp,” Chief Executive Jeremy Stoppelman said on a conference call.
The San Francisco-based company raised its full-year 2016 revenue forecast to $700mn to $708mn from $690mn to $702mn.

Air Berlin
Air Berlin, Germany’s second largest airline reported a wider second-quarter operating loss and said the third quarter would be challenging after attacks in Europe deterred travellers.
The carrier, 29% owned by Abu Dhabi-based Etihad, said on Tuesday its second quarter loss before interest and tax (EBIT) totalled €62.7mn ($70mn), compared with a loss of 15.9mn in the second quarter last year.
Like other airlines in Europe, Air Berlin is feeling the impact of travellers becoming more cautious about taking trips after attacks in France, Belgium and Turkey.
“The demand, especially on flights to holiday destinations, suffered from terrorist attacks in Europe and had a major and negative impact on Air Berlin’s financial performance,” Chief Executive Stefan Pichler said in a statement.
Air Berlin and others have moved seats away from popular holiday destinations such as Turkey and Egypt to Spain but that has resulted in pressure on fares, Pichler said.
Air Berlin said the overall pressure on revenues from the weak market backdrop would also affect the third quarter, traditionally the peak summer holiday season when European carriers make most of their money.
The carrier, which has made a net loss in seven of the last eight years, is trying to attract more higher-paying business customers as part of a restructuring plan that aims to return it to profit. Last week, it announced new routes to the US and plans for a business class row on European short-haul flights.
The German airline’s revenue per available seat kilometre dropped by 6% in the second quarter while average fares dropped by 5.8%.

Valeant
Valeant Pharmaceuticals International reported an 11% fall in quarterly revenue, mainly due to faltering sales in its dermatology business.
The net loss attributable to the company rose to $302.3mn, or 88 cents per share, in the second quarter ended June 30 from $53mn, or 15 cents per share, a year earlier.
Revenue fell to $2.42bn from $2.73bn.
Valeant’s stock came under siege last year when questions about the company’s business and accounting practices spooked investors. The stock has lost nearly 90% of its value since hitting a record high of $253.57 last August.

McDonald’s Japan
McDonald’s Holdings Co Japan managed to swing to a small first-half operating profit, helped as sales staged a long-awaited rebound after slumping in the previous two years on a series of food safety scandals.
The Japan unit of McDonald’s Corp reported an operating profit of ¥47mn ($460,000) for January-June, compared with a ¥18.3bn loss for the same period a year ago.
Revenue climbed 23% to ¥104.9bn.
The company’s stock surged last month after it said its 3,000 outlets in Japan would host battles between Pokemon characters in the mobile Pokemon GO game but the shares have since given up most of those gains.
McDonald’s Japan maintained its forecast for a full-year operating profit of ¥3.3bn.
Any bump-up in revenue from Pokemon GO is not expected to be evident until the company reports for the current quarter ending on September 30.

Commonwealth Bank
Australia’s biggest lender Commonwealth Bank sounded a cautious note about the country’s economic outlook yesterday even as it posted a record Aus$9.23bn ($7.08bn) in annual profit.
The Commonwealth Bank’s performance is closely watched for guidance on the health of the Australian economy in the current low interest-rate environment.
CBA chief executive Ian Narev said the company remained positive about Australia’s economic prospects but warned that the nation’s nominal growth, which is not adjusted for inflation, needed to strengthen.
Cash profit, the bank’s preferred measure of earnings that strips out one-off costs, rose 3% to Aus$9.45bn for the year to June 30 compared to the previous 12 months, broadly matching analyst expectations.
Net profit was up 2% at Aus$9.23bn while cash earnings for the six months to June 30 slipped 3% compared to the July-December period.
Earnings from its retail banking division — the largest in the bank — rose 11% to Aus$4.44bn, while business and private banking grew by 5% for the period.
But CBA’s bad debts jumped 27%, weighing on profits, on higher provisions for resource, commodity and dairy exposures.
The bank announced a final dividend of Aus$2.22 per share, leaving the final payout to shareholders at Aus$4.20, which was unchanged from the previous year.
Shares in CBA closed 1.29% lower at Aus$77.40.
Australia’s economy is charting a rocky path away from mining-dependent growth, with the central Reserve Bank of Australia last week cutting interest rates to a record low of 1.5% to boost non-resources sectors. Banks’ profits have been under pressure in recent months amid uncertainties in financial markets and the economy, and over fears of rising bad loans.
Financial institutions are also having to deal with tougher regulations to dampen the housing market amid concerns the sector could overheat.

EON
German energy giant EON yesterday reported €3bn ($3.34bn) in losses over the first half of 2016 as it wrote down the value of traditional power infrastructure.
EON subsidiary Uniper, which brings together the firm’s non-renewable power operations, booked provisions and impairment charges on its power plants and gas storage facilities totalling €3.8bn.
That weighed on the group as a whole, which reported underlying profit as measured by EBITDA of €2.9bn — down 12% on the same period in 2016 — on revenues of €20.25bn.
But the firm insisted it was on course to meet its profit targets for the year as a whole.
“EON delivered solid first-half results in a persistently difficult environment,” chief financial officer Michael Sen said.
In its forecast, the firm said it expects underlying profit as measured by EBIT of between 2.7 and €3.1bn in 2016, for a net profit of between 0.6 and €1.0bn.
Uniper is to be spun off in a separate stock-market listing in September as part of EON’s long restructuring efforts, which saw the company report a €7.0bn net loss in 2015.
“Nothing more stands in the way” of the flotation after shareholders voted almost unanimously in favour at a June meeting, chief executive Johannes Teyssen said.
Like other big power utilities, EON has felt the pinch as Germany’s government mandated an expensive total shutdown of nuclear power and offered heavy subsidies to renewables, squeezing margins for traditional forms of electricity generation.
The company is also carrying a debt burden of €24.8bn, up from €21.3bn at the end of 2015 — an increase the firm said was largely due to increased pension provisions as interest rates declined further.

G4S
Britain’s G4S posted strong results yesterday, sending its shares soaring on signs the world’s largest security group had bounded back after previous scandals, helped by more demand for its services and a shift in focus away from the UK.
G4S, which runs services ranging from manned security in prisons to cash transportation, is selling weaker units in an overhaul after a string of high-profile contract problems in Britain, which now accounts for one fifth of its revenues.
Core profit of £199mn ($259.68mn) rose 8% helped by booming revenues from emerging markets, accounting for increasingly more than the UK and Ireland where the company has had a string of problems and is scaling back.
“Our strategy and our plans are now delivering tangible results,” Chief Executive Ashley Almanza said, adding that the company was concentrating on whittling down debt and delivering its overhaul.
Analysts had predicted the group could be vulnerable to the backlog in political decision-making in Britain after the vote to leave the European Union, a more sluggish domestic economy and a fall in the value of the pound making its debt in foreign currencies more expensive to service.
It was able to whittle down debt to 3.2 times core earnings from 3.3 times at the end of 2015 thanks to strong cash flow, offsetting the impact of weaker sterling on euro and dollar-denominated debt.
Shares in G4S jumped on relief that the dividend — seen as vulnerable by some analysts — was maintained at 3.59 pence per share and that the company would not seek to raise more funds, as some analysts had expected.
Demand for security services has been increasing, even before Islamist attacks in France and Germany this summer, which had little direct impact, CEO Almanza told Reuters.
“We have seen increased demand for security technology and consulting, but frankly we saw that before recent events in France and that has been a steady trend for the last three years.”
The firm appears to have put behind it a series of scandals, having gained notoriety in 2012 after failing to provide enough guards for the London Olympics in 2012.
It was later investigated by the Serious Fraud Office for overcharging the government to provide electronic tags for offenders, some of whom turned out to have been in jail or dead.
In June it emerged that a gunman who killed 49 people in a Florida nightclub was an employee. G4S denies its vetting was lax.