Economy
Mining gear maker Epiroc upbeat on outlook after profit jump
By Marie Mannes
STOCKHOLM (Reuters) -Swedish mining equipment maker Epiroc (ST:) expects to benefit from continuing high demand in the near term, it said on Tuesday as it posted better than forecast quarterly profit.
Epiroc, its customers and rivals have had to contend with rising raw material prices and other cost inflation pressures for several quarters, though raw material prices have eased slightly of late.
Shares in the company were up 3.2% at 206.6 Swedish crowns by 1228 GMT after earlier hitting a two-month high of 211.1 crowns.
“In the near term, we expect that the underlying demand, both for equipment and aftermarket (services), will remain at a high level,” it said in a statement accompanying second-quarter earnings.
Order intake was at 15.4 billion crowns for a net gain of 15% but was down 1% excluding acquisitions.
Epiroc is heavily reliant on sea freight to transport its large, heavy pieces of equipment to customers, but has had high inventory levels as capacity at harbours have been reduced.
CEO Helena Hedblom told Reuters that outbound shipping capacity at Gothenburg harbour remained a challenge early in the second quarter but had eased somewhat at the end of the quarter.
Chief Financial Officer Håkan Folin said on a call to analysts that the bulk of its current inventory was finished products already on ships on its way to customers, or waiting to be sent, and the company was hoping for its inventories to decrease as freight capacity improved.
Martin Persson, a manager at an equity fund that invests in Swedish large-cap companies at Swedish insurer Lansforsakringar, said overall Epiroc was a “great company where expectations are high,” with the results coming in line with his expectations.
“There were a few questions about its margins and inventory levels but I felt like they answered them well in the call,” Persson said.
Second-quarter operating profit before items jumped to 3.43 billion crowns ($337 million) from 2.8 billion a year earlier, beating the average forecast of 3.31 billion in a Refinitiv poll of analysts.
($1 = 10.1912 Swedish crowns)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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