Company news in brief

FedEx warning drives worst decline in stockFedEx Corp's shares on Friday had their worst day ever and closed at the lowest price since early pandemic months, after the delivery heavyweight pulled its forecast, feeding into fears of a global demand slowdown while piling more pressure on its new chief executive for a quick turnaround.The company's preliminary results for the fiscal first quarter sent the stock tumbling over 24% to a session low of US$155, the lowest since July 2020, with the company wiping off about US$12.5 billion in market capitalisation.The stock's drop on Friday surpassed its previous steepest one-day percentage decline of 16.4% on Black Monday in 1987.FedEx's gloomy outlook for fiscal 2023 comes amid investor anxiety that the US Federal Reserve's rapid pace of interest rate hikes to tame soaring inflation threatens to tip the economy into a recession.The US firm joins global logistics peers such as Hong Kong's Cathay Pacific Airways and France-based transporter CMA CGM in signalling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping. – ReutersDelta Air Lines readies refineryDelta Air Lines Inc plans to start receiving shipments of renewable fuel feedstocks at its Trainer, Pennsylvania, refinery as part of a strategy that could reduce its environmental liabilities by hundreds of millions of dollars, according to three sources familiar with the matter.The move suggests a shift in strategy for Delta subsidiary Monroe Energy, which in the past has been among the smaller refiners that have tried to pressure the US Environmental Protection Agency and the White House to reform biofuel laws.Delta bought the Pennsylvania oil refinery 10 years ago in order to save money on jet fuel costs, the first-ever purchase of a refinery by an airline.The refinery is expected to start importing agricultural products such as soybean oil, which can be used to make a biomass-based diesel that satisfies federal blending requirements.Delta's refining income has soared this year as global refining margins surged following Russia's invasion of Ukraine.In the first six months of 2022 Delta's refining arm earned US$323 million, compared with a loss of US$283 million in the first six months of 2021. The refinery had struggled to make money since it was purchased by the airline, which has attempted several times to sell it. – ReutersPorsche IPO to comprise 911 mln sharesVolkswagen's supervisory board met yesterday to move forward with the IPO of its Porsche brand, which will comprise 911 million shares in a nod to its most famous model, two sources close to matter said.The 911 million Porsche AG shares will be divided into 455.5 million preferred shares and 455.5 million ordinary shares, according to the website for the share placement. Only the preferred shares will be listed.Porsche SE, Volkswagen's top shareholder, has already committed to buying 25% plus one of the ordinary shares at a 7.5% premium to the preferred shares.A stock exchange prospectus is expected to be published today, the sources said, after which institutional and private investors can subscribe to Porsche shares.Investor interest in the initial public offering (IPO) is still strong, two of the sources said, despite concerns raised about governance in regard to Oliver Blume's dual role as CEO of Volkswagen and Porsche.Porsche's valuation is likely to be between 70 billion and 80 billion euros (US$70-80 billion), one of the sources said, playing down an analyst note from HSBC last week that valued the sports car maker at a much lower 44.5-56.9 billion euros. - ReutersOpel stops planned China expansionGerman carmaker Opel has stopped a planned expansion into China amid geopolitical tensions between Beijing on one side and the United States and European Union on the other, the Handelsblatt daily reported on Friday, citing sources.A company spokesperson confirmed the decision to Handelsblatt, citing current challenges in the auto sector.In addition to geopolitical tensions, China's strict zero-Covid policies are making entry into the already competitive market even more difficult, Handelsblatt reported.The carmaker was also lacking in attractive models to set it apart from local manufacturers, the report said - a challenge shared across foreign automakers battling to make inroads, particularly in China's electric vehicle landscape.Auto demand in China has been hit by power restrictions and extensive lockdowns in major cities, with Volvo, Toyota and Volkswagen either suspending production or putting their factories into closed-loop systems, which generally still impacts output. – ReutersJPMorgan reduces credit to metal clientsJPMorgan Chase & Co has reduced lending to China's Tsingshan, one of the world's top nickel producers, while also paring back credit to other customers in Europe and Asia after a review of risk, sources close to the situation said.Tsingshan Holding Group was at the centre of a crisis on the London Metal Exchange in March when nickel prices more than doubled in a matter of hours, forcing the LME to halt trading and cancel billions of dollars in deals.Tsingshan has approached at least two LME brokers to become a client or increase credit lines after JPMorgan's actions, two sources with knowledge of the matter said.JPMorgan is one of the biggest banks in metals and its paring back of finance is sending a chill throughout the sector, two of the sources said.JPMorgan has curtailed credit to several customers in Asia and Europe or given them notice that it will do so by the end of the year, said five sources, who declined to be named because they were not authorised to speak to the media. – Reuters

Company news in brief

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Namibian Sun 2024-11-27

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Company news in brief

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Namibian Sun 2024-11-27

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