2023-11-14 18:16

GRINDAVIK, Iceland, Nov 14 (Reuters) - Icelandic authorities were on Tuesday preparing to build defence walls around a geothermal power plant in the southwestern part of the country that they hope will protect it from lava flows amid concerns about an imminent volcanic eruption. Seismic activity and underground lava flows intensified on the Reykjanes peninsula near the capital Reykjavik over the weekend, prompting authorities to evacuate nearly 4,000 people from the fishing town of Grindavik on Saturday. The probability of an eruption remained high despite a decrease in seismic activity, the Icelandic Meteorological Institute said in a statement on Tuesday. Nearly 800 earthquakes were recorded in the area between midnight and noon on Tuesday, fewer than the two previous days, it said. "Less seismic activity typically precedes an eruption, because you have come so close to the surface that you cannot build up a lot of tension to trigger large earthquakes," said Rikke Pedersen, who heads the Nordic Volcanological Centre based in Reykjavik. "It should never be taken as a sign that an outbreak is not on the way," she said. Authorities said they were preparing to construct a large dyke designed to divert lava flows around the Svartsengi geothermal power plant, located just over 6 kilometres (4 miles) from Grindavik. Justice Minister Gudrun Hafsteinsdottir told state broadcaster RUV that equipment and materials that could fill 20,000 trucks were being moved to the plant. Construction of the protective dyke around the power station was awaiting formal approval from the government. A spokesperson for HS Orka, operator of the power plant, said it supplies power to the entire country, although a disruption would not affect power supply to Reykjavik. Almost all of Grindavik's 3,800 inhabitants were briefly allowed back to their homes on Monday and Tuesday to collect their belongings, Iceland's department of civil protection and emergency management said. In Grindavik, long cracks ran through the town centre, leaving its main street impassable, while steam could be seen rising from the ground. Some of the houses still had their lights on, but the town was deserted beyond the odd car and a handful of locals there to collect their most important belongings before Grindavik was once again declared out of bounds. Local resident Kristin Maria Birgisdottir, who works for the town municipality, told Reuters on Tuesday she only had the clothes she had worn for work on the day the town was evacuated. "I'm getting prepared in case I get a chance to visit my house and get some of my belongings," said Birgisdottir, who has moved to a summer house with her family. Some residents had to be driven into Grindavik in emergency responders' vehicles, while most inhabitants were allowed to drive into Grindavik in their private cars accompanied by emergency personnel. Most pets and farm animals had been rescued from Grindavik by Monday night, according to charity Dyrfinna. During the afternoon, new metres installed near Grindavik by the meteorological office detected elevated levels of sulphur dioxide, leading Grindavik to again be fully evacuated at short notice slightly ahead of schedule. The agency said in an update that while there were no other indications of an eruption starting, it could not be ruled out since the gas does not appear unless magma is high in the earth's crust. https://www.reuters.com/business/environment/iceland-shields-geothermal-plant-risk-volcanic-eruption-2023-11-14/

2023-11-14 17:53

OTTAWA, Nov 14 (Reuters) - The Trans Mountain oil pipeline expansion project on Tuesday said it had been allowed to resume work in a wetland area near Abbotsford, British Columbia, after correcting issues raised by the Canada Energy Regulator (CER). Earlier this month the CER ordered a halt on an 800-meter stretch after inspectors found several environmental and safety-related non-compliances. "Trans Mountain has received a notice to resume work from the Canada Energy Regulator ... Trans Mountain corrected all non-compliances in the region and is conducting safety inspections of all active sites to prevent any re-occurrence," it said in an emailed statement. The stop work order was the latest in a string of delays for the 590,000 barrel-per-day expansion project, which will nearly triple the flow of crude from Alberta to Canada's Pacific Coast once completed. Trans Mountain has said the expanded pipeline will start shipping crude late in the first quarter of 2024. Prime Minister Justin Trudeau's Liberal government bought the pipeline in 2018 to ensure the expansion went ahead. The project is expected to cost C$30.9 billion ($22.54 billion), more than four times the original estimate. ($1 = 1.3708 Canadian dollars) https://www.reuters.com/business/energy/trans-mountain-says-it-is-resuming-work-pipeline-british-columbia-2023-11-14/

2023-11-14 17:34

UK inflation data due on Wednesday BoE, Reuters poll both predict sharp fall in UK inflation BoE chief economist: inflation outlook 'finely balanced' Says wage growth still too strong BRISTOL, England, Nov 14 (Reuters) - The Bank of England's chief economist Huw Pill said there was still a risk that inflation would stay at high levels despite an expected fall in figures due on Wednesday, while fresh wage growth data remained too strong. Nearly two weeks after the BoE held interest rates at a 15-year high and said it was not close to cutting them despite a flat-lining of the economy, Pill said the outlook for inflation was "finely balanced". Last week, he said bets in financial markets that a first rate cut might come in August next year were not "totally unreasonable". But on Tuesday he sought to stress that the fight against inflation was far from over. "We did have this morning the latest official data on pay growth in the UK with pay growing at 7.7%. And that's a little bit off where it was," Pill said at a discussion about central banks at the Bristol Festival of Economics 2023. "But actually over the summer pay growth has remained very strong and we certainly wouldn't see pay growth of that rate as consistent with achieving the 2% inflation target on an ongoing basis." Pill also said a fall in inflation to the BoE's forecast of just under 5%" on Wednesday would still be "much too high" even if it halved inflation over the past year. Both the BoE and the consensus of economists polled by Reuters predict a sharp fall in inflation for October to 4.8% from 6.7% in September. PERSISTENCE "If you ask me where I think the sort of risk to the risks is, it's probably still on the fact that we may be seeing more momentum and more persistence than really is ideal to get us back to the 2% inflation target," Pill said. The former Goldman Sachs economist repeated comments he made last week that the BoE did not necessarily need to raise rates further to restrain inflation but it was prepared to do so if necessary. He also challenged the view that the impact of the BoE's rate hikes has been blunted by the fact that many mortgage-holders have yet to see their bills go up when they renew, saying people would adjust their spending before refinancing. Another BoE rate-setter Swati Dhingra, who has voted against rate rises or for smaller increases than her colleagues since she joined the Monetary Policy Committee last year, said she was "a bit reassured" that inflation was heading down. "Let's just hope that tomorrow looks good given that we are expecting a big drop. That would make me a feel a lot more confident," she said on the sidelines of the same conference. But Dhingra said it was too early to say whether rate cuts should be on the table. "A lot more homework will be needed" to make that kind of decision, she said. https://www.reuters.com/world/uk/boes-pill-says-pay-growth-is-slowing-still-too-high-2023-11-14/

2023-11-14 16:21

SAO PAULO, Nov 14 (Reuters) - JBS SA, the Brazil-based meat behemoth, is braced for challenging times in its home market as well as in the United States, where beef margins are pressured and pork margins have yet to normalize, management said. On Monday, JBS reported a drop in profit and earnings before interest, tax, depreciation and amortization, a measure of operating income known as EBITDA, at 5.40 billion reais, making shares fall by as much as 3.7% at one point in early trade in Sao Paulo. The company cited struggling U.S. beef margins, a recovering U.S. pork division and global chicken oversupplies as weighing on results. JP Morgan said it expected "a neutral reaction to the stock as the EBITDA miss was offset by better than expected free cash flow generation", noting JBS' EBITDA was 11% below JP Morgan's estimate and 2% below consensus. In early afternoon trading, JBS rose almost 1%. In a discussion with analysts of JBS' third quarter results on Tuesday, executives noted efforts to boost the operating performance of processed foods division Seara in Brazil, which made heavy investments to boost capacity at a time the world grapples with a global chicken glut and competitors make inroads in certain product categories. "Seara continues to recover from operating issues, although at a slower than anticipated pace," Itau BBA analysts said in a note to clients. Still, Seara's recently concluded capacity expansion to produce more value-added products should translate into stronger margins going forward, Itau said. JBS' plans to increase Seara's overall pork and chicken products production by 10% this year and 10% in the next are maintained, managers said. For the U.S. beef division, a shortage of cattle for slaughtering will remain a challenge in the fourth quarter and in 2024, Director Wesley Batista Filho said in the call. On a brighter note, the company is expected to continue to show strong cash generation in the fourth quarter following a drop grain prices and deferred livestock payments, CFO Guilherme Cavalcanti said. The company's plan to list shares in New York has been held back by a request from American Depositary Receipt holders to vote on the proposal, CEO Gilberto Tomazoni told analysts, repeating remarks from the previous day. The dual listing of shares in New York and São Paulo potentially thwarts short-term opportunities to tap capital markets to fund business expansion initiatives, he said. Tomazoni declined to give a timeline for the deal's conclusion as it is still being scrutinized by the Securities and Exchange Commission (SEC). https://www.reuters.com/business/jbs-facing-headwinds-us-ny-listing-plans-pushed-back-2023-11-14/

2023-11-14 15:41

SAO PAULO, Nov 14 (Reuters) - Brazilian airline Azul on Tuesday reduced its forecast for core earnings this year due to slower capacity growth and higher jet fuel price volatility but raised its view on 2024, lifting its Sao Paulo-traded shares. Azul, which also reported better-than-expected third quarter results in the day, cut its forecast for 2023 earnings before interest, taxes, depreciation and amortization (EBITDA) to about 5.2 billion reais ($1.06 billion) from some 5.5 billion. The company said in a securities filing the move was related to a fresh projection of available seats per kilometer (ASK) - a measure of capacity - expanding by 11% in 2023, down from an earlier forecast of 14%. Longer term outlook, however, was brighter from Brazil's largest carrier by number of flights and cities served, helping its shares jump more than 6% in the day - among the top gainers on Brazil's Bovespa stock index (.BVSP), which rose 2%. Azul said it now expects about 6.3 billion reais in 2024 EBITDA, up from a previous outlook of "more than 6 billion", due to continued demand strength and an accelerated fleet renewal process. "We remain encouraged by the industry environment," CEO John Rodgerson said in a statement, "with robust demand, strong tariff dynamics and disciplined capacity addition, especially during the upcoming high season." Goldman Sachs analysts led by Bruno Amorim, who have Azul as their top-pick name among Latin American airlines, said the fresh guidance was mostly in line with their expectations. "The company should maintain pricing power as the whole industry remains rational and focused on rebuilding profitability," they said. "That should allow cost pass-through to tariffs and open room for margin expansion." In the three months ended Sept. 30, Azul beat expectations with a record third-quarter EBITDA of 1.55 billion reais, up 67.7% from a year earlier and above the 1.34 billion forecast by analysts polled by LSEG. Net revenue, meanwhile, rose 12.3% to a record high 4.91 billion reais, slightly short of the 4.99 billion forecast by analysts. Ativa Investimentos analyst Ilan Arbetman said the quarterly figures were positive as Azul managed to pass on prices and counted on a drop in jet fuel costs, but noted he still takes the future with a grain of salt. "We remain 'neutral' because exogenous factors such as foreign exchange rates, Petrobras' jet fuel prices and the current domestic macroeconomic scenario may continue to pressure shares in the sector over the next few months." ($1 = 4.8973 reais) https://www.reuters.com/business/aerospace-defense/brazils-azul-lowers-2023-earnings-forecast-sees-better-2024-2023-11-14/

2023-11-14 15:22

SAO PAULO, Nov 14 (Reuters) - Brazilian food processor BRF SA (BRFS3.SA) is optimistic with the outlook for sales during the final quarter of 2023 based on the strength of its well-known brands Sadia and Perdigao, management said on Tuesday, referring the company's main market Brazil. Shares in the firm rose by more than 7% to 13.22 reais at one point in trading but later paired gains to a raise of about 2.8%, as investors see the management's ongoing turnaround plan reflected on results even as the pork and chicken processor posted a third-quarter loss on Monday. "Operations in Brazil are improving, with EBITDA margins rebounding by 220 bps to 12%," Banco Santander wrote in a note to clients. However, the bank called BRF's international division's results "uninspiring," with declining EBITDA margin driven by still low export prices amid a global chicken glut following recent outbreaks of avian flu. During a call to discuss third quarter results with analysts, BRF CEO Miguel Gularte said that prospects for chicken prices in exports market are already improving, with increases of up to $350 per metric ton depending on destination. While BRF continues to generate negative free cash flow, analysts in general saw progress based on the success of overall operating improvements, according to remarks during the call with management. BRF burned 21 million reais in the third quarter, improving from the cash burn of 700 million reais in the preceding quarter, according to the Santander note. https://www.reuters.com/business/brazils-brf-upbeat-q4-domestic-sales-chicken-exports-outlook-2023-11-14/