2023-10-31 00:35

SANTIAGO, Oct 30 (Reuters) - LATAM Airlines (LTM.SN) on Monday posted a third-quarter net profit of $232 million, boosted by higher passenger revenue and a turnaround from a loss in the same period last year when the carrier was still in bankruptcy proceedings. The profit, which topped an analyst consensus, reverses a year-earlier net loss of $296 million, with passenger revenue jumping 26%. Available seat kilometers (ASK), a measure of an airline's seats multiplied by kilometers flown, rose 15%, with recovery seen especially in international flights, LATAM said. The passenger boost plus lower jet fuel prices offset a 20% drop in cargo revenue to bring the carrier's adjusted operational margin to 13.4%. Third-quarter revenue, also beating consensus, rose 18% to a record $3.06 billion. The results were "better than expected," analysts at J.P. Morgan wrote in a client note, adding the news would likely be welcomed by the market. The airline late last year exited pandemic-related bankruptcy with an $8 billion reorganization plan. The airline's adjusted EBITDAR - earnings before interest, taxes, depreciation, amortization and restructuring or rent costs - increased in the quarter by 82% year-on-year to $726 million. Last quarter, LATAM raised its forecasts for 2023. The airline now anticipates adjusted EBITDAR of $2.35 billion to $2.50 billion, versus the previous estimate of $2 billion to $2.2 billion. "We now think we're going to be in the upper end of that range," said Chief Financial Officer Ramiro Alfonsin in a call with journalists on Monday. The carrier slightly raised its projected fleet size to 341 aircraft by 2025. LATAM increased its revenue projection in August to $11.3 billion to $11.6 billion, from $11 billion to $11.5 billion. Alfonsin also said LATAM expected to be in "the high end" of guidance for other metrics beyond EBITDAR, without specifying. "We believe there is room for the company to surpass (guidance) following strong third-quarter figures," J.P. Morgan analysts said. The executive also said the effect of engine inspections required after RTX-controlled (RTX.N) engine maker Pratt & Whitney discovered a rare powder metal defect would be "marginal" due to the number of aircraft that may be affected. https://www.reuters.com/business/aerospace-defense/chiles-latam-airlines-swings-profit-third-quarter-2023-10-30/

2023-10-30 23:28

TWE expands further into US markets To raise $525 mln of equity for purchase Faces uncertainty over trade with China Deal to be EPS accretive in FY25 Oct 31 (Reuters) - Australia's Treasury Wine Estates (TWE.AX), the world's biggest standalone winemaker, agreed to a $900 million buyout of California's DAOU Vineyards, locking in a strategy of selling higher-margin luxury products amid uncertainty about trade with China. Treasury said it planned to fund the acquisition in part through a A$825 million ($525.53 million) equity raising at A$10.80 per share, a 10.7% discount to its closing price on Monday. The wine producer has been resetting its strategy in an attempt to diversify outside of China, which used to contribute a third of its profits, after Beijing imposed tariffs on Australian wine in 2021 when Canberra called for an inquiry into the origins of COVID-19. The Australian government said this month Beijing had agreed to an expedited review of the tariffs, expected to take up to five months, in a move the maker of Penfolds Grange said could help it rebuild its China business over time. DAOU fills a key Treasury Americas portfolio gap at the $20 to $40 per bottle range and strengthens the existing luxury portfolio above $40 per bottle, the Australian company said. The winemaker's combined premium and luxury portfolios delivered double-digit gross profit growth in fiscal 2023, according to its annual report. "On face value the acquisition rationale is solid, and financial metrics look attractive....the concern investors will have is that TWE Americas has been underperforming in recent times with the Frank Family Vineyard acquisition driving the earnings," E&P Capital retail analyst Phillip Kimber said in a note. The deal is expected to near full completion by the end of 2023 and to contribute earnings before interest and taxes between $23 million and $25 million in the second half of 2024. Including cost synergies of more than $20 million, the acquisition is expected to be mid to high-single-digit earnings per share (EPS) accretive in fiscal 2025, the first year of Treasury owning DAOU. Treasury said it would also issue A$157 million of new shares to the existing owners of DAOU. ($1 = 1.5699 Australian dollars) https://www.reuters.com/markets/deals/australias-treasury-wine-estates-buy-daou-vineyards-900-mln-2023-10-30/

2023-10-30 23:15

WASHINGTON, Oct 30 (Reuters) - The Republican-led U.S. House of Representatives on Wednesday plans to vote on legislation that would bar the Biden administration from awarding funds to California's High-Speed Rail project. The White House on Monday said it opposed the bill that would also dramatically cut funds for U.S. passenger railroad Amtrak and mass transit programs. The California high-speed rail program aims to ultimately move travelers from San Francisco to the Los Angeles basin at speeds above 200 miles per hour in under three hours. California recently won $202 million in federal funds for grade separation projects and is seeking$8 billion in federal grants over five years. California voters approved an initial $10 billion bond for the project in 2008. The initial segment is now estimated to cost up to $35 billion and launch service as early as 2030. The full San Francisco to Los Angeles project is estimated to cost between $88 billion and $128 billion. California Governor Gavin Newsom said in an Oct. 13 letter to President Joe Biden that combined with $754 million in state funding, the $3 billion federal grant would allow the state to complete an initial 119-mile segment, buy six electric high-speed trains and construct a new high-speed rail station in Fresno. In June 2021, the Biden administration restored a $929 million grant for the California high-speed rail project. In 2019, then-President Donald Trump pulled funding for the project, hobbled by delays and rising costs, calling it a "disaster." Congress approved $66 billion for rail as part of the 2021 $1 trillion infrastructure bill, with Amtrak receiving $22 billion and $36 billion allocated for competitive grants. Amtrak's annual federal funding would be cut by 64% under the Republican proposal. The California High-Speed Rail Authority declined to comment on the legislation. https://www.reuters.com/world/us/us-house-republicans-seek-block-california-high-speed-rail-funds-2023-10-30/

2023-10-30 23:03

Oct 31 (Reuters) - An Australian union alliance's members voted in support to endorse deals on pay and conditions at Chevron's (CVX.N) two liquefied natural gas (LNG) facilities in Australia, the union said on Tuesday. Earlier this month, the union called off strikes originally planned at the U.S. energy major's Gorgon and Wheatstone projects in Western Australia, which supply around 6% of the world's LNG. The breakthrough followed days of talks mediated by Australia's industrial arbitrator, the Fair Work Commission, to try and revive an in-principle deal reached in September that ended weeks of strikes. https://www.reuters.com/business/energy/australia-lng-workers-vote-support-chevron-deal-2023-10-30/

2023-10-30 22:52

Oct 31 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Asia's economic calendar is jammed with top-tier releases on Tuesday, from Chinese purchasing managers index data to third quarter GDP figures from Hong Kong and Taiwan, but one stands above all others - the Bank of Japan's policy meeting. Will the BOJ spook markets on Halloween and the final trading day of the month by effectively tightening monetary policy further with another tweak to its 'yield curve control' policy? It is a huge week for global markets and policy - the BOJ's decision on Tuesday is the first of three major central bank pronouncements, with the U.S. Federal Reserve coming on Wednesday and the Bank of England on Thursday. Speculation that the BOJ will act ramped up on Monday after Nikkei, citing sources close to the matter, reported that policymakers may further tweak YCC to allow the 10-year Japanese Government Bond yield to rise above 1%. The yen rallied strongly for a second straight session, the 10-year yield rose again to a fresh decade-high nudging 0.89%, and the benchmark Nikkei 225 stock index gave back all of Friday's gains and slid 1%. It is shaping up to be a year of two halves for Japanese stocks as the prospect of the BOJ abandoning its super-loose monetary policy becomes more likely. The Nikkei is down 3.6% this month, on track for its biggest monthly loss since December, and is down 8% so far in the second half of this year. But it is still up 17% year-to-date thanks to a stunning 27% rally in the January-June period that saw it scale a 33-year high close to 34,000 points, as many investors bet that Japan Inc was back after years - decades - in the doldrums. Negative interest rates, the BOJ accumulating 45% of all outstanding Japanese Government Bonds, and a 30% slide in the yen's value against the dollar since early 2021 made Japanese stocks extremely attractive. By real effective exchange rate measures, the yen is its weakest in over 50 years, luring foreign buyers in to snap up assets on the relative cheap. The question now is, how much of that is firmly in the rear-view mirror? And how far and how powerfully might the elastic snap back if a paradigm shift is underway and domestic borrowing costs keep on rising? Inflation in Japan has finally taken off, and for the first time in decades, appears to be sticking well above 2%. Also on Tuesday, China's PMI figures are expected to show that manufacturing activity grew slightly again in October, at the same pace as the previous month, according to a Reuters poll forecast. After a deeply disappointing first half of the year, Chinese economic data have started to come in above expectations in recent months. Will this trend continue into the start of the fourth quarter? Here are key developments that could provide more direction to markets on Tuesday: - Bank of Japan policy decision - China PMIs (October) - Japan unemployment, industrial production, retail sales (September) https://www.reuters.com/markets/global-markets-view-asia-graphics-pix-2023-10-30/

2023-10-30 21:13

Major U.S. stock indexes end more than 1% higher Oil prices fall as investors monitor Mideast developments Fed, BoE and BOJ all hold meetings this week NEW YORK, Oct 30 (Reuters) - Global stock indexes advanced on Monday, with U.S. stocks rallying more than 1% after recent sharp declines, while the yen rose to a two-week high against the dollar after a report that the Bank of Japan is considering tweaking its yield curve control policy. Oil prices settled more than 3% lower, partly as fears eased about the Israel-Hamas war disrupting supply from the region. The Nikkei report, that the BOJ is considering adjusting its yield curve control policy to allow the 10-year Japanese government bond yield to rise above 1%, pushed the yen to 148.81 per dollar, its strongest level since Oct. 17. The greenback was last down 0.4% at 149.05 yen . The BOJ kicked off its two-day monetary policy meeting Monday. The recent surge in global interest rates has heightened pressure on the BOJ to change its bond yield control policy. The U.S. Federal Reserve and Bank of England are also meeting this week. The U.S. monthly jobs report is due on Friday. "If the BOJ does not do anything tomorrow, which I think that's what economists expect, and just wait until December, I think the dollar jumps right back versus the yen," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. The dollar index fell 0.469%, with the euro up 0.51% at $1.0618. Stock investors also are closely monitoring quarterly earnings this week, with several big U.S. companies including Caterpillar (CAT.N) and Apple (AAPL.O) due to report this week. The Dow Jones Industrial Average (.DJI) rose 511.37 points, or 1.58%, to 32,928.96, the S&P 500 (.SPX) gained 49.45 points, or 1.20%, to 4,166.82 and the Nasdaq Composite (.IXIC) added 146.47 points, or 1.16%, to 12,789.48. Wall Street stocks posted losses for last week as economic data seemed to support the "higher for longer" interest rate scenario. The pan-European STOXX 600 index (.STOXX) rose 0.36% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.86%. In U.S. Treasuries, yields pared gains after the Treasury Department said it expects to borrow $76 billion less this quarter than anticipated in the third quarter on expectations of higher revenue receipts. The Treasury said it expects to borrow $776 billion in the fourth quarter, down from $852 billion the prior quarters, assuming an end of December cash balance of $750 billion, the department said in a statement. Yields on 10-year Treasury notes were last up 4.1 basis points at 4.886%, after reaching 4.922% earlier in the day. Last week the benchmark note hit a 16-year high of 5.021%. In energy, U.S. crude fell $3.23 to settle at $82.31 a barrel, while Brent dropped $3.03 to $87.45. Spot gold dropped 0.4% to $1,997.86 an ounce. https://www.reuters.com/markets/global-markets-wrapup-1-pix-2023-10-30/