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UK Drax profits fall as power prices drop, but buybacks are extended
Drax Group announced a 11% decline in its first-half core profit due to lower UK wholesale electricity prices. The ongoing energy market fluctuation continued to affect the British power company. Drax, a company that has converted coal-fired plants to run on biofuels, supplies about 5% (or 5,000 MWh) of Britain's electric power. The adjusted profit, or EBITDA fell to 460 millions pounds ($611million) in the first six months, down from 515million pounds during the same period in last year. The group stated that it did not expect to change its adjusted EBITDA for the entire year, which is 899-910 millions pounds. After a dramatic rise following Russia's invasion, wholesale power prices have dropped in Britain over the last two years. Drax announced that it would extend its existing 300 million pound share-buyback programme for an additional 450 millions pounds over a period of three years. Early trading saw shares jump 6.2% to 720p. Earlier this year, the government extended subsidies - called contracts-for-difference (CfD) - for biomass units that were due to expire in 2027 to 2031. The group expects to conclude a deal with the UK Government later this year, for subsidy of its four biomass units. Drax's North Yorkshire power plant would be able, under this subsidy, to increase production when there's not enough electricity. This could help avoid the need for more gas, or to import power from Europe. Drax could reduce production when there's too much electricity in the UK grid. This would help to balance the system.
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BMW maintains its guidance despite profit decline and Trump's tariffs
BMW Germany maintained its full-year forecast on Thursday, despite U.S. Tariffs and a drop in quarterly earnings of a third. It argued that its large manufacturing footprint in the country gave it an advantage over its rivals. Volkswagen and Mercedes-Benz, on the other hand, have reduced their outlooks. The European automakers have yet to digest a new 15% auto tariff that was agreed upon between the European Union (EU) and President Donald Trump. Although this is lower than the existing rate of 27,5%, it still represents a significant obstacle for their export-focused business. BMW, which has its largest plant in the United States, and is Germany's leading auto exporter based on value, continues to expect that 2025 earnings will be comparable to the previous year, when it recorded just under 11 billion euro ($12.6 billion). This is despite the fact that it issued its initial forecast before Trump imposed tariffs for auto imports. The company has forecast that its automotive segment will have an EBIT margin of between 5.0-7.0%. In a press release, Walter Mertl, CFO of Mertl & Company said that "our footprint in the U.S. helps us limit the impact on tariffs." He added that "thanks to precise financial controls, based upon calculated forecasts, our year-end targets are on track." BMW said it also assumed that tariff negotiations are ongoing and that its forecast factored in some mitigation measures. The group anticipates that in 2025 the impact of tariffs on its automotive division's profit margin will be around 1,25 percentage points. The impact on the automotive segment was around 1.5 percentage points in the first half of this year. The second quarter saw a 32% drop in pretax profits to 2.6 billion euro, mainly due to currency effects, and a decrease in sales from China. The sales in China dropped by 15.5% in the first half. Analysts had expected a slightly lower quarterly profit result. The EBIT margin of its auto division was 5.4%. This is just a little below the 5.5% analysts had predicted in a poll conducted by the company, but still within its target range for 2025: 5.0% to 70%.
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Sources say that Asia is increasing its imports of US WTI oil as Middle East oil prices increase.
Trade sources say that Asia will increase imports of U.S. West Texas intermediate crude in the fourth-quarter after Middle East oil price increased and opened arbitrage window. They said that the price gap between light-sweet U.S.WTI oil and Middle East crude benchmarks Dubai & Murban has narrowed this month due to strong demand in Asia for high-sulfur oil. WTI's Arbitrage to Asia has been open for the last week for cargoes that arrive in early November. This was stated by June Goh, senior analyst at Sparta Commodities. Sources said that U.S. oil producer Occidental sold WTI crude to Japanese refiner Taiyo Oil. One source said that the cargo was sold for a premium of $3.50 per barrel over October Dubai prices, and would be delivered in October. A Singapore-based trader stated that WTI crude oil could be sold at a price 50-75 cents per barrel less than Murban oil of similar quality to refiners in north Asia, depending on the supplier. Two other traders claim that WTI is 30 cents less expensive than Murban light-sour grade. Sources confirming the benchmark said that Murban's supplies have also been tightened as Abu Dhabi National Oil Co has reduced its exports of its flagship grades by diverting oil to its own domestic refinery. Goh stated that "we anticipate more Asian buyers will secure WTI cargoes, especially as Murban looks expensive while taking the opportunity to diversify their portfolio against AG (Arabian Gulf crude)." She said that the threat of U.S. president Donald Trump to impose secondary duties on countries who buy Russian oil also supports Middle East crude price. Indian refiners are likely to look to purchase oil from Gulf in order to replace Russian supplies. Trump shortened the deadline by which Moscow must make progress in a peace agreement for the Ukraine war or face secondary tariffs of 100 percent on its oil customers within 10 to 12 business days. This reflects his increasing frustration over Russia's actions. China, India and Turkey import the most Russian crude.
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Portugal's EDP profits drop 7% due to no capital gains
Portugal's biggest power utility EDP reported on Thursday a 7% drop in net profit for the first half despite an increase in output. The reason given was lower returns from assets sales. It reported a net profit of 709 million euro ($812 millions) compared to a 775 million euro profit accumulated a year earlier. EDP reported that it had not booked any capital gains on the sale of solar and wind assets in the first six months. This was part of its strategy to dispose of stakes in mature plants in order to finance new ones. In the first half of last year, EDP logged 184 millions euros in these types of gains. It said that excluding capital gains, the recurring net profit grew by 27%. This was due to a robust increase in electricity production, "with a significant contribution from U.S. Operations, and solid performance of electricity network in Iberia, and Brazil". EDP Renovaveis' subsidiary, the fourth largest wind energy producer in the world, reported on Wednesday a 56% drop in net profit, to 93 millions euros. However, its recurring profit tripled from a year earlier, boosted by U.S. operations. EDP reported that total electricity production increased by 12%, to 34.6 Terawatt-hours. This was due to high rainfall in Iberia which filled reservoir volumes up to 87% capacity and natural gas power stations. After the power outage of April 28, Iberia, the production from natural-gas plants has been prioritised in order to strengthen the resilience and reliability of the electrical grid. The average spot price for electricity in the Iberian region rose from 39 euros to 62 euro per megawatt-hour during the first half of this year. The recurring EBITDA, which excludes capital gains, increased by 7%. EDP installed capacity in June was 32.3 GW. This is 3.1 GW more than a year earlier.
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Zelenskiy reports that Russian air strikes have killed six-year-old boy in Kyiv.
Ukraine officials reported that Russia launched drone and missile attacks on Kyiv early Thursday morning, killing six people, including a boy aged six and his mother. At least 82 other people were also injured. Volodymyr Zelenskiy, the president of Ukraine, said that Russia had launched over 300 drones as well as eight missiles against residential buildings in Kiev. "Today, the world saw Russia's response once again to our desire for peace in America and Europe. Zelenskiy stated on Telegram that peace is impossible without strength. Vitali Klitschko, Kyiv's mayor, said that nine children had been injured. This was the most number of injuries in one night since Russia began its full-scale attack almost three and half years ago. Yurii Kravchuk (62), was wrapped in a towel and bandaged around the head, standing next to a destroyed building. He was aware of the missile alert, but did not reach a shelter before it ended. "I started to wake up my wife, and then there was a blast... My child ended up in hospital." In the search for survivors, emergency crews cut through concrete blocks and put out fires. Kyiv was rocked by explosions for several hours, and fires lit the night sky. Officials said that schools and hospitals were some of the buildings which suffered damage in 27 different locations across the city. Air force officials reported 21 drone strikes and five direct missiles in 12 different locations. In recent months, Russia has increased airstrikes on Ukrainian cities and towns far from the front lines of the war, despite its denial that it is targeting civilians. Donald Trump, the U.S. president, said on Tuesday the United States will begin imposing tariffs on Russia in "10 days" if Moscow does not make progress towards ending the conflict. Yulia Shvyrydenko, Prime Minister of Ukraine, said that this was Putin's answer to Trump's deadlines. "The world needs to respond with a court and maximum pressure." Zelenskiy uploaded a video showing burning ruins and said that people were still trapped beneath the rubble from a partially-ruined residential structure. Ukrainian air defence units shot down 288 drones and 3 cruise missiles. (Additional reporting and editing by Dan Peleschuk)
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Outokumpu Finland beats earnings expectations in challenging environment
Outokumpu, a Finnish stainless steel manufacturer, reported Thursday a core income that was above the market expectation for the second quarter. It also said that it has increased its target of short-term savings to 60 million euro ($68.6 millions) by 2025. Outokumpu's consensus forecast had analysts expecting 69 million euros. In an earnings report, CEO Kati Ter Horst stated that "we continued to benefit from the strong market positions we have in Europe and the U.S." She did say, however, the quarter was marked with uncertainty and increased geopolitical tensions. This led to an increase in caution among customers. The tariffs imposed by President Donald Trump on U.S. imports will be a challenge for European steelmakers who are already facing a weak demand, high prices and fierce competition from Chinese imports. Trump's tariffs, which were first introduced at 25% and then increased to 50%, divert shipments intended for the U.S. Outokumpu stated that "Asian imports into Europe remain high in comparison to the low demand on the stainless steel market." It said that the company's deliveries of stainless steel rose to 483,000 tonnes during the second quarter but will decline between 5-15% due to seasonality and the market's weakness in the third. (1 euro = $0.8744) (Reporting and editing by Milla Nissi-Prussak, Gdansk)
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After a 16-month war, Russia claims to have captured the Ukrainian town of Chasiv Yar
After nearly 16 months, Russia announced on Thursday that it had taken the town of Chasiv Yar (in eastern Ukraine) after fighting. If confirmed, the advance would be a major victory for Moscow and allow them to push on toward key "fortress cities" in the Donetsk Region, such as Kostiantynivka and Sloviansk. On Thursday morning, the Ukrainian General Staff said that Russian forces attacked areas near Chasiv Yar. DeepState is a Ukrainian mapping site with open-source data that shows the frontlines. It showed Ukraine's troops controlling the western portion of the town. The battle for Chasiv Yar started in April of last year when Russian paratroopers reached the eastern edge. The Russian state media reported that Russian soldiers began calling their Ukrainian counterparts in the town, demanding they surrender or face being wiped out with aerial guided bombs. Before the war, this town had more than 12,000 residents and an economy centered around a brick factory and a factory producing reinforced concrete. It is located just west of Bakhmut. Russia took Bakhmut in 2023, after one of its bloodiest battles. Mark Trevelyan, Sharon Singleton and Anastasiia malenko reported from Moscow and Kyiv respectively. Mark Trevelyan wrote the article.
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Hungary to import US small modular reactor technology with Polish partner
Hungary has made a major step in importing technology for small modular reactors by partnering up with Poland's Synthos Green Energy. Synthos Green Energy holds the central European rights to GE Vernova Hitachi technology. Hunatom, a Hungarian firm that develops nuclear energy in Hungary, signed a letter with Synthos. Synthos is the project developer of BWRX 300 reactors for this region. Peter Szijjarto, the Hungarian Minister of Foreign Affairs, said that this agreement was about initiating technological, infrastructure, financial and legal preparations needed to bring American nuclear technology into Hungary. GE Vernova Hitachi, a joint venture of General Electric and the Japanese conglomerate Hitachi, is a successful business. The number of reactors that Hungary wanted was not immediately known. Csaba Lantos, the Energy Minister of Hungary, said that by 2023 at least one modular small reactor will be needed. After the signing ceremony, Robert Palladino said, "The United States of America and Hungary are deepening their relationship in all areas: in defense and commerce, space and energy." Hungary has four VVER reactors, originally brought on line between 1982 and 1987. In 2014, Hungary and the Russian nuclear company Rosatom signed a deal worth 12,5 billion euros for two new 1.2 gigawatts reactors to be built at Paks. These reactors will be added on top of four existing reactors. The project, known as Paks 2, is still a long way behind schedule. The project was given to Rosatom by the government without any tendering process. This is seen as a sign that NATO and European Union members Hungary and Russia are still close, despite their war in Ukraine. (Reporting and editing by Anita Komuves)
Italy creates AI assistant that helps Italians assess landslide risk
A public research organization announced on Wednesday that climate change will likely lead to an increase in landslides. They also announced a new AI assistant which can help assess the risk.
The environmental research and protection organization ISPRA stated that climate change increases the frequency of stronger thunderstorms, amplifies risks of landslides, and floods, and spreads them to areas which were previously less exposed.
It said that the share of land at risk of serious landslides rose from 8.7% to 9.5% in 2021. About 2.2% or 1.3 million people live in this area.
The institute stated that Italy remains one of the European countries with the highest risk of landslides. It cited recent natural disasters, such as the landslide in 2022 on the island Ischia near Naples and the flooding in Emilia-Romagna 2023.
The institute stated that the new AI assistant will help users navigate through the IdroGEO platform, which is a public platform with maps and data updates on instabilities, and provide information and answer questions.
(source: Reuters)