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Berkshire increases investments in Japanese trading companies
Warren Buffett announced on Saturday that Berkshire Hathaway, the conglomerate he leads, will likely increase Berkshire Hathaway's ownership of its five Japanese trading companies. In his letter to Berkshire shareholders each year, the billionaire investor stated that Itochu Marubeni Mitsubishi Mitsui Sumitomo and Sumitomo had agreed to "moderately" relax limits which limited Berkshire's stakes to below 10%. Berkshire’s investment in these companies will total $23.5 billion by the year 2024. Buffett wrote that Berkshire's holdings in all five companies will increase over time. Buffett, who is 94 years old, said that he and Berkshire Vice-Chairman Greg Abel, the Berkshire CEO he has designated as his successor, invest for a "very long-term." Buffett wrote: "I expect Greg and his successors to hold this Japanese position for decades, and Berkshire will work with the five companies in other productive ways." Buffett said that he and his partner liked their capital allocation, their managements, and their attitude towards their investors. Japanese trading houses, also known as "sogo-shosha," trade in many different materials, food and products. They often act as intermediaries and provide logistical assistance. The real economy is also a major concern for them, including commodities, shipping, and steel. Berkshire started investing in trading houses in 2019 due to their financial strength compared with their low stock price, and revealed their 5% ownership stakes at Buffett's 90th Birthday in August 2020. Buffett avoids businesses that he doesn't understand. He told Nikkei that in 2023, the trading houses were "really similar to Berkshire," a conglomerate with headquarters in Omaha, Nebraska which he led since 1965. Buffett stated in his shareholder letter that Berkshire has spent $13.8 billion in its current holdings, and it expects to receive $812 million in dividend income by 2025. "This was a great investment, when other people may have seen them as value traps," Cathy Seifert said. CFRA Research analyst Cathy Seifert rates Berkshire a 'hold. She said Buffett’s comments showed Berkshire had a positive relationship with trading houses. Berkshire also issued fixed rate, yen denominated bonds. Buffett, however, said that the company seeks to be "currency-neutral" and does not have a view on currency changes in the future. The conglomerate on Saturday reported $1.15 billion of foreign currency gains after taxes in 2024 from non-dollar-denominated senior debt. Reporting by Jonathan Stempel in New York, writing by Carolina Mandl in New York, editing by Rod Nickel
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Draft shows EU will reduce sustainability rules for businesses
A draft document obtained by revealed that the European Commission intends to reduce the number of businesses subject to EU sustainability reporting obligations as part of its efforts to reduce red tape. Brussels will publish next week a "omnibus proposal" to simplify green regulations for businesses. The aim is to make local industries competitive and to respond to U.S. president Donald Trump's pledge to abolish regulations. Spain and Germany, among others, have called for the European Union to weaken the rules on green reporting. The Commission's partial draft proposals for the future, seen on Saturday by the media, revealed that it is planning to make changes to the EU Corporate Sustainability Reporting Directive, which requires companies disclose information about their social and environmental sustainability. According to the proposed rules, which may still be changed before publication, only those companies with over 1,000 employees and net revenues exceeding 450 millions euros ($471million) will be required to comply. The rules currently apply to companies with over 250 employees and 40 million euros in turnover. According to the draft, the EU will also abandon its plans to adopt industry-specific reporting standards before next June. The document also detailed the plans to delay EU's Due Diligence Law - CSDDD, which aims at ensuring companies find and fix environmental and human rights issues in their supply chain by imposing due-diligence requirements on large companies. The draft proposal would only require companies to conduct in-depth evaluations of their direct business partners and subsidiaries and leave out all other subcontractors or suppliers in their supply chain.
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Berkshire increases investments in Japanese trading companies
Warren Buffett announced on Saturday that Berkshire Hathaway, the conglomerate he founded, will likely increase Berkshire's ownership of five Japanese trading companies it owns. In his annual Berkshire shareholder letter, the billionaire investor stated that Itochu Marubeni Mitsubishi Mitsui Sumitomo and Mitsui agreed to "moderately loosen" limits on Berkshire's equity stakes. Berkshire’s investment in these companies will total $23.5 billion by the year 2024. Buffett wrote that Berkshire's holdings in all five companies will increase over time. Buffett, who is 94 years old, said that he and Berkshire Vice-Chairman Greg Abel, the Berkshire CEO he has designated as his successor, invest for a "very long-term." Buffett wrote: "I expect Greg and his successors to hold this Japanese position for decades, and Berkshire will work with the five companies in other productive ways." Japanese trading houses, also known as "sogo-shosha," trade in many different materials, food and products. They often act as intermediaries and provide logistical assistance. The real economy is also heavily involved, including commodities, shipping and the steel industry. Berkshire started investing in trading houses in 2019 due to their financial strength compared with their low stock price, and revealed their 5% ownership stakes at Buffett's 90th Birthday in August 2020. Buffett avoids businesses that he doesn't understand. In 2023, Buffett told Nikkei that trading houses were "really similar" to Berkshire, the Omaha-based conglomerate which he led since 1965. Buffett stated in his shareholder letter that Berkshire has spent $13.8 billion in its current holdings, and it expects to receive $812 million in dividend income by 2025. "This was a great investment, when others might have seen them as value traps," Cathy Seifert said. CFRA Research analyst Cathy Seifert rates Berkshire a 'hold. She said Buffett’s comments showed Berkshire had a positive relationship with trading houses. Berkshire also issued fixed rate, yen denominated bonds. Buffett, however, said that the company seeks to be "currency-neutral" and does not have a view on currency changes in the future. The conglomerate reported on Saturday that it will have $1.15 billion in foreign currency gains, after taxes, by 2024. (Reporting and writing by Jonathan Stempel in New York, Carolina Mandl in New York, editing by Rod Nickel).
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Warren Buffett warns Washington after Berkshire announces record profits and cash
Berkshire Hathaway reported record profits on Saturday, even as it increased its cash stake from $334.2 billion to $334.2 trillion. Warren Buffett warned Washington in his annual shareholder letter that they should spend their money "wisely," and to take care of people who "get the short straws in life." In the letter, Buffett, who is 94 years old and arguably the most famous investor in the world, acknowledged his age, telling shareholders that he uses a cane now and will spend less of his time answering their questions at Berkshire’s annual meeting, which takes place in May. Abel's ability to manage capital has been "vividly demonstrated" by the 62-year old Abel. Berkshire reported its annual report along with Buffett's note, which showed a record operating profit of $47.44 Billion, up 27%. Berkshire Hathaway's net income was $89 billion. This includes gains from Berkshire shares such as Apple, American Express and American Express. Apple included. Berkshire’s cash stake was a reflection of high business valuations, and nine consecutive quarters in which the company sold more shares than it purchased. Buffett wrote: "Often nothing seems compelling, but very rarely do we find ourselves in the midst of opportunities." AMERICAN MIRACLE Buffett is celebrating his 60th year at Berkshire. He transformed the company from a failing fabric company to a conglomerate of dozens of companies in industries such as insurance, railroads, energy, retail, and industrial. Buffett added that Berkshire was "not done" and will continue to favor owning stocks, especially U.S. ones, over cash. He sent a warning message to Washington and lamented that capitalism has "faults and abuses, which are in some respects worse than ever," and "scoundrels" and "promoters" have been at it full force. He urged legislators to preserve the stability of the U.S. Dollar, saying that "paper money could see its value disappear if fiscal foolishness prevails" and that in the United States' history the country has "come very close to the edge." Buffett said that the long-term success and growth of Berkshire, as well as the American economy (which he called "the American miracle") depended upon the ability of people to participate. He said Uncle Sam could encourage or discourage that. Buffett, in a letter to the government, wrote: "Take care for the many, who without their fault, are the ones that get the short straws of life." "They deserve more. Never forget that you are needed to maintain a stable exchange rate, and this requires both your wisdom and vigilance. Cathy Seifert is an analyst with CFRA Research, who rates Berkshire as "hold." She said: "His way of addressing politics and the impact of the macroeconomic climate was to talk about America's business being messy." He's warning Washington, "Be careful where you step." Fewer buying opportunities Buffett stated that Berkshire had not purchased an entire company in 2016. However, he said the company is likely to increase their combined $23.5 billion investments into five Japanese trading companies: Itochu Marubeni Mitsubishi Mitsui Sumitomo. Other stocks are more expensive, however. The Standard & Poor’s 500 hit a new record on Wednesday while the Nasdaq is only 3% off its peak of December 16. Berkshire shares are also too small to dominate the indexes like they used to do decades ago. In the past year, the company's share price rose 15% while the S&P 500 grew 18%. Data show that over the past decade, Berkshire stock has increased 225%. The index, however, rose 241%, including dividends, and 185% without dividends. Bill Smead of Smead Capital Management, Phoenix's chief investment office said: "They will be able to buy a lot but Berkshire won't ever be that large compounder with double-digits." "Berkshire is a great way to own major companies and avoid trouble. Buffett, Abel, and Berkshire Vice-Chairman Ajit Jain will spend less of their time on stage at the annual meeting. Buffett told Fortune magazine in the last month he still had fun and was able to do some things fairly well while other activities were "eliminated" or "greatly minimized". The traditional film created by Buffett’s daughter Susie will not be shown at the meeting. Buffett, when asked about his age, said that he speaks regularly with his 91 year-old sister Bertie on Sundays, using a traditional phone. He said, "We discuss the relative merits and joys of canes as well as other exciting topics such the joys that come with old age." In my case, its utility is to prevent me from falling on my face.
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The oil ministry has announced that the northeast of Syria will begin supplying oil directly to Damascus.
Ahmed Suleiman, spokesman for the Syrian oil ministry, said on Saturday that Kurdish-led officials in northeast Syria are now supplying oil to Damascus from the local fields they control. This was the first time that the oil rich northeast of Syria was acknowledged as a source of oil for the islamist-run government, which was installed in December after the former president Bashar al Assad was overthrown by rebels. Suleiman claimed that the oil came from Hasakeh, Deir el-Zor provinces and the deliveries were made based on a revised version of a prior agreement between the Assad Government and Kurdish Authorities. He claimed that the new Syrian leaders had changed the articles of the deal which "served people connected to the Assad regime's interests". Sources from the semi-autonomous administration in northeast Syria said that the deal involved the shipment of 5,000 barrels a daily of crude oil from the Rmeilan Field in Hasakeh, and other fields in the Deir el-Zor Province to a refinery located in Homs. In 2010, Syria exported 380,000 barrels per day of oil (bpd), a year prior to the protests against Assad’s rule that spiraled into a 14-year conflict that destroyed the country’s infrastructure and economy, including its oil. The oilfields have changed hands several times. The Kurdish-led Syrian Democratic Forces eventually captured the northeastern fields. However, U.S. sanctions and European sanctions made legitimate imports and exports difficult. In January, the United States granted a six-month exemption from sanctions to allow certain energy transactions. The European Union will soon suspend sanctions related to transport, energy and reconstruction. Several trade sources said that Syria wants to import oil through local intermediaries in the meantime, after its first post Assad import tenders attracted little interest due to sanctions and financial risk. Internal oil trade also plays a major role in the talks between the Northeast region and the new Damascus authorities, who want to centralise control over all of Syria. According to sources, the SDF will likely have to give up control of oil revenue as part of any settlement. Mazloum Abdi, the SDF commander, said that he was willing to give up control of oil revenues to the new government if the money was shared fairly among all provinces. Reporting by Maya Gebeily from Beirut, and Timour Azhari from Damascus. Editing by Bernadette and Emelia Sithole Matarise and Kirsten Donovan.
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Iraq's Oil Ministry says that procedures for oil exports via Turkish pipeline are complete
In a statement issued on Saturday, the Iraqi oil ministry stated that all procedures were completed for the resumed exports via the Iraq-Turkey pipe. Iraq's Oil Minister said Monday that oil exports will resume from the semi-autonomous Kurdistan Region next week. This resolves a dispute of nearly two years that has disrupted oil flows, as relations between Baghdad Erbil have improved. Sources have confirmed that the Trump administration has put pressure on Iraqi officials to allow Kurdish exports of oil to resume or else face sanctions along with Iran. Later, an Iraqi official denied the pressure and threat of sanctions. Following the statements made by the oil minister earlier in the week, the federal government of Iraq (FGI) and the Kurdistan Regional Government(KRG) held technical discussions to work out the details needed for the resumed exports. This included a payment system that was acceptable to the oil companies. The Iraqi Oil Minister's announcement follows the Iraqi Parliament's approval of a budget amendment on February 2, which set a rate for oil transportation and production costs to be $16 per barrel in Kurdistan. The KRG is also required to transfer its oil production to the State Oil Marketing Organization, which is run by the government. In a statement issued on Saturday, the oil ministry asked that KRG begin delivering crude oil to SOMO to allow exports to resume. (Reporting and writing by Ahmed Rasheed, Ahmed Tolba, and Maha El Dahan. Editing by Sharon Singleton.)
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France’s EDF Reports $944M Impairment on US Offshore Wind Project
State-owned French power giant EDF is taking a 900 million euro ($944.4 million) impairment charge on the Atlantic Shores offshore wind farm project in the United States after partner Shell pulled out of the joint venture."We have every intention of pursuing the interests of the (joint venture) company to the end, but in order to reflect the new American political landscape ..., the board of directors has decided at this stage to depreciate the developments that we have carried out offshore at Atlantic Shore," EDF CEO Luc Remont told reporters.($1 = 0.9530 euros)(Reuters - Reporting by Forrest Crellin, Editing by David Goodman)
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Cuba opens the first of 92 new solar parks to combat energy crisis
Cuban President Miguel Diaz-Canel opened the first of 92 Solar Parks on Friday, as part of an initiative backed by China to reduce the number of blackouts that can last for hours in the Caribbean Island nation. The park in Havana is one of 55 that are expected to be online by this year. It will generate 1,200 megawatts. Last year, the outdated power grid of this Communist-run nation collapsed multiple times. A severe fuel shortage made it impossible for smaller clusters to operate diesel-powered generators which typically backup the system. Blackouts that lasted for years have weakened the economy, and prompted scattered protests by residents who are tired of the multi-faceted crisis which includes a scarcity of basic goods such as food and medicine. The government is heavily promoting the parks as a partial answer to people's problems, which they blame primarily on U.S. sanction. Diaz-Canel tweeted on Friday that "the recovery of the grid is a top priority, and this is its safest route." Cuba's maximum demand is around 3,500MW. However, it fails to meet 1,500MW of this, leading to power outages. Cuba and China agreed to boost solar energy in Cuba's grid in April, but neither government provided details on the financing. Hua Xin attended the Havana solar park's inauguration. Foreign journalists were not allowed to attend the event. Presently, less than 5% (or a little more) of Cuba's energy is derived from alternative sources. Cuba's 2030 goal is 24%. Marc Frank (reporting; Paul Simao, editing)
INSIGHT-Losing hope of rescue, some European solar firms head to United States
European governments due to relocate to support their solar power makers today will be too late to stop solar panel maker Meyer Hamburger leaving a German factory to send out production to the United States.
The plant in Freiberg in eastern Germany closed in mid-March with the loss of 500 jobs, as the Swiss-listed company joined a. growing list of European renewable resource production. factories closing down or moving. In the previous year, at least 10. have stated they remain in financial problems.
On a recent check out to the site, giant white robotic arms hung. dormant over empty wooden pallets as employees prepared the last. assembly line for shutdown. Talks with the German federal. government to attempt to secure a future for the factory ended. without success in late March, a business spokesperson told. .
Germany's economy ministry stated it knew the extremely. serious circumstance of German companies and has actually been analyzing. funding choices with the market for over a year. It agreed to. offer Meyer Hamburger an export credit guarantee for equipment. produced in Germany to be utilized at the U.S. factories, which will. assist a website nearby but won't save the Freiberg one.
The closure, which in one sweep minimized European photovoltaic panel. production by 10%, comes regardless of a boom in wind and solar power. in Europe. Additions to renewable energy capacity, consisting of. photovoltaic panels, are running at record rate, according to information from. the International Energy Firm.
But Europe-based producers that supply those panels are. being squashed by competition from China and the U.S., whose. governments provide more assistance to their manufacturers.
The circumstance postures a predicament for European federal governments. keen to combat environment modification: Either offer more assistance to. ensure local production can stay competitive, or enable the. unfettered circulation of imports to maintain the rate of setups. A conference in Brussels between European energy ministers on. Monday will make a gesture of support for the struggling. market.
China is broadening solar output and now accounts for 80% of. the world's solar manufacturing capability. The cost of producing. panels there is around 12 cents per watt of energy produced,. compared with 22 cents in Europe, according to research study company. Wood Mackenzie.
U.S. aids revealed as part of the 2022 Inflation. Decrease Act enable some renewable energy producers and. job designers to claim tax credits, which are bring in. businesses from within the European Union and beyond.
Meyer Burger says its plans include a photovoltaic panel factory in. Arizona and a solar battery factory in Colorado.
We made a vibrant relocation in the lack of any market policy. support in Europe and shifted a solar battery growth project. from Germany to the U.S., its president Gunter Erfurt. told in an interview.
Likewise, battery business Freyr which runs mostly in. Norway, has actually quit working at a half-finished plant near the. Arctic Circle and is focusing on prepare for a plant in the U.S. state of Georgia after Washington announced the policy.
Freyr stated in February it had changed its registration to. the U.S. from Luxembourg.
We did invest quite a bit of time trying to truly make sure. that we weren't devoting an error, stated Birger Steen, chief. executive of Freyr: The company initially looked for assistance from. Norwegian or European federal governments.
We got to the point where we concluded that type of. policy level response was not forthcoming.
Asked to comment, Norway's ministry of trade and market. said that it had introduced an industrial policy framework. targeting energy shift technologies including solar and. batteries, however did not directly attend to questions about. additional financing for the companies in this story.
CHARTER
At Monday's meeting, the European Commission will launch a. voluntary charter for governments and business to sign in. support of solar factory. Industry association. Solar energy Europe will coordinate business signatories. However the. charter, which says that purchasers of solar panels need to include. some domestic production in what they purchase, is not enforceable,. Solar energy Europe said.
Michael Bloss, EU parliament member for Greens, launched a. petition previously this month requiring action at a European. level to rescue panel makers.
Bloss states he is pushing for the European Commission to set. up a 200 million euro ($ 213 million) fund to buy up unused. European-made solar panels, however Europe has hesitated to. pursue that. The European Commission declined to comment.
We are-- in headings and Sunday speeches-- very much in. favour of producing our own solar industry, however then in action,. nothing occurs, Bloss informed .
The charter will be more like a political declaration. signed by member states, solar companies and the Commission,. it's more long term, it has no instant impact.
In February, European policymakers adopted the Net-Zero. Market Act, a set of procedures consisting of a target to produce. 40% of the region's tidy tech needs by 2030.
The previous month, the EU also authorized nearly $1 billion. of German state help for a Swedish battery. manufacturer, Northvolt, to help it establish a production plant in. Germany after Northvolt threatened to take its company to the. United States. It was the first time the bloc used an. exceptional measure allowing member nations to step in with. help when there's a danger of financial investment leaving Europe.
But aid for ongoing operations has not been upcoming,. amid political difference over just how much public funds ought to go. to having a hard time businesses.
Choices about supporting markets or firms like Meyer. Burger are down to member states, a spokesperson for the. European Commission told . Germany's economy and climate. ministry thinks help to keep an existing business like Meyer. Hamburger would not be legal if there is a lack of market. prospects from the business's perspective, a spokesperson told. .
Prospective clients-- renewable resource installers that. depend heavily on inexpensive Chinese imports-- have likewise pressed back. against any brand-new subsidies for regional panels, arguing such relocations. could harm them by triggering customers to postpone orders as they. await the subsidies to start.
INTERTWINED
More than a year's worth of low-price imported panels sit in. European warehouses waiting for setup, according to. consultancy Rystad Energy and photovoltaic panel makers. could. not individually validate that quote.
That backlog could grow as Chinese capability continues to. broaden, Rystad states: If all the plans Chinese companies have. announced proceed, China's industry will have the ability to make twice. as many panels as are anticipated to be set up worldwide in. 2024, said Marius Mordal Bakke, senior analyst at Rystad.
Dresden-based Solarwatt is carrying 6 to 9 months of. stocks, up from around 6 weeks, its chief executive Detlef. Neuhaus told in March.
The company laid off around 10% of its employees last year. and says its regional panel production is running at approximately. one-third of capability.
This industry is so crucial for the future, we can not. permit that we are losing all our skills, stated Neuhaus.
Analysts say it's unclear what support could actually. assistance, since companies like Meyer Burger produce a fraction of the. volumes made by those in China, or prepared in the U.S.
They are tiny, so they will always have problem with volume,. not just to take on Chinese producers but also with U.S. manufacturers, said Eugen Perger, senior analyst at Research study. Partners AG.
And regional clean innovation markets are so worldwide. intertwined it's tough for European manufacturers to envision a. totally independent supply chain.
Norway-based NorSun, which produces solar wafers-- thin. silicon movie utilized in panels-- stated Chinese devices is vital. to both its plant in Norway and a proposed facility in the U.S . The company has halted production at the Norway plant while it. chooses whether to upgrade it.
Most of the devices for either project would need to come. from China. There's essentially no other option, said Carsten. Rohr, primary commercial officer at NorSun.
DEJA VU
Freiberg has been here before. Considering that the 1990s, companies. setting up operations in the area have actually taken advantage of federal. funding programs to restore east Germany and help it close the. gap with western Germany's success.
New markets sprang up, including in solar and. semiconductors. Freiberg took a big hit in the 2010s after. China's solar market increased production and undercut. competitors.
In 2020, the German federal government eliminated a cap on aids. for solar power installations which helped lift demand. In 2021,. the EU's Green Offer signified political support for future. need, and Russia's full intrusion of Ukraine likewise helped solar. release.
Meyer Hamburger, which is headquartered in Gwatt, Switzerland,. only set up production in Freiberg in 2021 as the market. began coming back to life. It refurbished an insolvent solar. business's plant that had stood unused for nearly three years.
For a while it became one of the town's largest employers,. mayor Sven Krueger verified.
This is the second time the German solar industry is at. danger. They stopped working once currently, said apprentice Max Lange, 19,. welcoming coworkers with a silent nod as they cleaned idled. equipment on the factory floor.
If it stops working again, I doubt that I will be able to pursue a. profession in the European solar industry, due to the fact that I do not think it. will come back, he said, wondering aloud if he may instead. find work in the U.S. solar market.
(source: Reuters)