Comment: From Russia with love, and a healthy profit
BOB Dudley has been looking for some good news ever since he took over the reins at BP in the wake of the disastrous Gulf of Mexico spill. Yesterday he got some.
State-owned Russian giant Rosneft’s acquisition of the TNK-BP joint venture should be positive for BP shareholders, although healthy returns were never really the problem with the JV, only politics and personalities.
BP’s stake in Rosneft will eventually climb to 19.75 per cent, ensuring it retains a healthy foothold in a vital market that has accounted for a quarter of its global production.
The deal gives the country a company that will pump more oil and gas than ExxonMobil and there was some surprise that the Russian government was prepared to allow the British major to take such a substantial holding. But the Russians are expanding their horizons, notably into the Arctic, and want access to BP’s skills and technology.
BP can hopefully look forward to a more stable Russian relationship.
Big guns are misfiring so we all must worry
THE run-rate of quarterly profit warnings in Scotland is usually in low single digits, even when the economy is grinding along the bottom.
On such small numbers it is easy to get over-alarmed when there is talk of a doubling in the figures.
However, the four reported in the last quarter compares with two in the same period in each of the past three years. We have also had two already in this quarter which opened at the start of this month and therefore augurs badly for the remaining nine weeks.
Amid talk of Britain emerging from recession when third-quarter GDP figures are released, it is a little concerning to see companies that have appeared almost bomb-proof included in the list of those now suffering from weaker earnings.
Aggreko, the big beast of the temporary power industry, has been a sure-fire winner for investors, but has stumbled over bad debt and currency fluctuations which prompted a 7.2 per cent fall in its shares on Friday and a further fall yesterday.
Devro, the meat casings firm, yesterday also had to admit to adverse currency movements which, on top of rising costs, would impact negatively on full-year operating profits.
One piece of good news following the statement was that chairman Steve Hannam had been buying shares in the company, so he must be confident that any problems are temporary.
Black cabs may have reached end of the road
THE black cab company Manganese Bronze did the inevitable yesterday and called in the administrator. After a series of setbacks, including the latest problem with its steering boxes, there appeared to be no other outcome.
The company has been loss-making for four years, hindered by the consumer downturn and by the growth of rivals who will now look over the remnants of the business as the administrator tries to find a buyer.
It is a worrying prospect for Coventry, a city synonymous with car manufacturing, which hopes its last representative can pull through and reach a deal.
This is also a rare blip in what has been a positive year for the British automotive industry, with sales to overseas buyers surging and thousands of jobs created.
Manganese may be the producer of an iconic vehicle recognisable around the world, but its underlying difficulties mean some hard choices lie ahead.
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Sunday 19 May 2013
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