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Grupo Elektra Announces Revenue Of Ps.31,385 Million And EBITDA Of Ps.5,435 Million In The First Quarter Of 2021

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-- Continuous dynamism of the commercial business; revenue grew 28%, to Ps.13,383 million in the quarter --

-- 23% increase in deposits at Banco Azteca México, to Ps.190,614 million, consolidates firm prospects for the financial business, with optimal funding cost --

-- Solid growth of Banco Azteca México's loan portfolio; increases 11%, to Ps.105,396 million in the period --

MEXICO CITY, April 28, 2021 /PRNewswire/ -- Grupo Elektra, S.A.B. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America's leading specialty retailer and financial services company, and the largest non-bank provider of cash advance services in the United States, today announced first quarter 2021 financial results.

First Quarter Results

Consolidated revenue grew 4%, to Ps.31,385 million in the period, compared to Ps.30,282 million in the same quarter of the previous year. Costs and operating expenses were Ps.25,951 million, from Ps.29,445 million in the same period of 2020.

As a result, EBITDA was Ps.5,435 million, compared to Ps.837 million a year ago. Operating income was Ps.3,493 million this quarter, from an operating loss of Ps.1,117 million in the same period of 2020.

The company reported net income of Ps.3,048 million, compared to net income of Ps.142 million a year ago.


1Q 2020

1Q 2021

Change




Ps.

%






Consolidated revenue

$30,282

$31,385

$1,103

4%






EBITDA

$837

$5,435

$4,598

----






Operating profit

$(1,117)

$3,493

$4,610

----






Net result

$142

$3,048

$2,906

----






Net result per share

$0.62

$13.39

$12.77

----






Figures in millions of pesos
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
As of March 31, 2020, Elektra* outstanding shares were 228.7 million and as of March 31, 2021, were 227.7 million.

Revenue

Consolidated revenue increased 4%, as a result of a 28% growth in commercial sales, partially offset by a 9% decrease in financial income.

The growth in sales of the commercial business — to Ps.13,383 million, from Ps.10,435 million a year ago — is largely the result of a solid increase in sales of Italika motorcycles — which boosts business productivity and the mobility of families — telephony — that strengthens the connectivity of an increasing number of users — and appliances, that are commercialized with optimal customer service, in the most competitive market conditions.

Sales from the commercial business were further boosted with the development of new stores under a format that offers an optimal mix of products and services, and allows the customer to maximize the purchase experience. Similarly, Omnichannel operations, with the online store www.elektra.com.mx, which sells thousands of products at unparalleled prices, from any device and at any time, further strengthened business performance.

The reduction in financial income — to Ps.18,002 million, from Ps.19,847 million in the previous year — reflects lower interest earned by Purpose Financial in the period, derived from the effects of the health contingency in the company's target market in the US.

Costs and Expenses

Consolidated costs for the quarter decreased 21%, to Ps.13,601 million, from Ps.17,233 million in the previous year. The lower costs are explained, to a large extent, by a 58% reduction in the financial cost, to Ps.4,359 million, from Ps.10,361 million the previous year, which largely reflects the creation of lower loan loss reserves this period.

As previously announced, a year ago an important creditor of Banco Azteca initiated a bankruptcy process (Chapter 11) in the United States, for which the institution decided, prudently, to reserve 100% of the credit of Ps.7,243 million, in the first quarter of 2020.

Commercial business costs grew 34%, to Ps.9,242 million, from Ps.6,872 million, in line with the increase in commercial revenue.

Selling, administrative and promotional expenses grew 1% to Ps.12,350 million as a result, mainly, of higher operating and advertising expenses, partially offset by lower personnel expenses.

EBITDA and net result

EBITDA was Ps.5,435 million, from Ps.837 million in the previous year. The company reported operating income of Ps.3,493 million, compared to an operating loss of Ps.1,117 million in the same quarter of 2020.

The main variations below EBITDA were the following:

A reduction of Ps.2,213 million in foreign exchange gains, due to the company's net asset monetary position in dollars, together with a lower depreciation of the peso this quarter compared to the previous year.

An increase of Ps.1,055 million in other financial results, which reflects a 4% gain this quarter in the market value of underlying assets of financial instruments held by the company — which does not imply cash flow — in comparison to a 1% gain a year ago.

Consistent with the results for the quarter, there was an increase of Ps.1,077 million in the provision for taxes in the period.

Grupo Elektra reported net income of Ps.3,048 million, from a net income of Ps.142 million a year ago.

Unconsolidated Balance Sheet

In order to allow the visualization of the non-consolidated financial situation, a pro forma exercise of the balance sheet of Grupo Elektra is presented, excluding the net assets of the financial business, whose investment is valued under the equity method, in this case.

This presentation shows the debt of the company without considering Banco Azteca's immediate and term deposits, which do not constitute debt with cost for Grupo Elektra. The pro forma balance sheet also does not include the bank's gross loan portfolio.

This proforma exercise provides greater clarity regarding the businesses that make up the company and allows financial market participants to estimate the value of the company, considering only the relevant debt for such calculations.

Consistent with this, debt with cost was Ps.34,802 million as of March 31, 2021, compared to Ps.22,632 million in the previous year. The balance of cash and cash equivalents was Ps.17,230 million, from Ps.4,789 million from the previous year. As a result, net debt as of March 31, 2021 was Ps.17,572 million, compared to Ps.17,843 million a year ago.

As previously announced, during the quarter, Grupo Elektra's subsidiary, Nueva Elektra del Milenio, S.A. de C.V., as originator, placed through a special purpose vehicle established under Luxembourg law, Senior Notes for US$500 million, for seven years, at a 4.875% rate, in international markets.

The Senior Notes are used to fund reserve accounts for the payment of obligations under the Senior Notes and strengthen the liquidity of the company, which allows to further boost the financial soundness of Grupo Elektra.

As of March 31, 2021, the company's stockholders 'equity was Ps.97,118 million, and the stockholders' equity to total liabilities ratio was 1.2 times.


As of March 31, 2020

As of March 31, 2021

Change

Ps.

%











Cash and cash equivalents

$ 4,789

$ 17,230

12,441

260%

Marketable financial instruments

38,697

32,562

(6,135)

(16%)

Inventories

13,980

17,060

3,080

22%

Accounts receivables

51,969

49,912

(2,057)

(4%)

Other current assets

3,843

2,678

(1,165)

(30%)

Investments in shares

40,010

36,848

(3,162)

(8%)

Fixed assets

8,133

7,119

(1,014)

(12%)

Right of use assets

8,807

8,550

(257)

(3%)

Other assets

1,377

3,248

1,871

136%






Total assets

$ 171,606

$ 175,208

$ 3,602

2%






Short-term debt

$ 11,516

$ 18,978

7,463

65%

Suppliers

8,565

8,008

(557)

(7%)

Other short-term liabilities

14,964

14,723

(241)

(2%)

Long-term debt

11,116

15,824

4,708

42%

Differed taxes

11,658

9,777

(1,881)

(16%)

Other long-term debt

9,781

10,778

998

10%






Total liabilities

$ 67,600

$ 78,089

$ 10,489

16%






Stakeholder´s equity

$ 104,006

$ 97,118

($ 6,887)

(7%)






Liabilities and equity

$ 171,606

$ 175,208

$ 3,602

2%

Figures in millions of pesos.

Consolidated Balance Sheet

Loan Portfolio and Deposits

Banco Azteca Mexico, Purpose Financial and Banco Azteca Latin America's consolidated gross portfolio as of March 31, 2021, grew 5%, to Ps.122,091 million, from Ps.116,381 million the previous year. The consolidated delinquency rate was 3.4% at the end of this period, compared to 10.9% the previous year.

The gross portfolio of Banco Azteca Mexico increased 11% to Ps.105,396 million, from Ps.95,361 million a year ago.

The Bank's delinquency rate at the end of the quarter was 3.4%, compared to 11.9% the previous year. The reduction is mainly derived from the credit of Ps.7,243 million that entered the past-due portfolio a year ago, and which at the time was fully reserved.

The average term of the credit portfolio for principal credit lines — consumer, personal loans, and Tarjeta Azteca — was 64 weeks at the end of the first quarter.

Grupo Elektra's consolidated deposits were Ps.189,105 million, 17% higher than the Ps.160,959 million a year ago. Deposits of Banco Azteca Mexico were Ps.190,614 million, 23% higher than the Ps.155,443 million a year ago.

The ratio of deposits to gross portfolio of Banco Azteca Mexico of 1.8 times, consolidates the solid growth prospects of the Bank, with optimal funding cost.

The Bank's liquidity coverage ratio — total of eligible liquid assets / total net cash out — was 626%, an outstanding figure in the Mexican banking sector.

The capitalization index of Banco Azteca Mexico was 14.25%.

Infrastructure

Grupo Elektra currently has 6,736 points of contact, compared to 7,238 units the previous year. The decrease results from the closure of 383 Purpose Financial contact points in the United States — in the context of strategies aimed at boosting online credit operations and strengthening the company's operating efficiency — as well as the closure of 318 contact points in Latin America derived, to a large extent, from the sale of Banco Azteca del Peru in the previous quarter.

In Mexico, in the last twelve months, 32 new Elektra stores were opened in strategic locations, with a format that offers an optimal mix of products and services, and allows the customer to maximize the purchase experience.

The company has 4,960 storefronts in Mexico at the end of the quarter, 1,398 in the United States, and 378 in Central and South America. The important distribution network allows the company to maintain close contact with customers and grants a superior market positioning in the countries where it operates.

Company Profile:

Grupo Elektra is Latin America's leading financial services company and specialty retailer and the largest non-bank provider of cash advance services in the United States. The group operates more than 6,600 points of contact in Mexico, the United States, Guatemala, Honduras, Panama and Peru.

Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast growing, and technologically advanced companies focused on creating: economic value through market innovation and goods and services that improve standards of living; social value to improve community wellbeing; and environmental value by reducing the negative impact of its business activities. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. These companies include TV Azteca (www.TVazteca.com; www.irtvazteca.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Purpose Financial (havepurpose.com), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx), Punto Casa de Bolsa (www.puntocasadebolsa.mx), Totalplay (irtotalplay.mx; www.totalplay.com.mx) and Totalplay Empresarial (totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade shares on the Mexican Stock Market and in Spains' Latibex market. Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. The group of companies shares a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.

Except for historical information, the matters discussed in this press release are concepts about the future that involve risks and uncertainty that may cause actual results to differ materially from those projected. Other risks that may affect Grupo Elektra and its subsidiaries are presented in documents sent to the securities authorities.

Investor Relations:

Bruno Rangel


Rolando Villarreal

Grupo Salinas


Grupo Elektra, S.A.B. de C.V.

Tel. +52 (55) 1720-9167


Tel. +52 (55) 1720-9167

jrangelk@gruposalinas.com.mx


rvillarreal@elektra.com.mx


Press Relations:



Luciano Pascoe



Tel. +52 (55) 1720 1313 ext. 36553



lpascoe@gruposalinas.com.mx


GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

MILLIONS OF MEXICAN PESOS




















1Q20


1Q21


Change










Financial income

19,847

66%


18,002

57%


(1,845)

-9%

Commercial income

10,435

34%


13,383

43%


2,948

28%

Income

30,282

100%


31,385

100%


1,103

4%










Financial cost

10,361

34%


4,359

14%


(6,003)

-58%

Commercial cost

6,872

23%


9,242

29%


2,370

34%

Costs

17,233

57%


13,601

43%


(3,632)

-21%










Gross income

13,049

43%


17,784

57%


4,736

36%










Sales, administration and promotion expenses

12,212

40%


12,350

39%


138

1%










EBITDA

837

3%


5,435

17%


4,598

100%










Depreciation and amortization

1,961

6%


2,029

6%


67

3%










Depreciation right of use asset


0%



0%


-

0%










Other expense (income), net

(8)

0%


(87)

0%


(79)

-100%










Operating income

(1,117)

-4%


3,493

11%


4,610

----










Comprehensive financial result:









Interest income

272

1%


220

1%


(52)

-19%

Interest expense

(902)

-3%


(987)

-3%


(85)

-9%

Foreign exchange loss, net

2,458

8%


244

1%


(2,213)

-90%

Monetary loss

-

0%


-

0%


-

0%

Other financial results, net

479

2%


1,534

5%


1,055

100%


2,307

8%


1,011

3%


(1,295)

-56%










Participation in the net income of









CASA and other associated companies

(621)

-2%


(51)

0%


570

92%










Income before income tax

569

2%


4,454

14%


3,884

100%










Income tax

(238)

-1%


(1,315)

-4%


(1,077)

-100%










Income before discontinued operations

332

1%


3,139

10%


2,807

100%










Result from discontinued operations

(190)

-1%


(90)

0%


99

52%










Impairment of intangible assets


0%



0%


-

----










Consolidated net income

142

0%


3,048

10%


2,906

100%


GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES






CONSOLIDATED BALANCE SHEET







MILLIONS OF MEXICAN PESOS





















Commercial Business

Financial Business

Grupo Elektra


Commercial Business

Financial Business

Grupo Elektra












Change













At March 31, 2020


At March 31, 2021














Cash and cash equivalents

4,789

41,994

46,783


17,230

32,129

49,359


2,576

6%












Marketable financial instruments

8,305

70,180

78,485


5,183

91,709

96,891


18,407

23%












Performing loan portfolio

-

67,611

67,611


-

70,809

70,809


3,198

5%

Total past-due loans

-

6,664

6,664


-

3,428

3,428


(3,235)

-49%

Gross loan portfolio

-

74,275

74,275


-

74,237

74,237


(37)

0%












Allowance for credit risks

-

9,316

9,316


-

8,577

8,577


(738)

-8%












Loan portfolio, net

-

64,959

64,959


-

65,660

65,660


701

1%












Inventories

13,980

-

13,980


17,060

0

17,060


3,080

22%












Other current assets

15,619

28,053

43,672


13,342

14,064

27,407


(16,265)

-37%












Total current assets

42,692

205,186

247,878


52,815

203,562

256,377


8,499

3%












Financial instruments

30,392

313

30,706


27,379

96

27,475


(3,231)

-11%












Performing loan portfolio

-

36,134

36,134


-

47,087

47,087


10,953

30%

Total past-due loans

-

5,972

5,972


-

767

767


(5,205)

-87%

Gross loan portfolio

-

42,106

42,106


-

47,854

47,854


5,748

14%












Allowance for credit risks

-

6,697

6,697


-

1,682

1,682


(5,015)

-75%












Loan portfolio

-

35,409

35,409


-

46,172

46,172


10,763

30%












Other non-current assets

25,781

189

25,970


26,360

358

26,719


748

3%

Investment in shares

1,429

-

1,429


1,629

-

1,629


200

14%

Property, furniture, equipment and











investment in stores, net

8,133

7,817

15,951


7,119

7,768

14,887


(1,064)

-7%

Intangible assets

658

8,157

8,815


519

7,189

7,708


(1,107)

-13%

Right of use asset

8,807

2,262

11,069


8,349

2,470

10,820


(249)

-2%

Other assets

719

683

1,402


2,729

5,857

8,586


7,184

----

TOTAL ASSETS

118,611

260,017

378,628


126,899

273,472

400,372


21,744

6%























Demand and term deposits

-

160,959

160,959


-

189,105

189,105


28,146

17%

Creditors from repurchase agreements

-

16,002

16,002


-

18,409

18,409


2,407

15%

Short-term debt

11,303

943

12,246


18,744

103

18,847


6,602

54%

Leasing

1,727

1,099

2,826


1,331

1,119

2,450


(375)

-13%

Short-term liabilities with cost

13,030

179,002

192,032


20,076

208,736

228,812


36,780

19%












Suppliers and other short-term liabilities

19,090

26,172

45,263


21,154

13,766

34,920


(10,342)

-23%

Short-term liabilities without cost

19,090

26,172

45,263


21,154

13,766

34,920


(10,342)

-23%












Total short-term liabilities

32,120

205,174

237,294


41,229

222,503

263,732


26,438

11%












Long-term debt

11,062

1,951

13,013


15,804

15

15,820


2,807

22%

Leasing

7,653

1,202

8,855


7,817

1,332

9,149


294

3%

Long-term liabilities with cost

18,715

3,153

21,867


23,621

1,347

24,968


3,101

14%












Long-term liabilities without cost

13,786

1,674

15,460


12,739

1,814

14,553


(908)

-6%












Total long-term liabilities

32,501

4,827

37,328


36,360

3,161

39,521


2,193

6%












TOTAL LIABILITIES

64,621

210,001

274,622


77,589

225,664

303,253


28,631

10%












TOTAL STOCKHOLDERS' EQUITY

53,991

50,015

104,006


49,310

47,808

97,118


(6,887)

-7%























LIABILITIES + EQUITY

118,611

260,017

378,628


126,899

273,472

400,372


21,744

6%













INFRASTRUCTURE














1Q20


1Q21


Change










Points of sale in Mexico









Elektra

1,135

16%


1,142

17%


7

1%

Salinas y Rocha

38

1%


36

1%


(2)

-5%

Banco Azteca

1,834

25%


1,848

27%


14

1%

Freestanding branches

1,754

24%


1,934

29%


180

10%

Total

4,761

66%


4,960

74%


199

4%










Points of sale in Central and South America









Elektra

198

3%


107

2%


(91)

-46%

Banco Azteca

402

6%


205

3%


(197)

-49%

Freestanding branches

96

1%


66

1%


(30)

-31%

Total

696

10%


378

6%


(318)

-46%










Points of sale in North America









Purpose Financial

1,781

25%


1,398

21%


(383)

-22%

Total

1,781

25%


1,398

21%


(383)

-22%










TOTAL

7,238

100%


6,736

100%


(502)

-7%





































Floor space (m²)

1,771

100%


1,544

100%


(227)

-13%




























Employees









Mexico

71,560

83%


61,697

88%


(9,863)

-14%

Central and South America

9,646

11%


5,090

7%


(4,556)

-47%

North America

4,812

6%


3,186

5%


(1,626)

-34%

Total employees

86,018

100%


69,973

100%


(16,045)

-19%

Cision
Cision

View original content:http://www.prnewswire.com/news-releases/grupo-elektra-announces-revenue-of-ps31-385-million-and-ebitda-of-ps5-435-million-in-the-first-quarter-of-2021--301279710.html

SOURCE Grupo Elektra, S.A.B. de C.V.

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Last year, Chancellor Angela Merkel’s government agreed to buy a 23% stake in CureVac AG, at the time a key player in the race for a coronavirus vaccine which had been the focus of takeover speculation from the U.S.Alongside similar moves in other member states, Germany’s cabinet on Tuesday approved more changes to rules on foreign investment to give the government enhanced powers to scrutinize transactions that could impact national security. The new regulations, which need parliamentary approval, are targeted at high-technology sectors like artificial intelligence, autonomous driving and quantum computing.France recently halted the purchase of grocery chain Carrefour SA by Canada’s Alimentation Couche-Tard Inc., citing food sovereignty and the need to secure supply chains amid the pandemic. The country also vetoed the Teledyne Technologies Inc.’s purchase of Photonis, a company that makes night-vision gear for the military, citing strategic interests.In recent weeks, Italy coordinated with France to protect truckmaker Iveco SpA from an takeover by China FAW Group Co. Prime Minister Mario Draghi also sent a message by blocking a bid by China’s Shenzhen Invenland Holdings Co. for the small semiconductor firm LPE SpA.Spain’s government has signaled it could block at least two deals, one involving a utility and another involving a maker of aviation components.Under the draft EU rules, companies that generate at least 500 million euros ($600 million) of revenue in Europe and received more than 50 million euros of support from a foreign state in the last three years will need the bloc’s approval for deals.The EU also wants to be able to fine companies as much as 10% of their yearly revenue if it finds a firm unfairly benefited from a foreign subsidy -- including an unlimited state guarantee or credit line that undercuts European rivals. It warns in the draft that it could cancel government contracts granted to firms that gain an unfair advantage from such subsidies.European officials are seeking the power to inspect companies’ offices outside of Europe, with the permission of the company and the knowledge of the foreign state, according to the draft.Regulators suggest ways that companies could allay concerns over subsidies, including granting rivals access to infrastructure, licensing on fair terms or publishing research. Companies can also reduce capacity or market presence, divest assets or refrain from investment, according to the document.The European Commission declined to comment and the Chinese mission to the EU didn’t respond to a request for comment.Despite the tougher stance, the EU continues to actively build business ties with China, including an investment agreement. The bloc has promoted the deal, which could enter into force early next year, as a way to rebalance economic relations with its second-largest trade partner.The accord expands access to the Chinese market for European investors in industries ranging from cars to telecommunications. It also seeks to tackle underlying Chinese policies deemed to be market-distorting, such as industrial subsidies, state control of enterprises and forced technology transfers.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Samsung's Lee family to pay more than $10.8 billion inheritance tax

    The family of late Samsung Electronics Co Ltd Chairman Lee Kun-hee said on Wednesday they will pay over 12 trillion won ($10.8 billion) in inheritance tax for his estate and donate his vast private art collection to state curators. Lee, who is credited with transforming Samsung into the world's largest smartphone and memory chip maker, died on Oct. 25 with an estate local media valued at around 26 trillion won. The inheritance tax bill - one of the largest-ever in South Korea and globally - has been closely watched due to its potential to dilute the family's controlling stake in Samsung.

  • Ford says chip shortage to halve second-quarter vehicle output, but could ease this summer

    Ford Motor Co on Wednesday said it expects a global semiconductor shortage could ease this summer but may not be fully resolved until 2022, as the automaker reported a strong first-quarter profit but said the shortage may slash second-quarter production by half. Ford said the ongoing chip shortage would cost it about $2.5 billion and about 1.1 million units of lost production in 2021. Ford shares were down 2.9% in after-hours trade on Wednesday.

  • Nexon Joins Tesla in Bitcoin Bet With $100 Million Purchase

    (Bloomberg) -- Nexon Co. said it bought $100 million worth of Bitcoin, joining a list of tech companies embracing the digital currency.The online game provider acquired 1,717 Bitcoins at an average price of about $58,226 each, including fees and expenses. The purchase represents less than 2% of Nexon’s total cash and cash equivalents on hand, and is the largest-ever purchase of digital currency made by a company traded in Tokyo, Nexon said.“Our purchase of bitcoin reflects a disciplined strategy for protecting shareholder value and for maintaining the purchasing power of our cash assets,” Owen Mahoney, Nexon’s chief executive officer, said in a statement. “In the current economic environment, we believe Bitcoin offers long-term stability and liquidity while maintaining the value of our cash for future investments.”A growing number of global firms including Tesla Inc. and Square Inc. have moved to purchase Bitcoin in recent months, with more starting to accept the cryptocurrency as a form of payment. Firms in Japan, which was an early leader in Bitcoin acceptance, have been slow to join this trend.Nexon said it intended to guard itself against a potential drop in the value of non-digital currencies in case of inflation, with Mahoney seeing Bitcoin as a “form of cash likely to retain its value, even if it is not yet widely-recognized as such.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • GSK focused on split as cost checks, COVID-19 easings aid earnings

    GSK, which trails competitors in the coronavirus vaccines race, is under the microscope after a report that U.S. activist investor Elliott built up a significant stake. Chief Executive Emma Walmsley said she was focused on GSK's broader transformation, adding that while GSK's consumer health business had great prospects and a "fantastic" leadership team, she would focus on the bigger picture. Walmsley, a former head of GSK's consumer business, became CEO in 2017 despite some investor pressure to name an outsider and such calls may grow with Elliott's arrival on the register.

  • Warren Buffett’s investing success depends on these two traits: Portfolio manager

    Equity Compass Chief Investment Officer Robert Hagstrom — author of "Warren Buffett: Inside the Ultimate Money Mind" — says Buffett's investing success owes to two inextricably linked attributes: Philosophy and method.

  • General Electric reports smaller cash outflow, reaffirms 2021 outlook

    (Reuters) -General Electric's cash outflow was smaller than estimated in the first quarter even as its lucrative jet-engine business struggled with the pandemic-led collapse of air travel, driving down company revenue. The company also reaffirmed its full-year free cash flow and earnings per share outlook. Chief Executive Larry Culp said in an interview the company would update its outlook once it had a better idea how its aviation business would perform in the remainder of the year.

  • EU to hit Apple with antitrust charge this week - source

    EU antitrust regulators are set to charge iPhone maker Apple this week with blocking rivals on its App Store following a complaint by music streaming service Spotify, a person familiar with the matter said on Tuesday. The move, the first EU antitrust charge against Apple, could lead to a fine as much as 10% of Apple's global revenue and changes in its lucrative business model. Sweden's Spotify took its grievance to the European Commission in 2019, saying Apple unfairly restricts rivals to its own music steaming service Apple Music.

  • Analysts cut gold forecasts as economic growth recovers: Reuters poll

    Analysts and traders have slashed their gold price forecasts, with many believing a return to last year's record highs is unlikely as economic recovery tarnishes the safe-haven metal's appeal, a Reuters poll showed on Tuesday. Spot gold has fallen to around $1,775 an ounce from an all-time high of $2,072.50 last August, when the COVID-19 pandemic upended economies and forced central banks to pump money into markets and cut interest rates. Returns on government bonds, an asset class that competes with gold, plunged last year, but U.S. Treasury yields have rebounded, fuelling talk of sooner-than-expected central bank tightening that would hurt bullion.

  • China Is Drinking Barely A Drop of Australian Wine After 200% Tariffs

    (Bloomberg) -- Australian exports of wine to mainland China have almost completely dried up after the Chinese government imposed tariffs of more than 200% last year in an escalating trade spat.Shipments in the three months ended March 31 plummeted to just A$12 million ($9.4 million) from A$325 million in the same period a year earlier, Wine Australia said Thursday. China used to be Australia’s biggest wine export market.China last month formalized tariffs of more than 200% on Australian wine for five years, though the higher duties had been in place since November. The tariffs followed a raft of measures barring Australian imports from coal and copper to barley last year.The slump in China was too steep to compensate for increased shipments from Australia to the U.K., Germany and New Zealand: The value of Australia’s total wine exports fell 4% to A$2.77 billion in the year ended March.Duties on Treasury Wine Estates Ltd., the Australian winemaker best known for its Penfolds brand, were set at 175.6%.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • China's Huawei reports quarterly revenue drop as smartphone income hit

    China's Huawei Technologies saw revenue fall 16.5% in the first quarter compared to a year earlier, hurt by a dip in sales after selling its budget smartphone unit Honor in November. "2021 will be a challenging year for us, but it's also the year that our future development strategy will begin to take shape," Huawei's rotating chairman Eric Xu said in the statement. The ban put Huawei's once lucrative handset business under immense pressure, prompting the sale of its Honor budget smartphone unit to a group of agents and dealers in November.

  • Pricey Corn Has Farmers Feeding Wheat for Humans to Livestock

    (Bloomberg) -- China’s expanding hog herd is vacuuming up the world’s feed grains and forcing traders to dip into wheat reserves, a crop that’s normally saved for humans to eat.According to Archer-Daniels-Midland Co., one of the biggest agricultural traders, corn arriving in China will soon be more expensive than wheat.“China continues to be buying everything they can,” ADM Chief Executive Officer Juan Luciano said Tuesday on a call with investors. “They’re buying corn. But they’re buying wheat” as well.The Asian nation’s soaring demand for animal feed has helped lift crop prices to the highest in years, benefitting traders like ADM and signaling higher meat prices for consumers.Chinese hogs aren’t the only culprits behind pricey corn. The world’s cattle, hogs and chickens are all gobbling up the grain faster than farmers can grow it. Corn is so expensive that it has at times surpassed wheat, a rare occurrence.Earlier this month, a type of wheat grown in the southern U.S. Plains that’s usually used to make flour for bread traded at the biggest discount to corn since 1977.The disparity prompted some U.S. cattle feeders to buy wheat that will get harvested beginning around June.“We are running out of the corn in the country and wheat got really cheap,” said Joe Nussmeier, a broker at Frontier Futures in Minneapolis. By mid-June, “the only thing to feed critters at that time will be wheat.”There are risks, though. Wheat shouldn’t be fed to younger cattle and if cattle eat too much wheat, they get bloated, according to Penn State Extension research. Researchers at North Dakota State University recommend that wheat make up no more than 15% of an animal’s diet when it’s being introduced.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Bank of America, Citi Risk Hit to Their Texas Businesses Over Gun Policies

    (Bloomberg) -- Bank of America Corp. and Citigroup Inc., the top two underwriters in the $3.9 trillion municipal bond-market, are at risk of getting shut out of Texas because of a push by Republican state lawmakers to punish the banks for their restrictive gun policies.The legislation, Senate Bill 19, would block government entities from contracting with banks and other financial services providers that have policies that restrict business with the firearms industry. Under the bill, companies with 10 employees or more seeking a government contract worth at least $100,000 would have to verify in writing that they do not have a policy or directive that “discriminates” against the firearms or ammunition industries.It’s targeted at large banks and financial institutions that have attempted to “use financial pressure to infringe upon our Second Amendment rights,” according to a statement from the sponsors in an analysis of the bill. The legislation is in flux: it already passed the state Senate and is pending in the Texas House of Representatives. While a House companion bill includes language that would exempt debt sales and the “deposit or investment of funds,” the author in that chamber didn’t pursue adding that exemption in the Senate version.“Any company that uses financial pressure in order to limit Texans’ ability to purchase guns or ammunition should not be tolerated,” Senator Charles Schwertner, an author of the legislation, said in a committee hearing on the bill earlier this month.The Texas move to punish the banks comes as Republicans nationally have criticized companies for stepping into politics. Senate Minority Leader Mitch McConnell said corporate executives should “stay out of politics” in response to the backlash against a Georgia law that limits voting access.BlackRock’s Fink, Buoyed by Record Inflows, Vows ‘Loud’ ActivismIf the Senate version is enacted, the law could hurt the banks’ municipal underwriting businesses in Texas, a huge market for state and local debt deals. Texas-based borrowers sold more than $58 billion of bonds in 2020, the second-most of any state behind California, according to data compiled by Bloomberg. As part of bond offerings, borrowers often hire banks ahead of time and pay them a fee for underwriting the sales.Elizabeth Reich, chief financial officer of Dallas, said the bill could have wide-ranging impacts on the city, including limiting competition for its debt sales. The bill could also affect banking relationships: Dallas had $257 million in deposit with Bank of America at the end of February, she said.“If I’m limited in who I can do business with and talk to and engage with, that’s going to raise my costs and increase the cost to the taxpayers,” she said.The banks announced policies that set restrictions on the firearms industry in 2018 after a shooting at Marjory Stoneman Douglas High School in Parkland, Florida, left 17 people dead. Citigroup said it would prohibit retailers that are customers of the bank from offering bump stocks or selling guns to people who haven’t passed a background check or are younger than 21.Bank of America also announced in 2018 it would stop making new loans to companies that make military-style rifles for civilian use. Its policy came after dozens of employees lost family members or suffered other trauma related to mass shootings in the past few years.Gun-friendly Texas has become important to the National Rifle Association, which filed for bankruptcy protection this year and said it would move to the state. In an article this month, the Institute for Legislative Action, an NRA lobbying arm, celebrated “pro-Second Amendment” legislation in Texas, including the legislation targeting the banks.BofA Says 151 Employees Were Affected by Mass Shootings in U.S.‘Discriminatory’ PoliciesIt’s unclear how wide-reaching the law would be, and there could be further changes to the language. The legislation would affect governmental entities, which Texas government code defines as state agencies, as well as political subdivisions like counties, municipalities and school districts -- a potentially wide swath of muni borrowers.Giovanni Capriglione, the lawmaker who authored the House bill, said in a written response to questions from Bloomberg News that he proposed the bill because of a shortage of ammunition in the state “caused by discriminatory policies implemented by banks.”“It is estimated that over 26,000 Texans are employed by this industry and they account for about $4.5 billion in economic impact,” Capriglione said. “If these businesses can’t operate because banks refuse to provide them with access to essential services, then the state loses these jobs and the economic impact they provide.”Capriglione confirmed that banks’ underwriting business would be affected by Senate Bill 19.Dan Patrick, the lieutenant governor who wields strong influence in the Texas legislature, said in a statement this month that he’s supportive of the Senate bill, citing the Second Amendment. A spokesperson for his office did not respond to a request for comment. The NRA lobbying arm’s article said that the bill was prioritized by Patrick.It’s not the first time that Republican state officials have sought to punish the two banks for their gun policies. In 2018, Louisiana officials voted to ban Bank of America and Citigroup from working on a debt sale.Texas ImpactTexas offers big business in the $3.9 trillion municipal bond market. The state’s booming population makes it ripe for future sales as the need for new roads, schools and other infrastructure projects mounts.The bill could cut off Texas muni issuers from the two biggest banks in the state and local debt market. Citigroup was the biggest underwriter of Texas muni-bond sales in 2020, credited with managing more than $6 billion of sales, and Bank of America was ranked as the fifth-biggest last year, credited with managing about $3.8 billion of bonds, according to data compiled by Bloomberg.Overall, Bank of America and Citigroup are the two biggest municipal underwriters, managing a combined 25% of long-term state and local debt sales so far this year, according to data compiled by Bloomberg.Spokespeople for both banks declined to comment. SIFMA, a lobbying group for broker-dealers and investment banks, also declined to comment.Kevin Lyons, a spokesperson for the Texas Comptroller of Public Accounts, said in an emailed statement that the office is following the legislation and reviewing its contracts to determine what impact it would have on its services.He said the bill would require state agencies to include a new provision in contracts made after Sept. 1. “If banks (or other entities) do in fact maintain such a policy it will likely be difficult for them to sign off on such a contract in the future,” he said in the statement.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Latest Ripple price and analysis (XRP to USD)

    Ripple’s XRP token has enjoyed a magnificent rally to $1.44 after rising by 59.28% from Friday’s low of $0.87. The world’s fourth largest cryptocurrency by market cap is 11.

  • Investor questions for the Fed: what about inflation, bond buying and rates?

    Investors will be scrutinizing the Federal Reserve's comments at the close of its policy meeting this week, which will come on Wednesday, for insight into the central bank's thinking on inflation, bond purchases and risks to the financial system posed by soaring asset prices. WHERE IS INFLATION HEADED? The Federal Reserve has said it expects some inflationary pressures, but predicts it will be temporary and not enough to warrant interest rate hikes.

  • Musk Says Tesla Sold Bitcoin to Prove Liquidity as Cash Alternative

    (Bloomberg) -- Elon Musk said Tesla Inc. sold 10% of its Bitcoin holdings to demonstrate the token’s liquidity, while adding that he’s retained his personal investment in the cryptocurrency.Tesla’s earnings report showed the firm -- which bought more than $1 billion of the tokens earlier this year -- generated $101 million in income from the sale. Musk said on Twitter that Tesla in essence was trying “to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.”The world’s largest cryptocurrency was up 2.3% to $54,503 as of 10:18 a.m. in London on Tuesday. It’s tumbled from a peak of almost $64,870 in mid-April but is still up sevenfold in the past year.The electric-vehicle maker put cryptocurrencies onto the agenda of corporate treasurers worldwide with its investment in Bitcoin. While many continue to view the token as just too risky to be compared with cash, Tesla’s Chief Financial Officer Zachary Kirkhorn said on an earnings call that the company believes in Bitcoin’s long-term value.For a number of strategists, Bitcoin and other tokens are purely speculative investments rather than legitimate alternatives to cash. For instance, BCA Research Inc. argues that Bitcoin fails as a store of value or unit of account owing to its volatility, even though these are basic functions of money.However, Musk has been a high-profile supporter of cryptocurrencies for some time and late last month announced that Tesla would begin accepting payment for its vehicles in Bitcoin.Tesla fell as much as 3.1% in late trading after its results were announced Monday despite a record profit in the first quarter.(Updates Bitcoin price)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Natural Gas Price Fundamental Daily Forecast – Maintenance-Related Output Drop Driving Bullish Price Action

    The May natural gas futures contract goes off the board on Wednesday so be prepared for another volatile session.

  • Google owner sees record profits as lockdown boom continues

    Alphabet sees earnings soar as people stuck at home in the pandemic used more of its services.

  • Samsung's Lee family to pay more than $10.8 billion inheritance tax

    SEOUL (Reuters) -The family of late Samsung Electronics Co Ltd Chairman Lee Kun-hee said on Wednesday they will pay over 12 trillion won ($10.8 billion) in inheritance tax for his estate and donate his vast private art collection to state curators. Lee, who is credited with transforming Samsung into the world's largest smartphone and memory chip maker, died on Oct. 25 with an estate local media valued at around 26 trillion won. The inheritance tax bill - one of the largest-ever in South Korea and globally - has been closely watched due to its potential to dilute the family's controlling stake in Samsung.