(An item published at 1259 GMT misstated the market prices. The correct version follows.)
LONDON (Alliance News) - Anglo-Dutch consumer goods and food giant Unilever Tuesday kicked off the latest UK earnings season, reporting lower revenues for the fourth quarter and whole of 2013, but its earnings beat expectations as margins were supported by price increases and cost cutting.
The company said it is facing increased competition in its still-weak developed markets, while growth has moderated in emerging markets, a reality that Chief Executive Paul Polman says the company now has to just "deal with". While its personal care brands, like Dove, are doing well, sales of its refreshment brands and some of its food brands, like its spreads, fell.
Warning that competition will remain fierce in 2014, Polman pledged to stay focused on raising margins, even though it will invest in re-invigorating its stalled food business.
Unilever was joined by the likes of SABMiller, PZ Cussons and digital media company Next Fifteen Communications Group in warning that recent currency moves were weighing on earnings.
Brewing giant SABMiller reported higher sales for its fiscal third quarter that met analysts' expectations, as volumes rose and it managed to raise prices. Growth continued to be driven by emerging markets like Africa, Latin America and China. However, "depreciation of key currencies against the US dollar will adversely impact reported results," it warned.
Unilever's 2013 operating profit came in at EUR7.51 billion, up 8% from EUR7.0 billion in 2012. However, it said the increase would have been 15% is currencies had stayed constant during the year.
Next Fifteen, meanwhile, said the current strength of sterling against both the US dollar and the Euro will hold back its revenues and profits, even though trading was off to a strong start in the financial year.
In economic news, British Chancellor of the Exchequer George Osborne will be eagerly awaiting the latest growth forecasts from the International Monetary Fund later Tuesday. The fund is widely reported to be about to raise its forecasts for UK growth more than for any other major economy.
The United Nations Tuesday predicted that the world economy will grow 3% this year and 3.3% in 2015, after growth of 2.1% in 2012.
Backing the growth forecasts, the International Energy Agency nudged up its global oil demand growth forecast for 2014, citing demand strength. It moved up its global oil demand forecast by 1.3 million barrels a day, after reporting stronger-than-expected demand in the fourth quarter of last year.
In the UK, the value of mortgages disbursed by UK banks remained broadly stable in December from the previous month, figures released by the Council for Mortgage Lenders revealed. The total value of mortgage lending was GBP17 billion in December, up 49% on the same month in 2012 and the highest for that month since December 2007.
Meanwhile, British manufacturing order growth during three months to January hit the highest since April 2011, survey data from the Confederation of British Industry showed Tuesday.
Elsewhere, The Thai government has declared a 60-day state of emergency in Bangkok and parts of nearby province, after almost 80 days of anti-government protests in the capital that have taken a more violent turn in recent days, media reports in the country say.
Protests in Ukraine capital Kiev also continued overnight, when hundreds of radical opposition supporters pelted police with Molotov cocktails and cobblestones. Opposition leader and former boxing champion Vitaly Klitschko warned protesters that the government was sending paid thugs to destabilise the situation.
Iran may be taking steps to limit its nuclear programme, but that doesn't mean it's in step with the majority of the international community on regional issues. UN Secretary General Ban Ki-moon has revoked his invitation for Tehran to attend Wednesday's Syrian peace conference, saying Iranian officials had failed to support the goals of the international talks.
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FTSE 100: Up 0.1% at 6,845.85
FTSE 250: Down 0.3% at 16,183.93
AIM ALL-SHARE: Down 0.1% at 881.32
GBP-USD: 1.6431
EUR-USD: 1.3529
GOLD: USD1,243.90 an ounce
OIL (Brent): USD107.71 a barrel
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KEY UK CORPORATE NEWS:
FTSE 100: IMI is proposing to return GBP620 million, or 200 pence a share, to shareholders from proceeds of the disposal of its Beverage Dispense and Merchandising division. Melrose Industries, meanwhile, said it plans to use part of the proceeds from FKI business disposals to return about GBP600 million to shareholders, after using some of the proceeds to pay down borrowings. GlaxoSmithKline's joint venture Viiv Healthcare Ltd has had its Tivicay integrase inhibitor approved for use in combination with other anti-retroviral medicinal products for the treatment of HIV by the European Commission.
FTSE 250: African Barrick Gold has exceeded its initial 2013 gold production guidance and continued its cost cutting. Gold production of 641,931 ounces was 3% higher than in 2012 and significantly exceeded guidance of between 540,000 and 600,000 ounces. Its preliminary fourth quarter all-in sustaining cost was USD1,171 per ounce of gold sold, down 30% on the previous year and 8% on the previous quarter. Polymetal International produced 1.3 million ounces of gold equivalent in 2013, a 21% increase on the previous year and above its production guidance of 1.2 million ounces. Cairn Energy plans to drill nine wells in its 2014 exploration programme across a mix of different areas. John Wood Group has secured two major contract extensions in Africa worth USD250 million. Carphone Warehouse has reiterated its full-year guidance after it saw 3.1% like-for-like revenue growth in its fiscal third quarter and encouraging progress on its sales of 4G services. Like-for-like sales were up 5% in the UK. Marston's says trading in the financial year to date has been "encouraging", with profitability in line with expectations, boosted by good trading over the Christmas and New Year period. The brewer also said that it achieved like-for-like sales growth across is business estate. PZ Cussons said revenue for the half-year was up 4.1%, in line with management expectations, as it boosted its interim dividend to 2.53 pence per share. Restaurant Group has started searching for a replacement for Chief Executive Officer Andrew Page, who will retire in August. Intermediate Capital Group said it raised EUR1.1 billion of new third-party money in the third quarter, lifting nine-month gross inflows above the full previous year. Petra Diamonds has found an "exceptional" 29.6 carat blue diamond at its Cullinan mine in South Africa.
AIM: Rose Petroleum is a big gainer after it completed the previously announced acquisition of two fracking licences in Germany. The company said it has purchased the entire share capital of Parkyn Energy Holdings PLC, which owns 100% of the German licences through its subsidiary Parkyn Energy Germany Ltd, for EUR400,000. Pressure Technologies is doing well after its alternative energy division, Chesterfield BioGas, was awarded a GBP4.2 million contract to upgrade biogas supply equipment to the UK energy grid, and is also in advanced talks on potential further deals. IQE is another gainer as it said it expects to report 2013 revenue of at least GBP126.0 million, up 43% from GBP88.0 million in 2012. The company also expects Ebitda of at least GBP24.5 million, up 49% from GBP16.4 million in 2012, as it improved its operational efficiency. Touchstone Gold is a big faller after it warned that if it cannot find additional funding it will not be able to meet scheduled payments to vendors of its concession contracts. Touchstone also said it has managed to enter into an agreement to grant 6.5 million shares at a price of 0.932 pence per share by way of a private placement. Red Rock Resources is another faller after it raised GBP360,000 by placing 77 million shares at 0.47 pence each. The proceeds of the placing will be put towards repayments and working capital. Corero Network Security is down after the network security provider said it expects its Ebitda loss to widen for 2013.
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AFTERNOON WATCHLIST: US Redbook Index, IMF Global Growth Forecasts
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Wednesday's Key UK Corporate Events
JD Wetherspoon Trading statement
Optos Interim Management Statement
BHP Billiton December Quarter Production, Exploration, Development Report
Hochschild Mining Production Report
Land Securities Group Interim Management Statement
Noble Corporation Q4 Results
Sage Group Interim Management Statement
London Mining Production Report
Findel Interim Management Statement
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Wednesday's Key Economic Events
All Day World Economic Forum - Davos
03:00 Japan BoJ Interest Rate Decision
09:30 UK Bank of England Minutes
09:30 UK ILO Unemployment Rate
09:30 UK Public Sector Net Borrowing
12:00 US MBA Mortgage Applications
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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1
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