COMPANY NEWS IN BRIEF

15 April 2021 | Business

Tesco reports 2 billion pounds profit

Tesco, Britain's biggest retailer beat its guidance by reporting total adjusted retail operating profit of 1.99 billion pounds (US$2.74 billion) after seeing "exceptionally strong" sales during the Covid-19 pandemic.

The retailer reported a 6.3% rise in group like-for-like sales, including a 7.7% lift in its core British market. UK online surged 77% to 6.3 billion pounds as it doubled capacity to 1.5 million slots a week.

Operating profit, however, fell 14.7% as the company incurred costs in adapting to the pandemic. Chief Executive Ken Murphy said Tesco had shown incredible strength and agility.

"While the pandemic is not yet over, we're well-placed to build on the momentum in our business," he said.

It said that while some of the additional sales volumes would fall away as Covid-19 restrictions ease, it expected a strong recovery in profitability and retail free cash flow as the majority of the costs incurred in the pandemic would not be repeated. - Nampa/Reuters

American Airlines expects 1Q revenue to plunge

American Airlines said on Tuesday it expects its first-quarter revenue to plunge about 62% compared with the same period in 2019, and to post a loss of about US$2.7 billion to US$2.8 billion, excluding the gains from a payroll support program.

The company had previously forecast a decline of between 60% and 65%. Earlier in the quarter, the airline reached an agreement with Boeing to defer delivery of 18 Boeing 737 MAX aircraft to 2023 and 2024 from the previous target of 2021-2022, and convert five 787-8 aircraft to 787-9 aircraft.

American Airlines now expects its average daily cash burn rate for the quarter to be about US$27 million per day compared to its previous forecast of US$30 million.

Excluding about $8 million per day of regular debt principal and cash severance payments made, the company's cash burn rate turned positive in March, American Airlines said in a regulatory filing.

It expects to end the first quarter with nearly US$17.3 billion in total available liquidity. - Nampa/Reuters

United Airlines to fund sustainable aviation

United Airlines said on Tuesday it has partnered with global firms including Nike and Siemens in an 'Eco-Skies Alliance' to finance use this year of about 3.4 million gallons of low-carbon, sustainable aviation fuel derived from trash.

Though tiny compared with the 4.3 billion gallons of jet fuel that United consumed in 2019 prior to the start of the Covid-19 pandemic, the amount triples the roughly 1 million gallons of sustainable fuel it has used each year since 2016.

Airlines have used sustainable fuel since 2008 as part of efforts to reduce outright emissions, but so far this represents barely 1% of the fuel used worldwide, industry groups say.

Chicago-based United did not disclose the cost of the plan, nor how much its 11 partners would contribute. It said the project gives customers a way to help reduce the environmental impact of flying beyond buying carbon offsets.

Air transport accounts for 2%-3% of greenhouse gas emissions, the French aerospace association said on Tuesday. Environmental groups argue the sector's overall contribution is higher. - Nampa/Reuters

Scale raises US$325 mln at US$7 bln valuation

Scale AI said on Tuesday it had raised US$325 million in fresh funding, doubling its valuation to US$7 billion in just over four months, as the artificial intelligence (AI) firm plans to increase hiring and expand its product offerings.

Investment firms Dragoneer, Greenoaks Capital and Tiger Global co-led the Series E funding round, which included new investors Wellington Management and Durable Capital. Existing shareholders Coatue, Index, Founders Fund and YC also took part.

Scale, which counts the US Department of Defense and the US Air Force among its customers, raised US$155 million at a US$3.5 billion valuation in December.

The company uses AI to improve the accuracy of documents processing, categorize products and make logistics paperwork easier to execute.

"The AI industry is at an inflection point where every business is looking to implement an AI strategy and we are starting to see a real-world impact," Neil Mehta, founder of Greenoaks Capital, said in a statement. - Nampa/Reuters

Norwegian Air to raise more money

Norwegian Air now aims to raise up to 6 billion crowns (US$711 million) in fresh capital before emerging from bankruptcy protection next month, more than the 4.5 billion originally planned, the company said yesterday.

"We want to take a conservative approach at a time when the pandemic and travel restrictions continue to create unpredictability in the travel sector," Chief Executive Jacob Schram said in a statement.

Financed largely by debt, Norwegian Air grew rapidly, serving routes across Europe and flying to North and South America, Southeast Asia and the Middle East before the Covid-19 pandemic plunged the airline into crisis.

Courts in Oslo and Dublin have recently given their approval for Norwegian to sharply cut its debt by converting it to stock, but the rulings were conditional on Norwegian raising at least 4.5 billion crowns in additional funds.

The survival plan brings an end to Norwegian's long-haul business, leaving a slimmed-down carrier focusing on Nordic and European routes, but the ongoing spread of the virus continues to hamper the industry. - Nampa/Reuters

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