Company news in brief

22 November 2021 | Business

Alibaba slashes sales outlook

Chinese e-commerce giant Alibaba Group Holding Ltd, slashed its forecast for annual revenue growth on increased competition and a regulatory crackdown, sending its stock tumbling 11%.

Alibaba now expects revenue for the year ending in March to rise between 20% and 23%, the slowest pace since its 2014 stock market debut and down from a May forecast of 29.5% growth. The company also undershot expectations for earnings per share in the second quarter.

Chinese shoppers have become more cautious about spending amid coronavirus outbreaks and that, combined with supply disruptions, contributed to slower growth for China's economy in the quarter.

But analysts also noted that while Alibaba had been hit by slower-than-expected growth in demand for fashion and accessories, its rivals had done much better in apparel sales.

At the same time, big e-commerce companies in China are having to contend with the expansion into e-commerce from the likes of short video apps Kuaishou and ByteDance's Douyin and which are now benefiting from unprecedented regulatory efforts to ensure there is more competition in the marketplace. – Nampa/Reuters

GM flags concern over renewable energy in Mexico

A senior executive of carmaker General Motors raised concern about the future of renewable energy usage in Mexico, saying that without a solid legal basis for it, automotive investment in Latin America's no. 2 economy would suffer.

Francisco Garza, chief executive of GM Mexico, spoke as debate rages over a Mexican government proposal to give priority to the state-run power utility in the electricity market at the expense of private investors, particularly in renewable energy.

Participating in a panel in Mexico City, Garza said it was important for Mexico to forge conditions enabling investment in renewables, to which the company was itself committed.

"Unfortunately, if the conditions aren't there, Mexico won't be a destination for investment, because the conditions won't be given that permit us to meet our objective of having zero emissions in the long term," Garza said.

GM, which has been one of the top investors in Mexico since the start of the North American Free Trade Agreement in 1994, earlier this year said it planned to invest US$1 billion to build electric vehicles in the northern state of Coahuila. – Nampa/Reuters

Ryanair drops London listing

Ryanair gave notice on Friday of its intention to delist from the London Stock Exchange next month, saying the volume of trading did not justify the costs related to retaining an additional listing.

The Irish airline said on Nov.1 that it was planning to drop the listing due to a fall in trading volumes there, dealing a blow to London's status as a global financial centre after Brexit.

The move comes after its British shareholders' voting rights were restricted post-Brexit and followed miner BHP saying in August it would do away with its dual-listed structure and make Sydney its main listing.

Royal Dutch Shell's decision on Monday to scrap its dual share structure and move its head office to Britain from the Netherlands has also renewed focus on dual listings, which are often criticised as both complex and expensive.

Ryanair said the last day of trading of its shares on the LSE would be Dec. 17. It will continue to hold a primary listing on Euronext Dublin and list its American Depository Receipts (ADRs) on the US Nasdaq. In 2012 it downgraded its listing on the LSE from premium to standard. – Nampa/Reuters

Google signs 5-year deal with AFP

Alphabet Inc's Google will begin paying Agence France-Presse for its news content as part of broad five-year partnership announced that marks one of the biggest licensing deals struck by a tech giant under a new French law.

News organisations, which have been losing ad revenue to online aggregators such as Google and Facebook, have complained for years about the tech companies using stories in search results or other features without payment.

New laws in France and Australia - fueled by media lobbying and public pressure - have given publishers greater leverage, leading to a slew of licensing deals around the world collectively worth billions of dollars.

The AFP accord follows France enacting a copyright law that creates “neighboring rights,” requiring big tech companies to open talks with news publishers that want a licensing payment.

Google declined to disclose financial terms of the deal, but confirmed it would run for five years. The companies said in a joint press release that they also will collaborate on projects, such as fact-checking. – Nampa/Reuters

Evergrande sells streaming platform stake

China Evergrande Group is selling its entire stake in streaming services firm HengTen Network Group for HK$2.13 billion (US$273.5 million), as the cash-strapped developer struggles to avoid a debilitating default on its debts.

However, S&P Global Ratings said in a report on Thursday that a default is still "highly likely" for the world's most indebted developerdespite its recent bond coupon payments because it has a bigger test in March and April next year, facing a total of US$3.5 billion maturities in dollar bonds.

"We still believe an Evergrande default is highly likely," it said.

"The firm has lost the capacity to sell new homes, which means its main business model is effectively defunct. This makes full repayment of its debts unlikely," it said.

The Shenzhen-based real estate company has been stumbling from deadline to deadline in recent weeks as it grapples with more than US$300 billion in liabilities, US$19 billion of which are international market bonds. – Nampa/Reuters

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