COPENHAGEN: A.P. Moller-Maersk, the world’s biggest shipping firm, said the container business on which it is staking its future made a loss in the last three months as freight rates declined further.
Shares in the Danish company fell 9 percent after third quarter profit fell 44 percent and came in below forecasts. Low oil prices have depressed returns from the energy business which is the other main arm of the company.
The results underline the problems facing the family-controlled group which said in September it would focus its attention on building up its transport and logistics business, while creating a separate energy division.
The company stuck to its forecast for annual profit to be significantly below last year’s $3.1 billion.
“This is far from a satisfactory result for us,” said Soren Skou, who was appointed CEO of the group in June and still heads the container business.
“We grew more than the market and gained some market share in the third quarter,” said Skou, adding that Maersk managed to increase market share following the collapse of South Korea’s Hanjin Shipping.
However, Maersk said average freight rates fell 16 percent in the quarter to $1,811 per 40-foot container as overcapacity hurts shipping companies.
A net loss of $116 million for its container unit, against analysts’ expectations of a $174 million profit, shows the pressures as it seeks to remain the world’s leading container shipping carrier amid a wave of mergers and acquisitions.
Recent deals have involved China’s COSCO, France’s CMA CGM and Germany’s Hapag-Lloyd.
Japan’s top three shipping firms Kawasaki Kisen, Mitsui O.S.K. Lines and Nippon Yusen said on Monday they planned to combine their container shipping operations in a joint venture that will have $19 billion in combined revenues and control 7 percent of global container capacity.
Maersk has a market share of around 15 percent but has been unable to secure better prices for shipping goods.
“Everyone expected that rising spot freight rates after the Hanjin bankruptcy would start flowing into Maersk results quickly,” said Rahul Kapoor, analyst at Drewry in Singapore.
“But even as spot rates moved up, it didn’t show in the contract prices,” he said.
Net profit fell to $438 million for the three months to Sept. 30, below the $490 million expected by analysts in a Reuters poll.
Maersk, with a fleet of more than 600 ships, intends to develop its transport and logistics operations despite their problems, while creating a separate energy division combining Maersk Oil and three related companies.
The latter will be split from the main company individually or in combination “in the form of joint-ventures, mergers or listing,” within two years, the company said in September.
Maersk container business sinks to quarterly loss
Maersk container business sinks to quarterly loss
ACWA Power signs deal for major green hydrogen project in Tunisia
- Saudi-listed company plans first phase with capacity of 200,000 tons per year powered by 4GW of renewable energy
- Tunisia envisioned as major site for green hydrogen production and export to Europe
TUNIS: Saudi-listed ACWA Power, the world’s largest private water desalination company and a leader in energy transition, has signed an agreement with the Tunisian government for a project that will produce up to 600,000 tons per year of green hydrogen in three phases, for export to Europe.
The memorandum of understanding was signed by Fatma Thabet Chiboub, Tunisia’s minister of industry, mines and energy, and Marco Arcelli, CEO of ACWA Power.
ACWA Power will develop, operate and maintain 12GW of renewable energy electricity generation units including storage systems and transmission lines, along with water desalination plant, electrolyzers and infrastructures to connect to the main pipeline.
The first phase will involve installing 4GW of renewable energy units, 2GW of electrolyzer capacity, as well as battery storage facilities, to produce 200,000 tons per year of green hydrogen, which will be exported through the South2 Corridor, a hydrogen pipeline initiative led by European TSOs connecting Tunisia to Italy, Austria and Germany.
Commenting on the announcement, Ouael Chouchene, secretary of state for energy transition, said: “This project aligns perfectly with the Tunisian government’s national green hydrogen strategy released in October 2023, which targets an annual production of 8.3 million tons of green hydrogen and byproducts by 2050. We are confident that this agreement with ACWA Power will leverage Tunisia’s strengths, including its strategic geographic location, existing infrastructure, and skilled workforce, to create a more sustainable future for the country.”
The project will play an integral role in supporting Tunisia’s National Strategy for the Development of Green Hydrogen and its Derivatives, which was launched in October 2023. The strategy includes an action plan to export more than 6 million tons of green hydrogen to Europe by 2050.
“We are excited to work with the Tunisian government on this visionary project, bringing our expertise in renewables, desalination and green hydrogen to build a bridge with Europe to help reach its decarbonization targets. This project can also contribute significantly to economic growth, job creation, and sustainable energy solutions, exemplifying our shared vision for a greener future,” Arcelli said.
The agreement highlights ACWA Power’s ambition to rapidly expand its green hydrogen portfolio. Construction is well underway at the NEOM Green Hydrogen Project, a joint venture between ACWA Power, Air Products, and NEOM, to create the world’s first utility-scale green hydrogen plant, capable of producing 1.2 million tons of green ammonia per year.
Work is also underway on ACWA Power’s second green hydrogen project, in Uzbekistan. The first phase of this project will be capable of producing 3,000 tons of green hydrogen per year.
Pakistan’s planning ministry forecasts growth at 3.6% for next year
- The ministry anticipates inflation to decline to 12 percent in its annual plan review
- The Pakistan government is expected to present this year’s budget on June 10
ISLAMABAD: Pakistan’s Planning Ministry said on Friday that the economic outlook for the next year was positive, with a growth target of 3.6 percent, while inflation was likely to moderate to 12 percent.
Pakistan will present its annual budget on June 10, three days later than expected, two government sources said on Friday, as markets wait for details of plans seen as crucial to securing a new International Monetary Fund (IMF) loan. Pakistan’s fiscal year starts on July 1.
“The growth prospects hinge upon political stability, exchange rate, macroeconomic stabilization under IMF’s program and expected fall in global oil and commodity prices,” the ministry said in its annual plan review.
Earlier in May, in its half-yearly report, Pakistan’s central bank said the economy was grappling with structural bottlenecks exacerbated by political uncertainty, despite some improvement in macroeconomic indicators. It predicted real GDP growth of 2 percent-3 percent for fiscal 2024.
The Planning Ministry said the fiscal deficit would narrow on the back of fiscal consolidation measures, and that domestic average inflation was likely to moderate to 12 percent owing to falls in global inflation.
Pakistani inflation is set to come in between 13.5 percent and 14.5 percent in May and to ease further to 12.5 percent to 13.5 percent by June, the finance ministry said on Wednesday in a monthly update.
Pakistan has been beset by inflation above 20 percent since May 2022, registering a high of 38 percent in May 2023, as it navigated reforms as part of an International Monetary Fund bailout program. However, inflation has slowed over the past few months.
The planning ministry added that the Annual Plan Coordination Committee had approved an estimated 1.22 trillion rupees ($4.39 billion) for public sector development spending during the next fiscal year, lower than the 2.8 trillion rupees ($10 billion) requested by the ministries, due to fiscal constraints.
Informatica spearheads Saudi digital transformation with cloud-powered solutions
RIYADH: Saudi Arabia is set to elevate its tourism and services to a “world-class experience” through cloud-powered digital solutions by partnering with enterprise software developer Informatica Inc., said a senior executive.
In an interview with Arab News, the company’s CEO, Amit Walia, expressed admiration for the rapid growth of tourism and the significant attention the Kingdom has given to enhancing the journey for visitors.
Walia said: “I was very impressed and amazed by the amount of focus on the end customer, the tourist, and how to make that experience the best in the world. Making sure that the information is readily available so that the experience is great.”
He emphasized that the company wants to assist in achieving this goal and can contribute to developing tourism and infrastructure in Saudi Arabia.
Walia highlighted the potential to enhance visitor experiences, both religious and non-religious, by leveraging data and technology in areas such as transportation, accommodation, and leisure facilities.
Informatica enables businesses to utilize their information and AI by connecting and managing data across any multi-cloud or hybrid system, facilitating modern business strategies.
The CEO spoke to Arab News on the sidelines of the first major data innovation summit, Informatica Summit Saudi Arabia 2024, in Riyadh.
The gathering was organized to outline a roadmap for how the nation can fast-track its vision of becoming a cloud-first, data-driven state ahead of the World Expo 2030.
He stressed the company’s ability to manage supply chains and ensure data security and governance, suggesting that these capabilities can enhance the Kingdom’s operational efficiency as a digital enterprise.
Walia also highlighted Informatica’s belief that its investment in Saudi Arabia will accelerate the nation’s AI and cloud-focused digital transformation, ultimately benefiting its advancement.
“All the big partners you have standardized on Informatica. We believe we can help the Kingdom not just meet its 2030 goal, but I think they can do it sooner, and we want to be a part of that story,” he said.
Emphasizing the critical role of cloud technology in driving digital transformation, particularly in the context of AI, Walia asserted that cloud infrastructure is essential for enabling these technological developments.
He highlighted the importance of data management, stating that high-quality data is crucial for achieving accurate results in AI applications.
The company is set to open its first-ever office in the Kingdom in the coming months, reinforcing its presence in the region.
The CEO expressed confidence that Informatica’s development in Saudi Arabia would surpass its growth in any other region, particularly compared to its European expansion.
“My belief is that our growth in the Kingdom will be far, far faster than in any other region on the European continent that we’ve had. My firm belief is that, and we’re investing accordingly,” Walia said.
During the interview, Walia noted that the company collaborated with Google Cloud to establish a regional data delivery infrastructure, ensuring security.
He further explained that partnerships with global system integrators and local agencies aim to standardize governance and privacy practices across the country.
“It’s a very deep partnership. We’ve been working with Google Cloud from its very early days. And our goal here in the Kingdom is to make sure that all of our cloud platforms for data management are available locally,” Walia said.
He continued: “Expect us to be talking about that a lot more in the coming months and weeks, to be the backbone of all things related to good and secure data management for the Kingdom.”
He concluded the interview by underscoring the importance of data management in the era of AI-driven advancements. Walia emphasized that while AI is powerful, it only generates value when paired with high-quality data.
“The AI does not deliver any value. AI only delivers value if it has good data paired with it. And data can only become good; data by itself is not good. It’s of poor quality and fragmented. Data becomes good when you manage it. That’s data management. That’s what we do,” he said.
Walia added, “Informatica has been doing data management for 30 years. We’ve been the number one company that does that at scale. Our platform runs 92 trillion transactions a month and grows 100 percent every year.”
In April, Informatica launched its AI-powered Intelligent Data Management Cloud platform in Saudi Arabia, representing a groundbreaking move for the Kingdom.
This initiative involved setting up a new point of delivery in Riyadh on Google Cloud, allowing the company to enhance support for local partners and organizations with its cloud data management platform in accordance with local regulations.
Rapid rollout of clean technologies makes energy cheaper: IEA
RIYADH: The rapid adoption of clean technologies can enhance the affordability of energy, according to a new report.
In its latest study, the International Energy Agency said that the key task for governments globally is to make clean energy technologies more accessible to those who may otherwise struggle with the upfront costs.
The energy agency noted that additional investments in the sector are needed to meet net-zero goals by 2050.
“The report shows how putting the world on track to meet net-zero emissions by 2050 requires additional investment but also reduces the operating costs of the global energy system by more than half over the next decade compared with a trajectory based on today’s policy settings. The net result is a more affordable and fairer energy system for consumers,” said the energy think tank.
Clean technologies are cost-competitive
According to IEA, clean energy technologies are already more cost-competitive over their lifespans than those reliant on conventional fuels like coal, natural gas, and oil, with solar photovoltaic and wind the cheapest options for power generation.
“In 2023, more than 95 percent of new utility-scale solar photovoltaic installations and new onshore wind capacity had lower generation costs than new coal and natural gas plants,” said the energy agency.
It added: ‘Solar PV module prices are now exceptionally low – they declined by 30 percent in 2023 – creating affordable openings for everything from utility-scale projects to home solar systems, with their value enhanced by cheaper batteries.”
The analysis highlighted that electric vehicles, although expensive compared to their traditional counterparts, will be cost-effective in the long run due to their low maintenance prices.
“Even when electric vehicles, including two-and three-wheelers, have higher upfront costs, which is not always the case, they typically result in savings due to lower operating expenses. Energy efficient appliances such as air conditioners provide similar cost benefits over their lifetimes,” noted IEA.
Clean energy transition dependent on upfront investments
The energy think tank further pointed out that a clean energy transition hinges on unlocking higher levels of upfront investment, specifically in developing economies.
According to the report, clean energy investments are lagging in emerging economies due to actual or perceived risks that hinder new projects and access to finance.
“Moreover, distortions in the present global energy system in the form of fossil fuel subsidies favor incumbent fuels, making investments in clean energy transitions more challenging,” said IEA.
It added: “Governments worldwide collectively spent around $620 billion in 2023 subsidizing the use of fossil fuels – far more than the $70 billion that was spent on support for consumer-facing clean energy investments.”
How clean energy technologies benefit customers
According to the analysis, the benefits of a faster energy transition and growing shares of renewables such as solar and wind power will help end customers, as clean technologies are less volatile than oil product prices.
IEA added that electricity is expected to overtake oil as the leading fuel source in final consumption by 2035.
“The data makes it clear that the quicker you move on clean energy transitions, the more cost-effective it is for governments, businesses, and households,” said Fatih Birol, executive director of the IEA.
He added: “If policymakers and industry leaders put off action and spending today, we will all end up paying more tomorrow. The first-of-a-kind global analysis in our new report shows that the way to make energy more affordable for more people is to speed up transitions, not slow them down. But much more needs to be done to help poorer households, communities and countries to get a foothold in the new clean energy economy.”
Policy intervention crucial to quicken energy transition
The energy agency further noted that incentives and greater support, mainly targeted at more disadvantaged households, can improve the uptake of clean energy technologies in the coming years.
According to IEA, incentivizing clean energy technologies will help consumers fully reap the benefits of these renewables and the cost savings, along with supporting efforts to reach international energy and climate goals.
The report suggested additional measures governments can take to accelerate the use of clean technologies, including delivering energy efficiency retrofit programs to low-income households, obliging utilities to fund more efficient heating and cooling packages, and providing affordable green transport options.
“Policy intervention will be crucial to address the stark inequalities that already exist in the current energy system, where affordable and sustainable energy technologies are out of reach for many people,” said IEA.
The release added: “The most fundamental inequities are faced by the almost 750 million people in emerging and developing economies who lack access to electricity, and the more than 2 billion people without clean cooking technologies and fuels.”
However, the energy think tank warned that the risk of price shocks does not disappear in clean energy transitions, and governments should continue to be vigilant about new dangers that could affect energy security and affordability.
According to IEA, geopolitical tensions remain significant potential drivers of volatility, both in traditional fuels and, more indirectly, in clean energy supply chains.
Furthermore, the shift to a more electrified energy system could bring a new set of hazards into play that are more local and regional, especially if investments in grids, flexibility, and demand response fall behind.
“Power systems are vulnerable to an increase in extreme weather events and cyberattacks, making adequate investments in resilience and digital security crucial,” IEA concluded.
In an additional report released in May, the agency revealed that ensuring a reliable and diversified supply of energy transition minerals is crucial to achieving net-zero targets.
The study also noted that the market size of key energy transition minerals is expected to double by 2040, reaching $770 billion.
Aramco completes acquisition of 40% stake in Gas & Oil Pakistan
RIYADH: Energy giant Saudi Aramco has completed the acquisition of a 40 percent equity stake in Gas & Oil Pakistan as the company continues its global retail expansion.
The acquisition, first announced in December 2023, represents Aramco’s first downstream retail investment in Pakistan and signals the firm’s growing presence in high-value markets, the company said in a press statement.
“Our global retail expansion is gaining pace and this acquisition is an important next step on our journey. Through our strategic partnership with GO, we look forward to supplying Aramco’s high-quality products and services to valued customers in Pakistan,” said Yasser Mufti, executive vice president of products and customers at Saudi Aramco.
He added: “We are also delighted to welcome another high-caliber addition to Aramco’s growing network of global partners, and look forward to combining our resources and expertise to unlock new opportunities and further grow the Aramco brand overseas.”
In March, Saudi Aramco acquired a 100 percent equity stake in Esmax Distribucion SpA, a leading diversified downstream fuels and lubricants retailer in Chile.
On May 30, the energy giant said that it plans to sell 1.545 billion shares worth more than $10 billion.
In a statement, the company announced a “secondary public offering of 1.545 billion shares,” with an expected price range between SR26.70 and SR29 ($7 to $7.70).
The sale on the Saudi stock exchange, which represents approximately 0.64 percent of the company’s issued shares, will commence on June 2.
On May 12, Saudi Aramco revealed that its net profit for the first quarter of this year reached $27.27 billion, representing a rise of 2.04 percent compared to the last three months of 2023.
According to a statement, the oil firm’s total revenue for the three months to the end of March stood at $107.21 billion, with the total operating income reaching $58.88 billion.
In April, a report released by Brand Finance revealed that Saudi Aramco has maintained its position as the Middle East’s most valuable brand, with a value of $41.5 billion.
According to the analysis, the energy giant continued to dominate the region despite an 8 percent drop in value, driven by a fall in crude oil prices and lower sales volumes.
