MILAN: Italian oil contractor Saipem will cut 800 more jobs across Europe in the next four years as part of a plan to cope with a prolonged market crisis that will trim revenues next year.
Oil service companies around the world are finding business tough as weak crude prices force oil majors to cut billions of dollars in costs.
"The outlook remains uncertain ... meaningful market recovery is now delayed to 2017 and beyond," Saipem CEO Stefano Cao said in a conference call on third quarter results and a business plan to 2020.
Saipem, controlled by oil major Eni and state-backed fund Fondo Strategico Italiano (FSI), expects sales to be around 10 billion euros ($11 billion) in 2017 from some 10.5 billion euros this year.
Net profit, including reorganisation costs, will be more than 200 million euros next year from an adjusted net profit of 250 million euros this year.
The contractor, which last year announced job cuts of 8,800 in a business overhaul, posted a loss of 1.978 billion euros in the third quarter after asset writedowns and impairments.
Adjusted net profit in the period was 60 million euros, just below a Thomson Reuters consensus of 66 million euros.
As oil service companies compete for a dwindling number of contracts, some investors are concerned returns will suffer without further cost cuts or disposals.
Saipem, which is targeting cost cuts of 1.7 billion euros, completed a 3.5 billion euro rights issue earlier this year to boost its capital and fund operations.
Saipem cuts 800 more jobs as crisis drags on
Saipem cuts 800 more jobs as crisis drags on
Dubai Financial Services Authority sees 40% surge in new license registrations, CEO reveals
RIYADH: New license registrations through the Dubai Financial Services Authority increased by 40 percent in the first months of this year compared to the same period in 2023.
The organization’s CEO, Ian Johnston, confirmed the issuance growth to the Emirates News Agency on the sidelines of the 2nd edition of the Dubai Financial Technology Summit.
Johnston stated that 2024 is poised to be the most dynamic year yet for new license issuances, building on the momentum achieved in the past two years.
He added that this period will witness an abundance of new licensing activities, encompassing startups in the financial technology sector, as well as major corporations and international banks continuing to converge toward the Dubai International Financial Centre.
DIFC, a hub in the Middle East, Africa, and South Asia region, connects the area’s fast-growing markets with global economies and offers dining, retail, and living amenities, according to its website.
The CEO anticipated receiving over 100 applications from companies, with between 130 and 140 new businesses slated for licensing in the DIFC, reflecting the pace of growth, according to WAM.
He emphasized that the base serves as the primary international financial destination in the region, contributing to Dubai’s strategy to enhance its position as a global financial center in the Middle East.
He stated: “We are not only witnessing an increase in the number of companies we license, but also witnessing the success of these companies in the DIFC, facilitating individuals in conducting their business, as well as facilitating the conclusion of deals.”
Johnston emphasized Nasdaq’s role in Dubai’s global bond and sukuk listing hub, noting it as the world’s largest sustainable sukuk market, with over 60 percent in US dollars tied to environmental, social, and governance criteria, and around 50 percent across all currencies linked to governance and social responsibility.
He noted that Nasdaq Dubai has become the leading venue for listing environmental, social, and governance sukuk, demonstrating the increasing interest in sustainable investments and Nasdaq Dubai’s position as a preferred platform for such issuances.
Johnston anticipated that the DIFC would continue to experience further growth and activity in the current year, owing to Dubai’s established status as a regional financial center, highlighting that the center accommodates over 40,000 professionals, in addition to those working in finance outside the center.
The CEO indicated that Dubai is poised to emerge as one of the top four to five global financial centers in the coming years, stating: “We are already working toward achieving that as soon as possible.”
He stressed the Dubai Financial Services Authority’s goal to promote innovation by backing the fintech sector within regulations. This aligns with companies’ move toward regulatory compliance and proactive adoption of guidelines for stability and sustainable growth.
The authority had announced earlier in January that it had an exceptional growth year in 2023, saying in a press release: “The region’s leading regulator licensed and registered a record-breaking 117 firms during the 12-month period, an increase of 25 percent from the previous year.”
Johnston explained that regarding rules and governance, one of the positive developments occurring now is that financial technology operators are beginning to understand the regulatory process, and the task as regulators is to ensure that they impose directives to protect investors.
DIFC had recorded its highest gross written premiums in its 20-year history, amounting to $2.6 billion in 2023, marking a 23 percent increase from the previous year.
The center also recorded a 20 percent rise in the registration of insurance and reinsurance firms, including the first move of a Guernsey-based captive.
Saudi-Malaysian economic ties strengthen with launch of business council
RIYADH: Economic ties between Saudi Arabia and Malaysia are set to soar with the launch of a business council aimed at catalyzing growth and collaboration across various sectors.
The council was inaugurated during the visit of Saudi Minister of Commerce Majed bin Abdullah Al-Qasabi, who led a delegation comprising 44 officials and leaders representing 20 government bodies and 24 private sector entities to the Southeast Asian country.
The minister announced the establishment of the business council, emphasizing its goal of enhancing economic relations between the two countries.
“We inaugurated today with the Minister of Investment, Trade and Industry, Tengku Zafrul Aziz the Saudi-Malaysian Business Council to contribute to strengthening economic and trade relations in the promising sectors in the two brotherly countries,” Al-Qasabi said in a post on his X account on May 6.
The Saudi minister further held a roundtable meeting with Aziz, attended by Sulaiman Mahbob, chairman of the Malaysian Investment Development Authority, and Dato Seri Reezal, chairman of the Malaysia External Trade Development Corp., along with Shaharul Sadri Alwi, director general of the Department of Standards Malaysia.
Al-Qasabi pointed out that the talks with Malaysian officials revolved around enhancing partnerships within the business sectors of both nations.
Concluding his visit to the Southeast Asian country, the commerce minister mentioned that he had also held meetings with Ewon Benedick, minister of entrepreneurship development; Mohamad Sabu, minister of agriculture and food industry; and Alexander Nanta Linggi, minister of works.
“We discussed cooperation in the areas of training, knowledge transfer, innovation, and sustainability, while also reviewing Malaysia’s experience in supporting small and medium-sized projects,” Al-Qasabi said.
During the meetings, efforts to encourage exports and enhance the capabilities of Saudi and Malaysian companies to access global markets were discussed, the Saudi Press Agency reported.
It added that collaboration in capacity building in innovation, emerging technologies, research programs, and e-commerce was emphasized.
Al-Qasabi affirmed that Saudi Arabia’s Vision 2030, launched by Crown Prince Mohammed bin Salman, has brought about significant transformations in the Saudi economy since its announcement in 2016.
He noted the close trade relations between Saudi Arabia and Malaysia, highlighting significant opportunities for expansion and diversification. The minister emphasized Saudi Arabia’s efforts to become a global hub for trade and logistics services.
In conjunction with the Saudi delegation’s visit to Malaysia, representatives from the Federation of Saudi Chambers, led by Secretary-General Waleed Al-Orainan, participated in the meeting aimed at exploring investment opportunities in both countries.
The meeting concluded with the signing of significant partnership and investment agreements between the two sides.
Al-Orainan and the President of the National Chamber of Commerce of Malaysia, Tan Datu, signed an agreement to enhance economic cooperation.
Moreover, private sector companies from both countries held bilateral meetings and signed trade and investment partnership agreements in multiple sectors.
PIF’s Egyptian investment arm set to acquire shares in education-focused Social Impact Capital
RIYADH: Egypt’s Social Impact Capital is set to receive a significant financial boost as it announced a conditional agreement with the Saudi Egyptian Investment Co.
Under the terms of the deal, SEIC will subscribe for new shares in SIC, the principal shareholder of CIRA Education, which is listed on the Egyptian Stock Exchange.
This financial arrangement is designed to facilitate SIC’s acquisition of additional shares in CIRA, potentially increasing SIC’s total shareholding to between 75 percent and 100 percent at a price of 14 Egyptian pounds ($0.29) per share.
This move aims to delist CIRA from the Egyptian exchange and transform it into a major regional player in the education sector.
SEIC, wholly owned by the Saudi Public Investment Fund, will play a crucial role in enhancing CIRA’s market position. As one of the largest fully integrated education service providers in Egypt’s private sector, CIRA stands to benefit significantly from this partnership.
The completion of this conditional agreement is contingent upon successful due diligence, securing applicable regulatory approvals, and the execution of definitive agreements.
Following these steps, the SIC-SEIC consortium plans to extend a mandatory tender offer to CIRA’s other shareholders on the Egyptian stock exchange in line with existing laws and regulations.
CIRA’s initial public offering was in 2018 at a market value of 1.2 billion Egyptian pounds.
According to several reports, the company’s IPO saw selling shareholders SIC alongside other minority reserve holders offer of 207.26 million shares, or 37.8 percent of CIRA, to institutional and retail investors at a price of 6 Egyptian pounds per share.
Moreover, SEIC has been a major investor in Egyptian companies.
In 2023, the investment entity acquired a 25.01 percent stake in state-owned fintech giant e-Finance.
This comes as SEIC acquired an initial 25 percent stake in the fintech company in 2022, making it e-Finance’s largest shareholder.
Also in 2022, SEIC acquired minority stakes in three other Egyptian state-owned companies with a total investment of $1.3 billion.
The three other companies are Abu Qir Fertilisers and Chemical Industries, Misr Fertilisers Production Co., and Alexandria Container and Cargo Handling.
Oil Updates – prices climb after Israel strikes Gaza, truce talks continue
SINGAPORE: Oil prices edged higher on Tuesday after Israel struck Rafah in Gaza, while negotiations for a ceasefire with Hamas continued without resolution, according to Reuters.
Brent crude futures were up 9 cents, or 0.11 percent, at $83.42 per barrel at 9:35 a.m. Saudi time, while US West Texas Intermediate crude futures rose 7 cents, or 0.09 percent, to $78.55 a barrel.
“Oil prices opened up this morning, with some roadblocks in the ceasefire talks between Israel and Hamas leading market participants to price for geopolitical tensions to potentially drag for longer,” said Yeap Jun Rong, market strategist at IG.
Market participants will be looking ahead to upcoming US crude inventories data releases, Yeap added.
US crude oil and product stockpiles were expected to have fallen last week, a preliminary Reuters poll showed on Monday. The crude inventories could have on average fallen by about 1.2 million barrels in the week to May 3, based on analyst forecasts.
During the session, a stronger dollar capped gains in oil futures as it makes crude more expensive for traders holding other currencies. The dollar index, which measures the greenback against six major peers, was last up at 105.25.
Oil prices had settled higher on Monday, partially reversing last week’s declines. Both contracts had posted the steepest weekly losses in three months as the market focused on weak US jobs data and the possible timing of a Federal Reserve interest rate cut.
Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and pressed ahead with strikes in Rafah while planning to continue negotiations on a deal.
Israeli forces struck Rafah on Gaza’s southern edge from the air and ground and ordered residents to leave parts of the city, which has been a refuge for more than 1 million displaced Palestinians.
The absence of a settlement between the parties in the now seven-month long conflict has supported oil prices, as investors worry regional escalation of the war will disrupt Middle Eastern crude supplies.
Saudi Arabia’s move to raise the official selling prices for its crude sold to Asia, Northwest Europe and the Mediterranean in June also supported prices, signalling expectations of strong demand this summer.
The world’s top exporter hiked its flagship Arab Light crude oil price to Asia to $2.90 a barrel above the Oman/Dubai average in June, the highest since January and at the upper end of traders’ expectations in a Reuters survey.
Saudi Aramco’s net profit hits $27.27bn in Q1
RIYADH: Energy giant Saudi Aramco reported a net profit of $27.27 billion in the first three months of this year, marking a 2.04 percent increase compared to the previous quarter.
According to the company’s statement, the state-owned oil firm’s total revenue for the the three months to the end of March stood at $107.21 billion, with the total operating income for the period reaching $58.88 billion.
Amin Nasser, president and CEO of Saudi Aramco, said: “Our first quarter performance reflects the resilience and strength of Aramco, reinforcing our position as a leading supplier of energy to economies, to industries and to people worldwide.”
However, when compared with the first quarter of the previous year, the net profit of the Tadawul-listed firm declined by 14.44 percent by the end of March 2024.
Despite lower net income, Aramco declared a base dividend of $20.3 billion for the first three months of the year and anticipates distributing its fourth performance-linked dividend of $10.8 billion in the second quarter.
The statement added that the company expects total dividends of $124.3 billion to be declared in 2024, comprising a base dividend of $81.2 billion and a performance-linked dividend of $43.1 billion.
Nasser revealed that Saudi Aramco made significant progress in its gas business during the first quarter.
“We also continue to execute our long-term strategy, and in the first quarter made significant progress on expanding our gas business and growing our globally-integrated downstream value chain, while maintaining our focus on consistently delivering value for our shareholder,” he added.
In February, the energy giant discovered an additional 15 trillion standard cubic feet of gas and 2 billion barrels of condensate in the Kingdom’s Jafurah Field.
Additionally, the statement noted that Saudi Aramco awarded $7.7 billion worth of engineering, procurement, and construction contracts for the expansion of the Fadhili Gas Plant, aiming to increase its processing capacity by 1.5 billion standard cubic feet per day.
Moreover, Aramco completed the acquisition of a 100 percent equity stake in Chilean retailer Esmax in the third quarter of 2023, bolstering the company's downstream expansion efforts.
“Looking ahead, I expect our portfolio to continue to evolve as we aim to contribute to an energy transition that offers solutions to climate challenges, but at the same time recognizes the need for affordable, reliable, and flexible energy supplies,” added Nasser.
The statement further added that Saudi Aramco is well-positioned to help meet the world’s growing need for affordable and reliable energy, emphasizing that oil and gas will continue to play a significant role in the global energy mix.
Additionally, the company noted that it achieved a total hydrocarbon production of 12.4 million barrels of oil equivalent in the first quarter of this year.
Highlighting Aramco’s commitment to sustainability, the energy giant announced its intention to ramp up its utilization of renewable energy sources, aiming to invest in up to 12 gigawatts of solar photovoltaic and wind projects by 2030.
In January, the Sudair Solar PV Plant, one of the largest solar installations in the region boasting a capacity of 1.5 GW, achieved full-capacity operation. This project is a joint venture between Aramco, Saudi Arabia’s sovereign wealth fund, and utility developer ACWA Power.
