AVIATION
Cathay Pacific’s profits soar
Cathay Pacific said net profit almost doubled last year as tumbling oil prices slashed fuel costs and boosted passenger numbers, although global demand dented the cargo unit. With fuel accounting for a huge chunk of most airlines’ outlay, the slump in crude since mid-2014 has provided a much-needed boost to their bottom lines. Cathay reported a net profit of HK$6 billion (US$773 million) last year, up 90 percent from HK$3.15 billion for 2014 and beating an average forecast of HK$5.32 billion in a Bloomberg survey. Cathay said it and subsidiary Dragonair Airlines Ltd (港龍航空) had seen their fuel costs sink 37.8 percent, although that was partly offset by huge losses in its hedging exposure — when an airline locks in prices at a pre-determined level for a certain amount of time.
RETAIL
Inditex net income up 15%
Inditex SA, the world’s largest clothing retailer, reported its fastest annual profit growth in three years fueled by online sales and the Zara chain, which offers US$19.90 flared dresses and US$29.90 leather sandals. Net income rose 15 percent to 2.88 billion euros (US$3.2 billion) in the period through January, the owner of the Zara and Massimo Dutti brands yesterday said in a statement. Analysts expected 2.9 billion euros, according to the average estimate. Revenue gained 15 percent in the start of this quarter on an adjusted basis, maintaining last year’s growth rate. The Spanish retailer, which has more than 7,000 outlets, aims to increase retail space 6 percent to 8 percent in coming years, below a previous target of 8 percent to 10 percent, Inditex said. The operator of the Bershka chain also reported its fastest annual profit growth in three years and maintained revenue growth of 15 percent in the early part of this year.
FRANCE
Weak growth forecast
The central bank said growth this quarter will be weaker than previously anticipated and confidence among manufacturers fell the most in three years. Sentiment among factory executives dropped to 98 last month from 101 in January, its biggest decline since January 2013, according to a monthly survey from the central bank. As a result, the economy will expand 0.3 percent this quarter instead of 0.4 percent, it said yesterday. The drop in confidence is a significant indication that a slowdown in emerging-market economies such as China and Brazil is spilling over into Europe and may threaten the nation’s first real recovery since President Francois Hollande took office in May 2012. The Bank of France’s indices of sentiment in both the service and construction sectors were unchanged at 96 last month.
UNITED KINGDOM
Production rebounds
Industrial production posted a modest rebound in January as manufacturing and energy production jumped. Output climbed 0.3 from December last year, when it declined 1.1 percent, the Office for National Statistics yesterday said in London. Economists had forecast a gain of 0.4 percent. Manufacturing rose 0.7 percent and utilities increased production by 4.3 percent after warmer weather hit heating demand in December. Oil and gas extraction fell 6.3 percent, the most since June 2014, as stormy weather affected North Sea facilities. Purchasing-management surveys this month showed indices of manufacturing and services falling to their lowest levels in almost three years in February.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts