Exxon to cut expenses
Exxon Mobil Corp is notifying contractors and vendors of planned near-term cuts in capital and operating expenses over the COVID-19 pandemic, and would announce the plans once they are final, company spokesman Jeremy Eikenberry said on Sunday. Exxon on Saturday reduced production at its refinery in Baton Rouge, Louisiana, and cut 1,800 contract workers on Friday, sources said. The company is also expected to delay a US$30 billion liquified natural gas plant in Mozambique.
Shell to slash costs
Royal Dutch Shell PLC yesterday said that it would cut costs and capital expenditure by billions of US dollars due to the worsening coronavirus pandemic, which has sparked an oil price collapse. The Anglo-Dutch energy major announced in a statement that it would lower operating costs by US$3 billion to US$4 billion over the next 12 months, and would reduce its annual spending to US$20 billion from US$25 billion.
Vinci targets out of reach
French construction and concessions group Vinci SA yesterday said that it would not be able to meet its targets for this year as the COVID-19 outbreak has significantly affected its activities. The company also said in a statement that it was not possible at this stage to estimate the effect of the health crisis on its financial statements given uncertainty about the duration and the scale of the pandemic. Vinci expects a pronounced but time-limited decline in revenue.
Primark shuttering all stores
Primark is closing all of its stores, a loss of about ￡650 million (US$756 million) worth of net sales a month, and would stop placing new orders with suppliers, its parent company said yesterday as the coronavirus outbreak worsens. Associated British Foods PLC said that the clothing retailer, which accounts for about half of the group’s revenue and profit, has shut all of its 376 outlets in 12 countries until further notice. AB Foods said it has not seen a material impact on its sugar, grocery, ingredients and agriculture operations.
GDP to slow to 2%: analysts
Malaysia’s economy is set to grow at its slowest pace since the 2009 financial crisis as it struggles with a trio of troubles: COVID-19, an oil-price crash and political upheaval. Analysts from Fitch Ratings to United Overseas Bank Ltd (大華銀行) expect Malaysia’s economy to grow about 2 percent this year. That compares with the government’s estimate that GDP would expand 3.6 to 4 percent, which already accounts for the effects of the virus. The central bank is set to release its annual report on the economy tomorrow, where it is expected to revise its outlook.
Worse recession forecast
Morgan Stanley and Goldman Sachs Group Inc said that COVID-19 would inflict greater economic pain than they previously expected as they warned of a record plunge in US output in the second quarter and a deeper global recession. Morgan Stanley on Sunday forecast that the US’ GDP would fall 30.1 percent in the April-to-June quarter. Goldman predicted that the world economy would contract about 1 percent this year, which would be a bigger decline than even that witnessed in 2009 amid the financial crisis. Goldman had already projected a 24 percent drop in US output in the next quarter.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
DEVELOPING TALENT: The electronics contractor is looking to recruit people to work in core tech fields and emerging industries like electric cars and robotics Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has launched a recruitment drive, offering a monthly salary of no less than NT$45,000 (US$1,485) to university graduates. For those with a master’s degree, the starting pay would be NT$52,000 per month at the minimum, while doctorate degree holders would receive at least NT$60,000 a month, Hon Hai said a statement issued early this week. The latest recruitment drive is aimed at attracting talent in core technology fields — artificial intelligence, semiconductors and next-generation mobile communications — and emerging industries — electric vehicles, digital healthcare and robotics, the