Business
Ford Posts Profit After Debt Reduction Promises To Break Even 2011
Ford Motor posted a $2.3 billion quarterly net profit, mainly due to gains from a $10 billion debt-reduction plan, and said it was on track to at least break even in 2011, sending its shares up 10 percent.
Ford posted an operating loss for the quarter that was better than analysts expected, excluding a net gain of $2.8 billion from one-time items that included the debt-reduction actions, despite reeling global markets that helped push US rivals General Motors and Chrysler into bankruptcy.
Ford expects the US economy to start to come back in the third quarter, with further improvement in the fourth quarter and into 2010, but it is “still a very fragile economy,” Chief Executive Alan Mulally said in a conference call.
An overall and North American profit in 2011 would be the first such mark for the US automaker since 2004.
Ford posted a net profit of 69 cents per share for the second quarter, versus a net loss of $2.7 billion, or $3.89 per share, a year earlier.
The loss from continuing operations and excluding one-time items was $638 million, or 21 cents per share. Analysts on average had expected a loss of 50 cents per share on that basis, according to Reuters Estimates.
Revenue fell to $27.2 billion in the quarter, from $38.2 billion a year earlier. Analysts had expected $23.39 billion.
Ford said its auto business burned through $1 billion in cash in the second quarter, an easing from the first quarter’s $3.7 billion outflow. The automaker said it expects cash flow to improve the rest of the year.
“The cash burn is really being wiped off quickly,” said Erich Merkle, president of auto consulting firm Autoconomy.com. “They are well ahead of schedule. I think Ford returning to profitability will be sooner than most expect.”
Ford cut its automotive debt by about $10 billion by completing a series of transactions in early April, and raised $1.6 billion through a public stock offering in May, using proceeds to support funding for a US union retiree healthcare trust. It expects to pursue more balance sheet improvements.
Meanwhile, Ford executives have said the company has sufficient liquidity to complete a turnaround plan, leaving investors focused on cash preservation and debt reduction.
The automotive business ended June with $21.0 billion in cash, compared with $21.3 billion at the end of March. Its debt burden stood at $26.1 billion at the end of June, down from $32.1 billion at the end of March.
The company borrowed $23 billion in 2006, secured by most of its remaining assets, including the Blue Oval logo, to support a multilayered restructuring and now carries a far heavier debt burden than post-bankruptcy GM and Chrysler.
Ford posted losses totaling $30 billion from 2006 through 2008 – including a company record of $14.7 billion last year – and reported a $1.43 billion loss in the first quarter.
The Dearborn, Michigan-based automaker has been navigating a US downturn now in its fourth year with industry sales reaching their worst levels in three decades. It has not taken emergency US government loans.
Ford’s US sales fell about 33 percent in the first half of 2009, the best result among the top six-selling automakers.
Overall, Ford expects US auto industry sales of 10.5 million to 11 million vehicles in 2009, including medium and heavy duty trucks. Ford’s planning assumptions for 2010 call for US industry sales of 12.5 million vehicles next year.
The automaker is restructuring to operate profitably in a smaller US auto market and to meet an expected increase in consumer preferences for cars over larger SUVs and pickup trucks that drove profits a decade ago.
About 1,000 United Auto Workers-represented hourly employees accepted buyouts or early retirements in its latest offer, leaving Ford with about 47,000 hourly workers, a level it is comfortable with, the automaker said.
In recent weeks, Ford also reached an agreement with the UAW to adjust its funding options for the retiree healthcare trust, known as a Voluntary Employee Beneficiary Association.
The agreement gives Ford the option to make half of its required contributions in stock at the market rate for payments due in 2009, 2010 and 2011, rather than a fixed stock price, making it potentially less dilutive with the shares rising.
The automaker remains in talks with the UAW on other issues to ensure that Ford has a labor cost parity following the concessions the union granted to GM and Chrysler.
The automaker has sold several businesses to raise cash and focus its operations including its Aston Martin, Jaguar and Land Rover brands from its former premier auto group. Ford is also entertaining offers for its Volvo brand.
Booth said Ford was talking to a number of interested parties for Volvo, the Swedish luxury car brand that is the last member left from its premier auto group.
Ford Credit, the automaker’s captive financing arm, reported net income of $413 million in the quarter, up from a $1.4 billion net loss a year earlier.
Ford shares were up 65 cents or 10.2 percent at $7.03 on Thursday on the New York Stock Exchange, a 14-month high.
The Nigerian Content Development and Monitoring Board (NCDMB), in partnership with a firm, Sweetcrude Ltd., has announced detailed selection criteria for the inaugural “Champions of Nigerian Content Awards”, designed to honor outstanding contributions to local content development in Nigeria’s oil and gas sector.
The Tide learnt that the event, scheduled to hold 21st May, 2025, at the NCDMB’S content tower headquarters in Yenagoa, capital of Bayelsa State, will recognize individuals and organizations that have demonstrated exceptional commitment to advancing Nigerian Content in 2024.
The Tide further gathered that the ceremony will coincide with the Nigerian Oil and Gas Opportunity Fair (NOGOF), which promises to spotlighting industry excellence and contributions to national economic transformation.
A statement by the Board’s Directorate of Corporate Communications and Zonal Coordination says the event has 12 Award Categories, which include, “Nigerian Content Icon of the Year”, “Nigerian Content Lifetime Achievement Award”, “Nigerian Content International Upstream Operator of the year”, and the “Nigerian Content Independent Upstream Operator of the year”.
Others are, “Nigerian Content Midstream Operator of the year”, “Nigerian Content Downstream Operator of the year”, “Nigerian Content International Service Company of the year”, Nigerian Content Indigenous Service Company of the year”, and the “Nigerian Content Innovator of the year”.
Also included are, “Nigerian Content Financial Services Provider of the year”, “Nigerian Content Media Organization of the year”, and “Women in Leadership Award for Promoting Gender Equality and Empowerment”.
According to the NCDMB, the criteria for oil and gas operators will include key and empirical benchmarks such as Production output for crude oil and gas volumes, Compliance with Nigerian Content Plans (NCPs) and Nigerian Content Compliance Certificates (NCCCs).
Other criteria are adherence to NOGICD Act reporting requirements, such as submission of Nigerian Content Performance Reports and Employment & Training Plans.
The Board’s statement added that similar criteria will apply to financial institutions, media organizations, and individuals, ensuring a transparent and merit-based selection process.
“Winners for the Nigerian Content Icon of the Year, Innovator of the Year, and Women in Leadership Award will also be selected based on measurable performance indicators.
“The Advisory Committee of Industry Titans will Oversee the process to uphold the prestige of awards. The Committee consist of distinguished experts set up to oversee nominations and validate winners”, the NCDMB said.
Members of the committee, according to the Board, include: Pioneer Executive Secretary of the NCDMB, Dr. Ernest Nwapa; Secretary-General, African Petroleum Producers Organization, Dr. Omar Farouk; and former Zonal Operations Controller, DPR, Mr. Woke Akinyosoye.
The Statement quoted the Executive Secretary, NCDMB, Engr. Felix Omatsola Ogbe, as emphasizing that the awards aim to becoming the oil and gas sector’s equivalent of the Oscars, celebrating genuine impact rather than mere participation.
“This recognition is reserved for those who have gone beyond compliance to drive tangible growth in Nigerian Content.
“With a focus on credibility, compliance, and measurable impact, the Champions of Nigerian Content Awards is poised to set a new standard for excellence in Nigeria’s energy sector”, the NCDMB Executive Scribe said.
By: Ariwera Ibibo-Howells, Yenagoa
Nigeria’s apex Banking institution, Central Bank of Nigeria (CBN), has declared that Federal Government’s debt servicing increased to N696billion in January 2025.
The CBN’s recently published Economic Report revealed a precarious fiscal position, which worsened in January 2025 as debt servicing obligations exceeded total retained revenue by a wide margin.
According to the report, the Federal Government’s debt servicing obligations for the month stood at N696.27bn, while total retained revenue amounted to only N483.47bn, indicating that debt service alone consumed about 144 per cent of all government earnings.
This development highlights the growing debt burden and dwindling fiscal space facing Africa’s largest economy.
According to the report, despite slight improvements in some revenue categories, the retained earnings were grossly inadequate to cover obligatory debt repayments, exposing the government’s continued reliance on borrowing to meet basic obligations.
The report further revealed that retained revenue in January 2025 only recorded a marginal 0.89 per cent increase when compared with the N479.21bn generated in the corresponding month of 2024.
”FGN retained revenue declined in the review period, owing largely to lower receipts from Federal Government Independent Revenue and FGN’s share of exchange gain.
“At N0.48tn, provisional FGN retained revenue was 69.19 and 70.40 per cent below the levels recorded in the preceding period and monthly target, respectively”, it revealed.
While this points to stagnation rather than growth, the marginal rise was wiped out by the overwhelming debt service obligations.
The retained revenue components showed that the Federation Account contributed N167.69bn, while the VAT Pool Account delivered N90.73bn.
By: Corlins Walter
The Federal Government has announced plans to commence the payment of the outstanding N35,000 wage award arrears owed workers in the Federal Civil Service.
A statement issued by the Office of the Accountant-General of the Federation (AGF), which was signed by the Director of Press and Public Relations, Bawa Mokwa, said the outstanding arrears will be paid in instalments, with workers set to receive N35,000 per month for five months.
It clarified that the first tranche of the wage award arrears would be released immediately after the April salary payment.
“The wage award arrears was not paid with the April 2025 salary; it will come immediately after the salary is paid”, the statement read.
The Federal Government had earlier disbursed wage awards to federal workers for five months as part of efforts to cushion the impact of economic reforms. However, five months’ arrears remained unpaid.
The AGF office further reiterated the government’s commitment to fully implementing all policies and agreements relating to staff remuneration and welfare, noting that such efforts were geared towards enhancing productivity and operational efficiency across ministries, departments, and agencies.
The N35,000 wage award was introduced in 2023 as a palliative measure to support workers following the removal of the petrol subsidy and other economic adjustments.
In January this year, the Federal Government assured workers that it would clear the arrears of the N35,000 wage award, just as it also said the government had resumed the payment of the wage award.
The government also reiterated its commitment to addressing issues in the National Minimum Wage agreement reached with the Organised Labour in 2023.
The Minister of Labour and Employment, Nkeiruka Onyejeocha, had disclosed the government’s commitment towards implementing agreements with trade unions during separate meetings with the leadership of the Trade Union Congress and Congress of University Academics, in Abuja.
The Nigeria Labour Congress had criticised the Federal Government over the delay in the payment of the minimum wage for certain workers in the federal civil service.
Also, the Federal Government had earlier blamed the delay in payment on the prolonged approval of the 2025 budget.
By: Corlins Walter