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 Communications Satellite Limited (NIGCOMSAT), the country’s satellite operator, has called for immediate promolgation of policy action that will enable the country to harness the potentials of Artificial Intelligence (AI).
NIGCOMSAT, also warned that Nigeria risks missing out on Africa’s projected $1.2trillion share of the global AI economy by 2030.
Managing Director of NIGCOMSAT, Nkechi Egerton-Idehen, disclosed this in a statement issued at the weekend following her participation in the Meeting of the National Council for Communications, Innovation, and Digital Economy.
“Artificial intelligence is reshaping industries, economies, and societies worldwide, with projections that it will contribute up to $15.7trillion to the global economy by 2030. Africa stands to gain $1.2trillion of this if the right policies and innovations are in place”, Idehen said, citing a PricewaterhouseCoopers report.
The NIGCOMSAT MD underscored the transformative potential of AI in agriculture, highlighting its applicability in Benue State, widely regarded as Nigeria’s “food basket.”
According to her, machine learning tools could revolutionize agricultural practices by improving pest detection and optimizing planting schedules using satellite imagery.
“AI offers us the chance to not only flourish economically but also to achieve food security. However, we must ask ourselves if we are prepared to manage this technology responsibly”, she added.
Idehen also noted that internet access remains a significant barrier to AI adoption in Nigeria.
“For AI tools to be effective, basic digital infrastructure is essential. Addressing this gap must be a priority.
“AI is happening. We have the opportunity to manage this technology revolution responsibly, both in Africa and globally, through innovation and governance”, she said.
In August 2024, the Federal Ministry of Communications, Innovation, and Digital Economy released a draft National Artificial Intelligence Strategy, aiming to position Nigeria as a global leader in AI.
Corlins Walter
The Chairman of Emohua Local Government Council, Chief David Omereji, has said the council has so far spent over N1 billion for the electrification of communities in the area.
Omereji said this while addressing staff of the council at the council headquarters recently.
He said the move was part of his administration’s resolve to ensure peace and development of the LGA.
According to him, the Council spent about N29 million on monthly basis for the maintenance of the Emohua Local Vigilante group known as OSPAC, with each member being paid a stipend of N100, 000 monthly.
He diaclosed that 11 out of the 14 wards are currently enjoying electricity, while efforts are on to light-up the remaining ones.
“I also want to use this opportunity to inform the political class for purposes of records and for the understanding of the people that the Council under my watch have done more than enough”, he said .
The Emolga boss explained that all that have been achieved were through the personal effort of the Council, without support from anybody as rumoured in some quarters.
Omereji further reaveled that a number of other projects, including roads, fencing of schools, hospitals, courts premises, and reconstruction of some abandoned buildings at the Council Headquarters are being undertaken by his administration.
He enjoined the people of the area to support his administration’s drive to bring purposeful development to the LGA.
The Emohua Council boss, who reiterated his hatred for noise making, stated that his works would speak for him, and solicited the support of staff of the council and the entire people of the area.
He noted the fact that some people may not be happy with his achievements, saying that he would remain focused, while advising critics of his government to do so constructively with facts and figures.
King Onunwor
The Movement for the Survival of the Ogoni People (MOSOP) has raised some ethical questions over a Financial and Technical Services Agreement (FTSA) between Sahara Energy and West African Gas Limited (WAGL), an affiliate of the Nigerian National Petroleum Company (NNPC).
MOSOP said the agreement was not done in good faith, not in the interest of the Nigerian people, and did not follow due process.
Foremost Ogoni born activist and MOSOP leader, Fegalo Nsuke, who made this known in Abuja, weekend, described the Sahara-WAGL deal as fraudulent, deceptive and an insult on the intelligence and integrity of the Nigerian nation.
Nsuke called on President Bola Ahmed Tinubu to cancel that FTSA between Sahara Energy and WAGL, noting that the agreement is fraught with irregularities and deceptive.
“What Sahara and the NNPC did in the FTSA between Sahara and WAGL is shameful and depicts high level corruption in public service of our country.
“WAGL is an affiliate of Sahara and the NNPC. How then can Sahara go into an agreement with its own affiliate? It’s as good as going into an agreement with itself. This is deceptive and fraudulent”, Nsuke said.
He continued that “Sahara Energy is certainly not a company the Ogoni people want on their soil and we are calling on Mr. President, Bola Ahmed Tinubu, to terminate any deal between the NNPC and Sahara Energy over OML 11, and to allow for an inclusive arrangement that considers a fair treatment of the Ogoni people in the distribution of revenues from natural resource extraction on Ogoni soil.
“The last Ogoni Congress has been unequivocal on the Ogoni demand for justice and has given a clear path to resolve the three decade old conflict between all critical parties.
“It will be good to explore this path to peace and development for Ogoni and for our country”.
Nsuke accused Sahara Energy and the NNPC of frustrating the progress made by MOSOP to achieve a permanent solution to the Ogoni problem.
He urged a presidential intervention with deep consideration for a fair treatment of the Ogoni people in order to permanently address the problem.
He noted that Sahara Energy should give up on the Ogoni area to allow for an engagement in the interest of the country and the people.
Recall that MOSOP and Sagara Energy have recently been engaged in a row in what MOSOP describes as an unholy relationship between Sahara Energy and the NNPC over OML 11.
MOSOP expressly rejected Sahara Energy and called for a fair treatment of the Ogoni people in natural resource extraction in Ogoni.
It noted that Ogoni people, led by MOSOP, paid the sacrifice to take the oil from Shell, hence “the position of MOSOP must be taken into consideration in decisions relating to resumption of oil production in Ogoni”.