Business

PARIS — French group TotalEnergies on Thursday reported a drop in net profit in the second quarter as oil and gas prices have fallen from the highs they reached following Russia's invasion of Ukraine.

Net profit reached $4.1 billion between April and June, down 28 per cent from the same period last year, the company said.

"In a favourable but softening oil and gas environment TotalEnergies once again delivered this quarter robust results, strong cash flow, and attractive shareholder distribution," Chief Executive Patrick Pouyanne said in an earnings statement.

British oil major Shell and Spain's Repsol also posted drops in profits on Thursday, a day after similar results reported by Norwegian state-owned energy company Equinor.

Gas prices had soared last year after Russia cut gas shipments to Europe while oil markets were also rocked by supply concerns.

But natural gas prices fell sharply as European countries found new suppliers, built up reserves and experienced a mild winter.

Oil prices have also tumbled, partly on fears of falling demand as the global economy slows.

SAN FRANCISCO — Google parent Alphabet on Tuesday reported profits that beat market forecasts as digital advertising revenue revived and its cloud business grew.

The Internet giant reported net income of $18.7 billion on revenue of $74.6 billion in the recently ended quarter.

"There's exciting momentum across our products and the company, which drove strong results this quarter," Alphabet chief executive Sundar Pichai said in an earnings release.

Alphabet shares jumped more than six per cent to $129.88 in after-market trades following the results.

While the latest talk has surrounded artificial intelligence (AI), what matters most for Google earnings currently is digital advertising — where it gets the bulk of its revenue.

The company said that advertising revenue hit $58.1 billion, which outshined market expectations of $57.45 billion set by analysts.

Google is also a player in the cloud computing industry, where revenue came in at $8 billion, compared with $6.3 billion the unit took in during the same period a year earlier.

"Our continued leadership in AI and our excellence in engineering and innovation are driving the next evolution of Search, and improving all our services," Pichai said.

Google has played a close second to the partnership between Microsoft and OpenAI in rolling out its AI products following the release of ChatGPT that ignited a tech frenzy.

The company has largely been seen as playing catch up with Microsoft, with questions over whether the mighty Google search engine will withstand developments in AI.

Microsoft was quick to beef up its Bing search engine with AI powers, but Google's search has yet to see a real threat to its dominance — which remains at about 90 per cent of the market worldwide.

Google, like most big tech companies, has seen its share price rise steeply in 2023 as investors expect AI to generate new revenue and open new markets.

According to the Wall Street Journal, Google co-founder Sergey Brin is back at the company headquarters in California helping teams develop even more AI products.

He and co-founder Larry Page stepped down from active roles at Google in 2019 when Pichai was chosen to replace them as chief executive.

WASHINGTON — The International Monetary Fund (IMF) has slightly upgraded its outlook for global growth this year on the back of resilient service sector activity in the first quarter and a strong labour market, the lender said Tuesday.

But despite the mildly better economic outlook, global growth is expected to slow to 3 per cent this year and then stay there, held down by weak growth among the world's advanced economies, the IMF announced in a new report. 

"We're not out of the woods yet and growth remains on the low side," IMF Chief Economist Pierre-Olivier Gourinchas told AFP in an interview ahead of the report's publication. 

The global growth forecast for this year was raised by 0.2 percentage points from the IMF's last forecast in April, putting the world economy on track for three per cent growth in both 2023 and 2024. 

This is down from global economic growth of 6.3 per cent in 2021, and 3.5 per cent last year, the IMF announced in its update to the World Economic Outlook (WEO). 

The IMF published its lowest medium-term forecast since the 1990s, citing slowing population growth and the end of the era of economic catch-up by several countries including China and South Korea. 

On Tuesday, the IMF said the global inflation picture has improved somewhat, with consumer prices now forecast to increase by 6.8 per cent this year, down 0.2 percentage points from the previous forecast in April. 

This is "largely on account of subdued inflation in China," the IMF said, adding that global inflation remains well above its pre-pandemic levels of around 3.5 per cent.

'Resilient' US consumption 

The IMF has lifted its outlook for US growth this year to 1.8 per cent, up 0.2 percentage points from April, citing "resilient consumption growth in the first quarter".

The still-tight labour market in the world's largest economy "has supported gains in real income and a rebound in vehicle purchases", the IMF said in its report.

The fund sees US growth slipping to 1 per cent next year, as savings accumulated during the pandemic dry up and the economy loses momentum.

"We are cautiously prudent that the US economy could avoid a recession and, you know, glide towards its inflation target without having a recession in its future," Gourinchas told AFP. 

"But it's a very, very narrow path," he added. 

Asian economies still dominate 

As with the April forecast, much of the global growth this year is forecast to come from emerging market and developing economies (EMDEs) like India and China, with economic activity in advanced economies predicted to slow substantially this year and next. 

Advanced economies are now forecast to grow by 1.5 per cent this year, up 0.2 per centage points from April, and by 1.4 per cent in 2024. 

Citing positive recent economic news from the United Kingdom, the IMF has lifted the country's forecast for 2023 growth to 0.4 per cent, leaving Germany as the only G7 economy expected to contract this year.

The news is much more positive among the EMDEs, which are forecast to grow by 4 per cent this year, and by 4.1 per cent next year.

The IMF's 2023 growth forecast for China remained unchanged at 5.2 per cent, although it notes there has been a change in composition due to the underperformance of investment due to the country's troubled real estate sector. 

Alongside weakness in the real estate sector, the IMF said foreign demand remains weak and warned of rising and elevated youth unemployment, which reached almost 21 per cent in May. 

The IMF lifted India's 2023 growth prospects to 6.1 per cent, up 0.2 percentage points from April, citing "momentum from stronger-than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment."

The fund now expects Russia's economy to grow by 1.5 per cent this year, an upward revision of 0.8 per centage points from April, due to stronger-than-expected economic data fueled by "a large fiscal stimulus". 

THE HAGUE — Dutch medical tech firm Philips posted a nine percent jump in second-quarter sales and a return to profit on Monday as it bounces back from a global recall of sleep respirators.

The Amsterdam-based company said sales rose to 4.5 billion euros ($4.9 billion).

It reported a net profit of 74 million euros following a loss of 20 million euros over the same period last year.

"I am pleased with our improved operational performance across all segments and geographies in the quarter," Philips chief executive Roy Jakobs said.

The medical device maker in 2021 announced a major recall of its DreamStation machines for sleep apnoea, a disorder in which breathing stops and starts during sleep.

Users were said to be at risk of inhaling or swallowing pieces of toxic soundproofing foam that could cause irritation or headaches.

Philips also mentioned a "potential" cancer risk in the long term.

But it announced in May that independent tests showed the sleep respirators at the centre of the massive recall were "unlikely" to harm patients.

The replacement of suspected faulty devices has now been almost completed, with "the vast majority" of the sleep devices back with patients and home care providers, Jakobs said.

"We are fully focused on the remediation of the affected ventilators," he said.

The recall hit the 132-year-old company hard and by January it announced it was slashing 10,000 jobs out of a total workforce of just under 80,000 employees around the globe.

To date Philips has cut 6,600 jobs out of the planned total set for 2025, the company said.

Philips has faced a US Department of Justice probe over the respirator issue and was negotiating with US authorities over a financial settlement.

It is also a defendant in several class action lawsuits in the United States and other litigation elsewhere.

While "uncertainties remain", Philips said it expected sales to grow in the mid-single-digits for the rest of the year.

The outlook, however, "excludes the impact" of ongoing litigation and the US investigation, it said.

Philips however seemed unable to temper investor concern over new orders, which declined by 8 per cent year-on-year.

The firm blamed lower figures on a high order intake last year and loss of orders from Russia in the wake of its full-scale invasion of Ukraine.

Its share price fell by around 4.5 per cent in lunchtime trade on the Amsterdam stock exchange's blue chip AEX index, trading at around 19.8 euros a share.

WASHINGTON — Amazon said Friday it will invest $120 million to build a satellite construction facility at NASA's Kennedy Space Center, as part of its plans to launch a space Internet service to rival SpaceX's Starlink.

The company founded by Jeff Bezos says its "Project Kuiper" will provide "fast, affordable broadband to unserved and underserved communities around the world", with a constellation of more than 3,200 satellites in low Earth orbit.

"We have an ambitious plan to begin Project Kuiper's full-scale production launches and early customer pilots next year, and this new facility will play a critical role," said Steve Metayer, vice president of Kuiper Production Operations.

The company has another production facility in Kirkland, Washington, where it will begin operations by the end of this year. 

The units will then be sent to Florida to carry out final preparations, and integrate them with rockets from Blue Origin — also founded by Bezos — and United Launch Alliance ahead of launch.

Elon Musk's SpaceX launched the first batch of its more than 3,700 operational Starlink satellites in 2019 and is by far the biggest player. London-headquartered OneWeb is another early entrant in the emerging sector.

But governments are also keen to join the rush.

China plans to launch 13,000 satellites as part of its GuoWang constellation, while Canada's Telesat will add 300 and German start-up Rivada is eyeing 600.

That will be in addition to the European Union's Iris project — 170 satellites — and the 300-500 satellites planned to be launched by the US military's Space Development Agency.

RIYADH — Saudi Arabia on Thursday said it will give Tunisia financial assistance valued at $500 million, including a $100 million grant, as the North African country grapples with crippling inflation and debt.

The announcement carried by the official Saudi Press Agency followed a visit by Tunisia's Foreign Minister Nabil Ammar as part of a Gulf tour this week aimed at drumming up financial support.

Ammar also made stops in Kuwait and the United Arab Emirates.

"The Kingdom offers a soft loan and grant to the Republic of Tunisia in the amount of $500 million," SPA said, without providing additional details.

The financial assistance consists of a $400 million soft loan and a $100 million grant, Riyadh's ambassador to Tunis, Abdel Aziz al-Saqer, told Saudi-owned Al Arabiya television on Thursday.

Saudi Finance Minister Mohammed Al Jadaan signed the deal for the assistance alongside his Tunisian counterpart Sihem Boughdiri during a visit to Tunis, SPA reported.

Jadaan announced "further meetings in the coming weeks to provide additional support from the Saudi Development Fund and other development funds from Gulf countries", according to a video released by the Tunisian presidency after the Saudi minister also met President Kais Saied.

Tunisia is struggling under crippling inflation and debt estimated at around 80 per cent of its gross domestic product.

Last October, the North African country reached an agreement in principle with the International Monetary Fund (IMF) for nearly $2 billion, but discussions have since stalled.

Saied, who has assumed near total governing powers since July 2021, has repeatedly rejected what he calls the "diktats" of the IMF before a loan is granted.

On Sunday, he reiterated his rejection of IMF demands to lift subsidies on basic products and services, namely oil and electricity, as well as the restructuring of 100 state-owned firms.

HSINCHU — AI will be the "defining mega-trend" for the global computing industry, the head of chip giant AMD said on Thursday in Taiwan, where the majority of the world's semiconductors powering the technology is produced. 

California-based Advanced Micro Devices (AMD) is one of the world's largest chip suppliers — rivalling giants Intel and Nvidia — and their processors are used in everything from gaming consoles and laptops to massive servers. 

In the past year, tech companies have shifted resources to developing chips that have the processing power for generative AI — which churns out complex content in seconds — after seeing the popularity of products such as ChatGPT. 

"The innovation opportunities ahead of us are truly enormous and the computing industry is changing very fast," said AMD's CEO Lisa Su, in Taiwan to receive an honourary doctorate from a university in the city of Hsinchu. 

"AI is really the defining megatrend for the next 10 years," she said, adding that generative AI has reshaped how industry players think about tech's possibilities. 

"Every product, every service, every business in the world will be impacted by AI, and the technology is actually evolving faster than anything than I've ever seen before," Su said in her speech to the university. 

As a chip design foundry, AMD outsources the production of their microchip designs to Taiwan Semiconductor Manufacturing Company (TSMC), which is headquartered in Hsinchu. 

The Taiwanese chipmaking giant controls half the world's output of the silicon wafers, which are used to power everything from drip coffee machines to cars and missiles.

Unlike the AMD chief, TSMC's Chairman Mark Liu cautioned investors on pinning their expectations of a boom in chips due to generative AI. 

"The short-term frenzy about AI demand definitely cannot be extrapolated for the long term," Liu told shareholders in a conference call Thursday — held around the same time as the university ceremony Su attended. 

"Neither can we predict for the near future, meaning next year, how the sudden demand will continue or flatten out."

TSMC reported a 23 per cent drop in its second quarter net income to about $5.85 billion.

"Our second quarter business was impacted by the overall global economic conditions, which dampened the end market demand, and led to customers' ongoing inventory adjustment," said Wendell Huang, TSMC's VP and chief financial officer.

The company also announced that its long-awaited Arizona plant — the first in the United States — has met delays, due to "an insufficient amount of skilled workers", and the start of production will be pushed to 2025, Liu said.

DUBAI — Turkey's President Recep Tayyip Erdogan has arrived in the United Arab Emirates, the final leg of a Gulf trip aimed at drumming up investments, Emirati state media said on Wednesday.

The tour included stops in Qatar and Saudi Arabia and saw Erdogan preside over the signing of lucrative deals to boost the ailing Turkish economy.

"Erdogan has arrived in the UAE on an official visit, accompanied by Turkiye's First Lady Emine Erdogan," the UAE's official WAM news agency said early Wednesday, using an alternate spelling for Turkey.

WAM released footage of Erdogan and his wife disembarking from a presidential plane in the UAE capital Abu Dhabi, where they were greeted by Emirati officials.

The Turkish leader flew in from Qatar, where he met with ruler Sheikh Tamim Bin Hamad Al Thani.

Earlier, during Erdogan's stop in Saudi Arabia, Riyadh signed a major drone procurement contract with a Turkish defence firm.

The trip comes as Turkey battles a currency collapse and soaring inflation that have battered its economy.

Ankara has recently repaired relations with Gulf states including the UAE and Saudi Arabia after years of rivalry following the 2011 Arab Spring uprisings.

Turkish support for organisations linked to the Muslim Brotherhood initially spurred a rupture with Gulf states, which view the movement as a terrorist group.

Relations soured further following a Saudi-led blockade of Turkish ally Qatar by its Gulf Arab neighbours. The embargo was lifted in 2021 but ties with Turkey remained rocky.

With relations on the mend, Erdogan visited the UAE last year to bolster political and economic ties.

Last month, the UAE's president, Sheikh Mohamed Bin Zayed Al Nahyan, met with Erdogan in Turkey shortly after May polls saw the Turkish leader clinch another five-year term.

Turkish Vice President Cevdet Yilmaz also met with the Emirati president during a June visit to the UAE.

The diplomatic thaw with the UAE has resulted in increased investment in Turkey.

In March, Turkey and the UAE signed a free trade agreement that aims to increase bilateral commerce to $40 billion annually within five years.

Last year, the two countries signed a nearly $5 billion currency swap deal to boost Ankara's dilapidated foreign currency reserves.