Business

many — German luxury carmaker Mercedes-Benz last week reported a sharp drop in second-quarter net profit on weaker sales of electric vehicles and cooling demand in key market China. 

Net profit fell by 15.9 per cent compared to the same period last year, to just over 3 billion euros ($3.3 billion), the Stuttgart-based group said. 

Group revenues were down nearly four per cent to 36.7 billion euros. 

Mercedes said the auto sector continued to face "a degree of uncertainty" in terms of the global economic outlook, geopolitical events and trade policy. 

The group now expects an adjusted return on sales — a key measure of profitability — in the range of 10-11 per cent in 2024, compared with 10-12 per cent previously. 

Sales of Mercedes cars fell by 3.7 per cent to 496,712 units between April and June, which the group said was partly due to "model changeovers" as customers waited for new models to arrive before buying. 

It also blamed a "subdued market environment" in Asia, with sales in China down six per cent as European car makers grapple with fierce competition from local brands particularly in the electric segment. 

The group's sales of battery-electric vehicles (BEVs) plummeted by 25 per cent in the second quarter, hammered by the growing Chinese competition and softer demand in Europe as governments pare back incentives. 

The "market dynamics" for BEVs in 2024 were weaker than "what most in the industry or industry observers had expected" a few years ago, CEO Ola Kallenius told reporters in a call. 

But "in the face of this uncertainty", Mercedes was nevertheless "in a good position, because we are flexible", he added. 

Mercedes was eyeing a pick-up in overall sales in the second half of the year, Kallenius said, helped by "launches of new models particularly in the top-end segment". 

The group confirmed that it expected full-year revenues to come in at the same level as a year earlier. 

AMMAN – Housing Bank for Trade and Finance (HBTF) Group has announced its financial results for the first six months of 2024, reporting net profits of       JD80.1 million, an increase of 4.4% compared to the same period last year.

Commenting on these results, H.E. Abdul Elah Al-Khatib, Chairman of the Board of Directors, expressed his satisfaction with the positive financial results achieved, emphasizing that the Group’s positive financial outcomesreflect the success of its policies and strategy, characterized by flexibility and modernity, which are based on maintaining the Group’s five-decade legacy of success and achievements.

Al-Khatib added that the Group’s ability to achieve net profits exceeding JD80 million during the first half of theyear confirms the Bank’s success and ability to deal with exceptional circumstances, geopolitical developments, and their repercussions on the economic and service sectors.

From his side, Ammar Al-Safadi, Chief Executive Officer of HBTF Group, uncovered the Group’s key financial indicators for the first half of 2024, which illustrate theGroup’s strong financial position, as well as effective and flexible resource management across various operational sectors, further highlighting its continued achievement of targeted growth in its various operational activities.

Al-Safadi expressed his pride in the Bank’s outstanding performance for the first half of the current year and its ability to record sustainable growth derived from its main operational sectors, which continued to record positive upward performance across its various financial indicators.

Additionally, Al-Safadi noted that the return on equity toshareholders increased to 12.3%, while the return on average assets increased to 1.81% during the first half of the current year. This outstanding performance reflects the Bank’s operational efficiency and successful asset and liability management to deliver the greatest return to theshareholders.

Furthermore, Al-Safadi emphasized that the Group has maintained its prudent risk management approach and precautionary measures to hedge against any potential economic challenges, allocating increased provisions for expected credit losses during the first half of the year.

The recent upgrade of the Bank’s credit rating by international agencies, elaborated Al-Safadi, is an extension of the Bank’s strong financial position and its distinguished performance. It is a testament to its firm commitment to providing the best innovative banking solutions and distinguished services in a flexible and evolvingoperational environment. Al-Safadi explained that raising the Bank’s credit rating is a culmination of its efforts to maintain the rising profitability, supported by a strong capital base and high liquidity ratios, in addition to maintaining high percentages of stable customer deposits. It also reflects the conservative approach adopted by the Bank, which balances additional reserves with assetquality, demonstrating the Bank’s ability to manageeconomic challenges with great flexibility.

During the first half of 2024, the Group’s net credit facilities increased by 5.3% to reach JD4.7 billion as at the end of June 2024. This growth positively impacted the total income, operating profit, and market share of the Bank.

Moreover, the Group continued to strengthen its sources of funds, as customer deposits increased by 3.6% to reachJD5.9 billion by the end of the first half of 2024. The total equity amounted to JD1.3 billion, while the capital adequacy ratio reached 18.6%, which is higher than the minimum regulatory requirements of the Central Bank of Jordan and the Basel Committee on Banking Supervision.

Looking ahead, Al-Safadi assured that the HBTF Groupwill continue to advance its strategy by adopting the latest electronic and digital applications in line with the best banking practices globally, to provide the top banking services to customers and uphold their satisfaction. He reaffirmed the Group’s commitment to staying at the forefront of new developments in the banking industry and what modern technology provides in this field, including what befits the Housing Bank’s position in the Jordanian banking market.

AMMAN — Arab Bank Group reported results for the first half of 2024, with 25 per cent increase in net income after tax reaching $503 million compared with $401 million for the same period last year. The Group maintained its strong capital base with a total equity of $11.5 billion.

According to a statement to the Jordan Times, the bank's assets grew by 5 per cent reaching $68.7 billion and at constant currency, the Group’s loans grew by 8 per cent to reach $38.1 billion, and deposits grew by 6 per cent to reach $50.5 billion.

Chairman of the Board of Directors Sabih Masri said in the statement that the solid financial performance during the first six months underscores the successful execution of the bank’s prudent risk practices, diversified business model and focus on core banking activities. Masri also emphasised the Group’s ability to continue achieving robust performance which reinforces its leading position in the market.

Chief Executive Officer Randa Sadik said that the strong financial results reflect the bank’s robust assets base and strong capitalisation. 

Sadik also highlighted that the bank’s net operating profit grew by 11 per cent driven by core banking activities coupled with controlled operating expenses. 

The bank continues to implement its digital strategy, expanding the offering of innovative digital solutions across the bank’s various business segments, she added.

Sadik also noted that the bank’s balance sheet strength, solid capitalisation, and high liquidity levels have well-positioned the bank for sustainable growth. 

The Group’s loan-to-deposit ratio stood at 75.4 per cent and credit provisions held against non-performing loans continue to exceed 100 per cent, she noted, adding that the Arab Bank Group maintains a strong capital base that is predominantly composed of common equity with a capital adequacy ratio of 17.5 per cent.

Arab Bank has recently received the “Best Bank in the Middle East 2024” award from the New York-based international publication “Global Finance”, for the ninth consecutive year.

CAIRO — Egypt announced on Thursday a 15-per cent increase in petrol prices, part of a reform package requested by the International Monetary Fund (IMF) to proceed with a $5 billion loan to the cash-strapped government. 

The Egyptian petroleum ministry said the price hike would come into effect on Friday. 

The announcement comes ahead of an IMF meeting on Monday to review the April payout package, unlocking $820 million in funds after Cairo received another such tranche of the loan in late June. 

Egypt is suffering its worst ever economic crisis, with ballooning foreign debt driving up inflation and resulting in several consecutive devaluations of the local currency against the dollar.

Inflation peaked at nearly 40 per cent last year, before winding down to 27.5 per cent in June.

The IMF has demanded wide-ranging reforms, most notablyadopting a liberal exchange

regime as well as limiting government spending and incentivising private investment.

Alongside the economic crisis, Egypt has also been caught in regional tensions, with bloody wars raging in neighbouring Gaza and Sudan.

Attacks by Yemen's Iran-backed Houthi rebels on shipping around the Red Sea have also hit revenues from Egypt's Suez Canal, recording

a 23.4-per cent drop in the 2023-2024 fiscal year compared to the previous one.

The key waterway, which connects Asia to Europe, normally carries about 12 per cent of global maritime trade.

RIO DE JANEIRO — Brazil's President Luiz Inacio Lula da Silva will launch an initiative Wednesday to fight world hunger ahead of a meeting of G20 finance ministers in Rio de Janeiro.

Lula has made the issue a key priority of Brazil's presidency of the G20, along with taxing the super-rich, which will top the agenda when finance ministers meet on Thursday and Friday.

"The fight against inequality, the fight against hunger, the fight against poverty are all fights that cannot be done by one country," Lula told reporters on Monday.

"It has to be done by all the countries that are willing to take on this historic responsibility."

A UN report published Wednesday said 733 million people had suffered from hunger last year — nine percent of the world's population.

"We can solve this crisis, and finance is the key," UN Secretary-General Antonio Guterres said in a video message during the presentation of the report.

"Hunger has no place in the 21st century."

Lula's initiative, dubbed the Global Alliance against Hunger and Poverty, will seek to secure common financial resources to combat world hunger and replicate successful programs that have worked locally.

Taxing billionaires 

The meeting of finance ministers is one of the final gatherings before heads of state gather for the G20 summit in Rio on November 18 and 19.

At a previous meeting in Sao Paulo in February, finance ministers tackled ways to tax the ultra-wealthy and prevent billionaires from dodging tax systems.

The initiative involves determining methodologies to tax billionaires and other high-income earners based on the work of French economist Gabriel Zucman — an expert on the link between tax evasion and inequality.

The initiative is backed by France, Spain, South Africa, Colombia and the African Union.

However, talks have been highly contentious, and progress is far from guaranteed.

Brazil's Economy Minister Fernando Haddad said ministers had hit a "dead end" in February.

"There is no consensus as things stand," the German Finance Ministry said on Tuesday.

US Treasury Secretary Janet Yellen opposed international negotiations of the subject during a G7 finance meeting held in May in Italy.

"We think that probably the most effective and impactful tax solutions in this space will almost certainly vary fairly widely across jurisdictions," a senior US Treasury official said.

The meeting will also try to make progress on the taxation of multinational corporations nearly three years after an agreement was signed by nearly 140 countries.

Brazil hopes to publish three texts after the meeting, said Tatiana Rosito, a senior official at the economy ministry.

Aside from a joint final communique, this would include a document on "international cooperation in tax matters" and a separate communique from Brazil on geopolitical crises.

Founded in 1999, the Group of 20 assembles 19 of the world's largest economic powers, as well as the European Union and the African Union.

The organisation was originally focused on global economic issues but has increasingly taken on other pressing challenges.

NEW YORK — General Motors reported higher profits on Tuesday behind another round of strong North American auto sales, with executives vowing a flexible approach to electric vehicle (EV) investment while demand growth ebbs.

The major US automaker's second-quarter results demonstrated a continued lift from robust pricing in its home market, thanks to healthy demand for trucks that has made up for weakness in China.

GM, like fellow Michigan automaker Ford, has slowed down its EV build-out, pushing back another project even as company officials emphasised a long-term commitment to the strategy.

"As we go forward, we're going to bring additional capacity online in a measured cadence," said Chief Executive Mary Barra, pointing to third-party studies showing slower EV growth in the coming period compared with the last few years.

Profits came in at $2.9 billion, up 14 per cent from the year-ago period while revenues rose 7 per cent to $48 billion.

GM increased some of its full-year projections based on the results.

North American auto sales rose compared with the year-ago period, with the company enjoying still-strong vehicle pricing that has lasted longer than analysts expected.

Barra, in a letter to shareholders, pointed to "consistently high performing portfolio of ICE [internal combustion engine] trucks and SUVs on a volume, share and margin basis".

China woes continue 

GM continued, however, to struggle in China, where competition among car companies is high and the company suffered a second consecutive quarterly loss in equity income.

Competitors are "prioritising production over profitability", said Barra, who plans to revamp a joint venture with Chinese company SAIC in hopes of a turnaround.

"When you get into the type of pricing where that's going on now, it's really a race to the bottom," Barra said.

GM noted that the company's Cruise autonomous vehicles service has returned to the road in three cities — Phoenix, Dallas and Houston — after a pause due to safety issues.

Cruise is employing a driverless taxi model in these three cities, with a safety driver present to take over if needed.

The company has not resumed service in California. Authorities halted testing of Cruise vehicles in the state in October 2023 following a series of accidents.

GM accounted for $605 million in costs in the second quarter due to a production halt on the Cruise Origin, which had been planned as a fully autonomous vehicle with no steering wheel.

Barra said the company was focusing on scaling up Cruise with a model based on the Chevrolet Bolt.

"I do think in the future, there's going to be opportunity for a vehicle like the Origin and so that remains open to us at the right time," she said.

"This was about getting costs down at Cruise and being able to scale without... uncertainty" around regulatory action.

Michigan EV project delayed 

In a letter to shareholders, Barra said the company was proceeding with a ramp-up of production of the Chevrolet Equinox EV, calling the vehicle a "game changer" because of its moderate price.

But GM Tuesday announced it is pushing back for the second time the schedule to revamp a plant in Orion, Michigan, to produce EVs.

GM now expects production to begin in 2026, a six-month delay from the prior schedule after previously pushing back the $4 billion plant upgrade by a year.

"We are adjusting our spending plans to make sure we're capital efficient and moving in lockstep with customers," Barra said.

GM shares were down 6.2 per cent in morning trading. Shares had risen nearly 39 per cent between the end of 2023 and Monday.

LONDON — Irish no-frills airline Ryanair on Monday said net profit almost halved in its first quarter as lower air fares offset a jump in demand.

Profit after tax dropped 46 per cent to 360 million euros ($392 million) in the three months to the end of June compared with 12 months earlier, Ryanair said in a results statement.

Passenger numbers increased 10 per cent to 55.5 million and average air fares dropped 15 per cent, the Dublin-based carrier added.

The airline said it was impacted also by the timing of Easter this year.

Ryanair said the lower-fares environment had continued into its second quarter.

"While second-quarter demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer," Chief Executive Michael O'Leary said in the release.

He added that full-year traffic was expected to grow 8 per cent, or as much as 200 million passengers, as long as Ryanair did not face further delay to deliveries of new Boeing planes.