Business

LONDON — Rolls-Royce, the British manufacturer of aircraft engines, said on Tuesday it plans to axe up to 2,500 jobs worldwide, or about six per cent of its staff, to further slash costs.

"It is estimated that 2,000-2,500 roles will be removed globally" under "plans for a simpler, more streamlined, organisation", the group said in a statement.

Chief Executive Tufan Erginbilgic, who began restructuring the group on taking the helm at the start of the year, said the company was "building a Rolls-Royce that is fit for the future.

"That means a more... efficient organisation that will deliver for our customers, partners and shareholders."

The statement said the latest restructuring would "help Rolls-Royce build enhanced capabilities in key areas such as procurement and supply chain management, ensuring they are as strong as the company's engineering and technical excellence".

Previous CEO Warren East had axed more than 9,000 jobs and launched a major divestment programme in 2020 to navigate damaging pandemic fallout across the aviation industry.

In a quick turnaround under its new boss, Rolls in August posted first-half net profit totalling £1.2 billion ($1.5 billion), compared with a loss after tax of £1.6 billion a year earlier.

Share price turnaround

Shares in Rolls jumped 2.1 per cent to 217.90 pence in early trading following the announcement.

London's benchmark FTSE 100 index on which Rolls trades edged up 0.2 per cent overall.

"One of the best performers this year has been Rolls-Royce, the share price has more than doubled as the turnaround plan set in motion by... East and carried on by new CEO Tufan Erginbilgic has continued apace," noted Michael Hewson, chief market analyst at CMC Markets UK.

Richard Hunter, head of markets at Interactive Investor, said the Rolls-Royce share price had soared more than 130 per cent this year also thanks to the recovery in air travel.

Shares won a further boost Tuesday from the announcement of the job cuts, "given savings which could amount to up to £200 million", he added

Away from aircraft engines, Rolls-Royce is engaged in developing small nuclear reactors that could provide power on the Moon, thanks to funding from the UK Space Agency.

The group, best known for its engines powering Airbus and Boeing aircraft, is working alongside UK universities including Oxford on the space project and hopes its first car-sized reactor would be ready to be sent to the Moon by 2029.

Erginbilgic, a dual UK and Turkish national, worked for more than 20 years at energy major BP.

MOSCOW — Russia on Monday followed its ally China in suspending all Japanese seafood imports over Tokyo's release of wastewater from the crippled Fukushima nuclear plant.

Japan has been sharply critical of Russia's invasion of Ukraine, while Tokyo's relations with Beijing — which has deepened ties with Moscow — have worsened.

Rosselkhoznadzor, Russia's body responsible for regulating agriculture products, said it was "joining China's provisional restrictive measures on the import of fish and seafood products from Japan as of October 16, 2023" as a "precautionary measure".

It said the restrictions would remain in place "until the necessary exhaustive information to confirm the safety of seafood produce... is forthcoming".

The Japanese government, which has called China's ban political and unscientific, urged Russia to reverse its decision, calling the move an "unjust" step "without any scientific basis".

The Japanese foreign ministry said it has explained the safety of the water release and complied with Russian requests this month for a meeting and further information about the subject.

"The decision by the Russian side is extremely regrettable, and we strongly request that it be withdrawn," the Japanese foreign ministry said in a statement.

In 2011, three reactors at the Fukushima-Daiichi nuclear facility in north-eastern Japan went into meltdown following a massive earthquake and tsunami that killed around 18,000 people.

Twelve years on, Japan began in August to discharge treated contaminated water from the stricken plant into the Pacific Ocean.

China in response banned all Japanese seafood imports over the "selfish" and "irresponsible" release, accusing Japan of treating the sea like a "sewer".

Big market 

Japan insists the operation is safe, a view backed by the International Atomic Energy Agency (IAEA), the United Nations nuclear watchdog.

A team from the IAEA — including a Chinese scientist — is due to take water and fish samples from near the site this week.

Beijing says Tokyo has not proved the authenticity and accuracy of the nuclear wastewater data, nor that the ocean discharge of the water is harmless to the marine environment and human health.

Before the ban, China was Japan's biggest market for fish, accounting for more than $500 million worth of exports in 2022.

The Japanese government has promised additional aid for the fishing sector, while seeking to boost exports to Europe and elsewhere.

Russia is much less important for Japan, accounting for around 260 million yen ($1.7 million) worth of marine product exports in 2022.

A lot more seafood — 155 billion yen — went the other way from Russia to Japan. 

540 Olympic pools

But the suspension is symbolically important as China and Russia grow closer in the wake of the Ukraine war.

Japan's close ally, the United States, has made a point of backing Tokyo, with the US ambassador to Japan publicly eating fish from the Fukushima area.

Japan banned imports of Russian lumber and vodka after the Ukraine invasion but marine products were exempted.

In all, Tokyo intends to discharge around 540 Olympic swimming pools' worth of water — some 1.3 million cubic metres (345,000 gallons) — from Fukushima in a gradual process lasting decades.

The water has been treated to remove radioactive substances — with the exception of tritium — and diluted with sea water.

Japan says tritium levels are within safe limits and below that released by nuclear power stations in their normal operation, including in China.

The water release is aimed at making space to begin removing the highly dangerous radioactive fuel and rubble from the wrecked reactors.

AMMAN  —  Arab Bank announced the successful issuance of $250 million in Additional Tier 1 (AT1) Capital Securities. The milestone marks the first sustainable perpetual AT1 issue in Jordan, according to a statement from the bank.

The bond, which was issued through a private placement, is listed on the International Securities Market (ISM) and the Sustainable Bond Market of the London Stock Exchange. 

The bond, which offers investors an interest rate of 8 per cent, attracted a diverse group of investors, including large institutional and individual investors from Jordan and several other countries where Arab Bank operates. 

The issuance is intended to further strengthen the bank’s capital base and diversify its sources of funding, to support its future plans for regional growth and expansion. 

Arab Bank’s Chairman Sabih Masri expressed his gratitude towards investors and stated: “The overwhelming demand for this issuance, which exceeded the issue size, underscores the deep-rooted confidence that local and regional investors bestow upon Arab Bank.” He also extended his sincere thanks to the Central Bank of Jordan and Jordan Securities Commission for their instrumental support.

“We are proud to receive such a strong vote of confidence from investors in response to this significant issuance,” commented Randa Sadik, Arab Bank’s CEO.  The proceeds of the issuance will be used to finance a portfolio of qualified sustainable projects, in line with Arab Bank’s strategy to integrate Environmental, Social and Governance (ESG) principles across the organisation. 

“In the upcoming period, we anticipate further initiatives, which will further boost the bank’s performance across the various business sectors,” Sadik added. “Our emphasis will remain on expanding into new markets, diversifying our revenue streams and continuing to provide comprehensive banking services and solutions, supported by integrated digital platforms and channels.”

Arab Bank, headquartered in Amman, was established in 1930 and currently has one of the largest global Arab banking networks with over 600 branches spanning five continents and covering key financial markets and centres. Earlier this year, Arab Bank was named the “Best Bank in the Middle East for 2023” by Global Finance magazine for the eighth consecutive year.

AMMAN (JT) — The Amman Chamber of Industry (ACI) has announced that industrial exports reached a total value of JD5.198 billion in the first nine months of 2023. This figure represents a slight decrease from the JD5.458 billion reported during the corresponding period in the previous year.

Data compiled by the Jordan News Agency, Petra,  showed growth in six sectors and a decrease in the remaining four sectors, ranging from 0.6 per cent in the garments and textile and a 15.2 per cent decrease in the mining sector.

India, the US, Saudi and Iraq were the main markets for ACI exporters in the past nine months with exports worth JD3.031 billion. 

Notably, exports to the US experienced a remarkable surge of 15.7 per cent, reaching JD856 million, a significant increase from the previous year's figure of JD740 million.

Statistics showed that ACI exports to Saudi increased in the past nine months by 9.9 per cent recording JD616 million compared with JD560 million for the same period last year. 

While ACI exports to Iraq witnessed a growth by 34.4 per cent, to JD629 million up from the previous year's JD468 million.

However, the export figures to India experienced a decline of 10.7 per cent, settling at approximately JD930 million compared with JD1.041 billion for the same period last year. Notwithstanding this decline, India remains a prominent destination for Amman's industrial exports within both Arab and foreign markets. 

Geographically, the distribution of Amman's industrial exports during the nine-month period underscores the prominence of Arab countries as primary recipients, accounting for a total of JD2.262 billion. Non-Arab Asian countries followed, with a cumulative value of around JD1.469 billion. Exports to African countries totalled JD46 million.

Further analysis of the geographical distribution reveals that North American countries collectively received approximately JD906 million in goods, South American countries imported goods worth JD86 million, European Union member states acquired JD211 million worth of exports, European countries outside the EU accounted for JD125 million, and other countries collectively received JD93 million worth of goods.

The sector-wise breakdown of Amman's industrial exports for the nine months highlights a diverse portfolio. Notably, mining industries constituted a significant portion, accounting for JD1.553 billion. The chemical and cosmetic industries closely followed with exports valued at JD984 million, while the engineering, electrical, and information technology sectors contributed JD736 million.

Other noteworthy sectors included food, agriculture and animal resources, valued at JD564 million, medical supplies amounting to JD486 million, and leather and textiles, totalling JD345 million.

The remaining exports over the past nine months distributed on the packaging, paper, cardboard, and office supplies industries amounting to JD228 million, plastics and rubber stood at JD178 million, construction at JD110 million and wood and furniture at JD13 million.

Established in 1962, the ACI currently boasts a membership of 8,600 industrial establishments, collectively employing approximately 159,000 individuals. The capital investment in these establishments stands at JD5 billion.

KESH — The IMF announced on Saturday member nations agreed to increase their contributions to the global lender and give Sub-Saharan Africa a third seat on its executive board at its first meetings on the continent since 1973.

Boosting the International Monetary Fund's (IMF's) quota resources and giving Africa a bigger voice within the institution were among the priorities of the week-long talks of the IMF and World Bank in Marrakech, Morocco.

Spanish Economy Minister Nadia Calvino, who chairs the IMF Financial Committee, said at a press conference that there was "agreement on a meaningful increase of quotas by the end of the year".

The quotas, which are based on the size of a country's economy, determine how much funding a nation should provide to the IMF, its voting power and the maximum amount of loans it can obtain.

IMF chief Kristalina Georgieva and World Bank President Ajay Banga used this week's meetings to urge members to step up funding so their institutions can better support nations hit by poverty and climate change.

The conflict between Israel and Palestinian militant group Hamas has raised concerns about its impact on already weak global economic growth in the wake of the Ukraine war, elevated inflation and high interest rates.

Georgieva said the agreement on quotas was "very heartwarming".

The goal, she said, was "to make the fund strong financially in terms of our ability to step up should we be hit by yet another shock".

Asked when the IMF will change its voting shares, Georgieva said: The "membership has agreed that this is going to be the next step and that there will be a clear pathway and plan to go there".

Giving countries like China, which is now the world's second biggest economy, a larger voting share has been a controversial issue.

China has a 6.08 per cent share of votes compared to 6.14 per cent for Japan, the third global economy.

"At some point, a revision of the IMF's quota distribution will be inevitable," French central bank Governor Francois Villeroy de Galhau said in Marrakesh on Wednesday.

"But the emerging countries that will benefit from this — including China — will have to accept common rules of the game," he said.

While voting shares were not changed, the IMF agreed to expand its executive board from 24 to 25 members to give Africa another seat.

Sub-Saharan Africa will now have three executive board members instead of two.

"I will finish with what warmed my heart the most: Uniform support for a third African chair on our executive board," Georgieva said.

"That is so important for meetings that take place on African soil," she said.

"Despite all the difficulties I can only praise our members for finding this pathway to solidarity on which hundreds of millions of people depend."

PARIS — The International Energy (IEA) Agency said on Thursday the risk of oil supply disruptions due to the conflict between Israel and Hamas is limited but that it stands ready to intervene in markets if necessary.

The Paris-based agency, in addition to its analysis and advisory roles, coordinates the release of emergency stocks held by its 31 mostly advanced-economy member nations.

A weekend attack by Hamas on Israel, and Israeli's military retaliation, have left thousands dead and rattled oil markets, amid fears that other nations might intervene and possibly disrupt shipments in the Middle East.

The region accounts for more than one-third of the world's seaborne oil shipments. 

"While the prospect that oil supply flows will be impacted currently remains limited, the deadly strikes prompted traders to price in a higher geopolitical risk premium," the IEA said in its regular monthly report.

"There has been no direct impact on physical supply," it added.

But with supply and demand on the oil market currently tightly balanced, the IEA said it "stands ready to act if necessary to ensure markets remain adequately supplied".

Oil prices jumped at the start of the conflict but have since eased as there was no immediate disruption to supply flows and other nations have not intervened.

Yet prices remain relatively high as a result of supply cuts by Saudi Arabia and Russia, with the IEA also warning it was beginning to see signs of demand destruction.

The oil market has for months been caught in a tug-of-war between concerns about supplies and demand as high energy prices, combined with interest rate hikes in most advanced nations to combat inflation, leave consumers squeezed. 

Fluctuating demand 

"There has been some evidence of large-scale demand destruction, especially in lower-income countries, like Nigeria, Pakistan and Egypt, and signs of accelerating declines within some OECD markets including the United States," said the IEA, referring to the OECD club of advanced economies.

Consumers in developing nations have been hit by the sliding value of their currencies relative to dollar — in which crude oil is priced — and often the removal of gasoline subsidies.

But gasoline deliveries in the United States also hit a two-decade low, the IEA noted, with many advanced nations set to begin seeing drops in demand due to the uptake of electric vehicles.

Nevertheless, global oil demand is still expected to grow by 2.3 million barrels per day (mbd) this year thanks to growth in China, India and Brazil, it said. 

That is unchanged from the IEA's previous forecasts, but the agency lowered its forecast for oil demand growth next year to 0.9 mbd.

The IEA also warned of possible shortages of diesel in Europe this winter.

"Ten months after the EU embargo on Russian crude came into effect, European refiners still struggle to lift processing rates and diesel output," said the agency.

Europe will need to maintain high levels of imports, particularly from the Middle East but stringent winter quality specifications could constrain supply, it warned. 

"It may take another mild winter to avoid shortages," said the IEA.

Diesel is a major fuel for passenger vehicles in Europe as well as for trucks.

Russia oil earnings rise 

Meanwhile, Russian oil export revenues surged by $1.8 billion to $18.8 billion in September, the highest level since July 2022, the IEA said, as both volumes and prices rose.

The European Union, G-7 and Australia introduced a price ceiling of $60 per barrel on Russian oil in December last year, to starve Moscow of much-needed revenue, but with limited success.

All Russian crudes traded at more than $80 per barrel in September, "well above the G-7 price cap", said the IEA. 

In added that Russian government revenues from oil in US dollars rose 24 per cent month-on-month in September, to $10.6 billion but were down 7 per cent from their level one year ago.

Meanwhile, the OPEC oil cartel in its monthly report revised slightly higher its forecast for Russian crude output in 2023, to an average of 10.5 mbd. That is a drop from around 11 mbd last year.

"It is worth noting that the expected contraction takes into account announced voluntary production adjustments to the end of 2023," said OPEC.

STOCKHOLM — Swedish furniture giant Ikea said on Thursday it was counting on price drops launched in September to stem two years of falling sales volumes attributed to soaring inflation.

The company reported on Thursday a 6.6 per cent rise in sales for the full-year to 47.6 billion euros ($50.2 billion.)

"This positive result was achieved despite the continued challenge of lower sales quantities," Inter Ikea said in a statement.

The company announced a rare price increase on all markets, of an average nine per cent, in December 2021 due to inflation.

But it began lowering its prices again on September 1 on hundreds or thousands of items, depending on the market, Tolga Oncu, the head of Ikea Retail at the Ingka Group which owns most Ikea franchises, told AFP.

The retailer said it was cutting costs by "improving material development and optimising production."

"Price sensitivity is increasing more than ever," Oncu said.

"In all the markets where we have implemented the start of decreasing prices we have seen a great response," he said.

"There is not a market that stands out with the opposite."

Jon Abrahamsson Ring, chief executive of Inter Ikea, the multinational's main holding company, said in a statement that Ikea "began to see a break in trend resulting in decreasing Ikea retail prices" at the close of the full-year 2023.

Ikea's fiscal year runs from September 1 to August 31.

"In challenging times when inflation is high and many people struggle with the cost of living, the need for home furnishing solutions at affordable prices is high," he said.

The company said it aimed to become "even more affordable".

DOHA — Qatar has agreed to supply France's TotalEnergies with natural gas for 27 years, its state energy company announced on Wednesday. 

Qatar will supply 3.5 million tonnes of gas a year under the deal, QatarEnergy said, following two agreements with Total last year for a share of the Gulf state's huge North Field gas expansion project. 

"These two new agreements we have signed with our partner TotalEnergies, demonstrate our continued commitment to the European markets in general, and to the French market in particular, thus contributing to France's energy security," Qatari Energy Minister Saad Al Kaabi said. 

Total signed a $1.5 billion deal with QatarEnergy in September last year giving it a 9.3 per cent stake in Qatar's North Field South project, the second phase of the field's expansion. 

In June 2022, the French energy giant became the first partner in the first phase of the expansion, North Field East, investing more than $2 billion for a 6.25 per cent total share. 

Deliveries of the gas to southern France are expected to begin in 2026. 

"Our commitment to ensure continued and reliable supplies of energy to Europe and the rest of the world is underpinned by our substantial and ongoing investments across the entire gas value chain," Al Kaabi, who is also chief of QatarEnergy added. 

Energy Security

After Moscow invaded Ukraine last year, European nations have scrambled to replace lost deliveries of natural gas following the withdrawal of Russia from the market. 

Under Qatar's North Field expansion of the world's biggest natural gas field, which extends under the Gulf into Iranian territory, Qatar is set to raise its output of liquified natural gas (LNG) by 60 per cent or more to 126 million tonnes a year by 2027. 

The main market for Qatari gas has traditionally been found in Asia, led by nations like China, Japan and South Korea. 

Qatar's deal with Total is equal in length to those agreed by the China National Petroleum Corporation in June and China's Sinopec in 2022, making it the third such deal, all of which have been the longest in the liquefied gas industry.

Speaking to reporters at the start of construction at the North Field expansion last week, the chairman of TotalEnergies, Patrick Pouyanne, told reporters the North Field Expansion would offer energy security. 

"We need more supply. That's clear. Still the market is fragile," Pouyanne said.

"This project is a major one and will give some relief to this market," he added.

Britain's Shell, Italy's ENI and US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion. 

Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.

Qatar Energy estimates the North Field holds about 10 per cent of the world's known natural gas reserves.