Business

TOKYO — SoftBank Group reported an annual net loss of over $7.2 billion on Thursday after a bruising year for the tech startup sector in which it is heavily invested.

The company said its annual net loss came to 970 billion yen ($7.2 billion) on sales of 6.57 trillion yen, reflecting in part major losses from its Vision Fund portfolios.

The Vision Fund 1 and 2 vehicles were hit by the global tech rout, SoftBank Group said in a statement.

But the depth of the group's loss was reduced by unwinding its stake in Chinese tech giant Alibaba.

"Share prices of numerous public portfolio companies declined for the fiscal year amid the weakness in global stock markets, although share prices of several companies rose in the fourth quarter," SoftBank said.

"The fair value of a wide range of private portfolio companies also decreased, reflecting markdowns of weaker-performing companies and share price declines among market comparable companies."

The two Vision funds recorded a whopping 4.3 trillion yen in losses ($32 billion), SoftBank said — a record, according to Bloomberg News.

SoftBank took hits across a range of startup investments, from long-struggling WeWork to delivery service DoorDash.

The Japanese group has made aggressive investments in tech startups and has been exposed to fickle market forces.

"SoftBank Group's performance very much depends on share prices," Hideki Yasuda of Toyo Securities told AFP ahead of the company's announcement.

Analysts fear more bad news may be on the cards.

"We believe that the private company portfolios... are at risk of further meaningful markdowns going forward," wrote Victor Galliano, an analyst who publishes on SmartKarma.

Vision Fund vehicles had reported losses for four straight quarters through December.

Risk evaluator Standard and Poor's gave SoftBank Group's long-term bonds a BB+ rating in February. 

The group said earlier this year that it was focused on "defence", though it was convinced of investment opportunities for artificial intelligence.

Led by billionaire founder Masayoshi Son, SoftBank Group is going through a broad rethink to restore its financial health, hit hard by global economic disruptions caused by the pandemic.

It is moving to take British semiconductor firm Arm public while selling down its stake in Alibaba. 

Britain had hoped to see the chip designer listed on the London stock exchange, but in March the firm and SoftBank said they would instead pursue a US-only listing for now.

SoftBank initially hoped to sell Arm to US chip giant Nvidia, but the $40 billion deal was scrapped over regulatory objections.

Son had reportedly hoped to secure a valuation of around $60 billion for Arm, but analysts say it will now be lucky to secure around half that — approximately what it paid for the firm in 2016.

SoftBank has also moved to offload almost all of its stake in e-commerce giant Alibaba, raising cash while limiting its exposure to China's tech crackdown.

The company once held more than 30 per cent of Alibaba, and said on Thursday it recorded gains of 4.8 billion yen in fiscal 2022 as it took steps to reduce its stake in its long-term partner.

The small amount of remaining shares will also be offloaded in one or two years, chief financial officer Yoshimitsu Goto told reporters.

He did not give exact figures, but the Financial Times reported last month that SoftBank plans to reduce its stake in Alibaba down to 3.8 per cent.

LONDON — The Bank of England (BoE) on Thursday lifted its key interest rate to the highest level since the 2008 financial crisis, noting inflation remained stubbornly high but that the economy would now avoid recession this year.

The BoE hiked the rate by a quarter-point to 4.5 per cent — its 12th increase in a row with UK annual inflation stuck above 10 per cent, fuelling a cost-of-living crisis across Britain.

Global policymakers are battling elevated inflation caused largely by runaway energy bills following last year's invasion of Ukraine by major oil and gas producer Russia.

Following a regular policy meeting, the BoE warned of "considerable uncertainties" on when UK inflation would return to its two-per cent target, as soaring food prices offset sharp drops to energy costs.

At the same time, the central bank made a record upgrade to its British GDP forecast, adding there would be only a small impact from recent turmoil in the commercial banking sector.

"Six months ago, we were expecting a shallow but long recession," BoE governor Andrew Bailey told a press conference.

"Since then, energy prices have fallen substantially and economic activity is holding up much better than expected."

Bailey said the UK would this year experience "modest but positive economic growth and a much smaller increase in unemployment.

"We think inflation will fall quite sharply over the coming months," he added.

Official data Friday is expected to show the UK economy grew during the first quarter of this year after narrowly avoiding recession in the last three months of 2022.

The rate decision comes one week after UK Prime Minister Rishi Sunak's Conservative government suffered a drubbing in local elections, as voters gave their verdict over rampant living costs despite government efforts to partly subsidise energy bills.

The nation has been plagued by strikes as high inflation erodes the value of wages. Train staff will walk out again on Friday following months of industrial action across the private and public sectors.

The latest BoE hike is set to deepen the crunch in living standards as retail banks pass on the increase, resulting in higher repayments on loans, including mortgages.

At the same time, those who can afford to save will benefit for increased fixed returns on investments.

"Although it is good news that the Bank of England is no longer forecasting recession, today's interest rate rise will obviously be very disappointing for families with mortgages," said British Finance Minister Jeremy Hunt. 

Highest inflation in G-7 

Thursday's news took British borrowing costs to a level last seen in October 2008, before rates were slashed during the global financial crisis.

The BoE has ramped up borrowing costs from a record-low of 0.1 per cent in December 2021.

Its latest hike came one week after the European Central Bank and the Federal Reserve implemented quarter-point rate increases as inflationary pressures ease only slightly in the eurozone and the United States.

UK annual inflation stood at 10.1 per cent in March, the highest level in the Group of Seven richest nations.

Sunak and the BoE blame the high level in part on rises to pay and have urged employers to show restraint.

BoE Chief Economist Huw Pill recently stated that Britons need "to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices via higher wages".

SAN FRANCISCO — Google is expected to enrich its popular online services with more artificial intelligence on Wednesday as it scrambles to catch up with rival Microsoft despite fears that AI poses a threat to society.

Leaks ahead of the Internet titan's annual developers conference have revealed that Google will also show off new gadgets, including a foldable smartphone, and reveal additions to its Pixel line of devices.

Most attention will focus on Google's expected release of a more muscular version of its Bard generative AI being put to work across the platform.

Microsoft upped the pressure last week by expanding public access to its generative AI programmes — including the Bing chatbot — that have put the company founded by Bill Gates back on the map as a big tech disruptor.

The services have been enhanced with the ability to work with images as well as text, and Microsoft intends to add video to the mix, according to executives.

Google is expected to follow suit in AI announcements at its annual "I/O" software developers conference held a short walk from its headquarters in the Silicon Valley city of Mountain View.

A more powerful large language model built into the heart of Bard will likely be unveiled, along with expanded use of the AI powers in Gmail, work software, search and more, according to media reports.

Large language models involve machine learning applied to massive amounts of data harvested from the Internet.

Generative AI can be prompted to quickly deliver written tasks from poetry and homework to computer code. It can also be prompted to create images or video.

Risks from AI include its potential uses for fraud, with voice clones, deep-fake videos and convincing written messages.

A prominent computer scientist dubbed "the godfather of artificial intelligence" recently quit his job at Google and spoke out about the dangers of the technology.

Geoffrey Hinton said at a recent MIT forum that it makes sense to halt the development of AI, but added that the idea is naive given the intense competition between countries and companies involved in the sector.

Hinton, who created some of the technology underlying AI systems, maintained that the existential threat from AI is "serious and close".

A range of experts in March urged a pause in the development of powerful AI systems to allow time to make sure they are safe.

Their open letter, signed by more than 1,000 people, including tech billionaire Elon Musk and Apple cofounder Steve Wozniak, was prompted by generative AI technology from Microsoft-backed firm OpenAI.

Folding phone 

The I/O gathering is aimed at software developers who make apps or services that dovetail with Google's "ecosystem" and should include details about the latest Android operating system for mobile devices.

Recent tweaks to Android hint it is being adapted for phones with screens that bend, allowing them to be folded.

Google recently posted a brief video clip teasing a foldable phone that it is likely to formally introduce at the conference.

Leaked information in recent weeks indicates that Google will also show off a lower-priced version of its Pixel 7 smartphone along with a new Pixel tablet.

Google might provide a glimpse of a Pixel 8 phone coming as its new flagship model to challenge iPhone at the premium end of the market.

Google's latest quarterly earnings exceeded expectations after the company slashed 12,000 staff, or 6 per cent of its workforce, in January.

BEIJING — Social networking firm LinkedIn announced on Tuesday that it will close down its last service available in China, citing "fierce competition and a challenging macroeconomic climate".

Microsoft-owned LinkedIn was one of the few US technology companies to successfully operate a social media site in China, where the internet is heavily regulated and censored.

The company had introduced a unique domestic version of the career networking platform operated locally in order to comply.

In 2021, new sign-ups for the LinkedIn app in mainland China were suspended by the firm, which referenced a "significantly more challenging operating environment and greater compliance requirements in China".

Microsoft then replaced it with a simplified version called InCareer, which allowed local professionals to continue to find and apply for jobs as well as stay connected with their network.

"After careful consideration, we've made the decision to discontinue InCareer effective August 9, 2023," the platform said in a statement on Tuesday.

"Despite our initial progress, InCareer faced fierce competition and a challenging macroeconomic climate, which ultimately led us to the decision of discontinuing the service," LinkedIn said.

An e-mail from CEO Ryan Roslansky published online added that closing the China service would result in "a reduction of roles for 716 employees".

But a representative from the company told AFP that LinkedIn would "continue to have a presence" in the country by focusing on "assisting companies operating in China to hire, market, and train abroad".

The US firm once achieved a rapid rise in China, benefiting from a culture of connections, or "guanxi", in which one's contacts and professional network are essential assets.

However, LinkedIn has been marginalised in recent years as innovative local apps have surged in popularity.

Most US Internet giants — including Facebook, Twitter, Instagram and YouTube — have long been blocked in China as they fail to comply with strict and often murky regulations.

Tech firms operating in the country are pressured to block unwanted content and topics considered politically sensitive in the name of social stability.

LinkedIn has come under fire in recent years for removing the accounts of dissidents and erasing content on sensitive issues.

PARIS — The cost to secure thousands of inactive oil and gas wells in the US Gulf of Mexico could top $30 billion, according to research published Monday weighing potential environmental damage against the estimated price tag.

Researchers in the United States found there are some 14,000 unplugged oil and gas wells that are either officially idle or have been inactive for at least five years in the waters off the south-eastern coast of the United States. 

With new US government funding available for plugging old fossil fuel wells, the authors focused on offshore sites which are relatively more costly and complicated to secure than those on land. 

They said both taxpayers and fossil fuel giants would likely be liable for the costs of plugging and abandoning the wells — a process that includes encasing the opening in concrete to stop oil and the potent greenhouse gas methane from leaking out.

"The wells aren't supposed to just be leaking into the environment if they're not actively producing... but sometimes they do," said Mark Agerton, lead author of the study published in the journal Nature Energy.

Shallow waters 

The research found that while 90 per cent of the inactive wells in the US Gulf of Mexico region were in shallower waters closer to shore, they accounted for only a quarter of the $30 billion in plugging costs — and presented a greater environmental risk. 

"The policy implication is that you'd likely focus on those shallow ones," said co-author Gregory Upton of Louisiana State University in a press briefing.

Researchers identified some 13,000 idle wells in shallow waters close to shore, either in the state waters of Texas, Louisiana, and Alabama, or in federal jurisdiction.

Oil leaks from these shallow wells would be more likely to pose a threat to coastal habitats than those from deeper wells, the authors said. 

"Also, any leakages are more likely to get to the surface and in the case of methane emissions going into the atmosphere and thus cause climate damages," Upton said. 

The study said much of what is known about the environmental impacts of oil and gas spills at different depths comes from the 2010 Deepwater Horizon explosion in the Gulf of Mexico, one of the worst environmental disasters in US history. 

The BP-leased rig exploded off the coast of Louisiana, killing 11 people and spewing out an oil slick the size of the state of Virginia.

While inactive wells are more likely to produce "small, chronic and potentially unobserved" leaks, the study said the underlying processes affecting ecological impacts "have many similarities".

Who pays? 

Under US laws, the costs for plugging wells in state waters are more likely to fall on the taxpayer, while in federal waters it is often the current or even previous owner that is liable. 

In the case of the Gulf of Mexico wells, the study found that of the total $30 billion in estimated costs for plugging inactive wells, under $2 billion were in state waters. 

The vast majority of costs were in federal waters, where nearly 90 per cent of the wells had at one point been owned by "supermajor" companies like Chevron, Shell, ExxonMobil, ConocoPhillips, BP, Total and Eni. 

"I think that points to a very strong conclusion that before a taxpayer would be liable for a well, there's a large oil and gas firm that would be liable," said Agerton. 

GAZA CITY — Seeking a path out of the Gaza Strip's grinding poverty, Islam Abu Taima combs market alleyways for scraps of cardboard, hoping to transform the castoffs into sellable toys.

Poverty in the conflict-wracked Palestinian territory, a thin strip of land wedged between Israel, Egypt and the Mediterranean Sea, has hit a rate of 53 per cent, according to the Palestinian Central Bureau of Statistics.

Work opportunities are scarce in Gaza, which has been under a crippling Israeli-led blockade since the Islamist movement Hamas took power in 2007, and Abu Taima, an English literature graduate, has struggled to find a job.

She lives with her husband Mohammed, who is also unemployed, in Al Shati refugee camp where they began making toys for their five children because "the children keep asking" for them.

Abu Taima's husband "started making bicycles and a small car for them to play with".

"They were happy and we found them lovely," said the 39-year-old, whose home lacks running water or electricity.

She now sells their creations for five to 10 shekels ($1.40 to $2.80) a piece on pavements in central Gaza's more affluent areas.

Abu Taima and her husband also use their creative skills to make models and toys that would otherwise be unattainable to their family.

"My husband thought of making old planes and convertibles like the ones famous people drive. It helps him come out of his depression," she said.

For Abu Taima, scouring Gaza's markets for cardboard can be tough.

"I find it difficult when I walk on the street because people look at me with confusion and ask: 'Why do you collect cardboard?' I can't answer everyone," she said.

The couple makes one or two toys a day, but even if they sell all their wares the profit falls short of the 450 shekels needed to pay their monthly rent.

"The goal is to help my family live, and make my living on a daily basis, as simple as it is."

With the unemployment rate hitting 45 per cent, according to the International Monetary Fund, many more Gazans are finding alternative ways to make a living.

Soap start-up 

In Deir Al Balah in central Gaza, Alaa and Salama Badwan have transformed their rooftop into a small plant nursery. 

"We use the roof because we lack space," said Salama, 40, between red and green-painted tyres serving as pots.

Alaa collects the sap from aloe vera plants, which Salama then uses to make soaps in a makeshift home workshop. 

So far, they have yet to cover the start-up costs of the nascent project.

Alaa, 37, came up with the idea while researching natural cosmetics online, which have become fashionable in the coastal enclave.

They sell their produce to local pharmacies and have ambitions for it to become as popular as the famed olive oil soap from Nablus, a city in the occupied West Bank.

"The situation is difficult but people's attitudes are positive," said Alaa.

After returning to Gaza to help her family, 25-year-old graduate Amani Shaath failed to find work.

According to Palestinian figures, the unemployment rate for young graduates has hit a staggering 73.9 per cent.

Shaath had worked for four years in fast-food outlets in Turkey, and in February took matters into her own hands by opening a kiosk on Gaza's seafront, selling hamburgers for 15 shekels each at the popular recreational spot.

Beachside food outlets have multiplied in recent years, but few are staffed by women.

"The first day, people looked at me with astonishment. That shocked me and I was scared that the project would fail," Shaath said.

"Then people started to come and they encouraged me, especially because I'm a girl." 

BEIRUT — At Lebanon's national music conservatory, pianos collect dust and classrooms sit empty, making the institution another casualty of an economic collapse that has crippled the public sector and hampered education.

Toufic Kerbage, 65, watched the value of his pay packet and pension evaporate after the Lebanese economy began melting down in 2019, taking the local currency and people's savings with it.

Without family support "I would have starved", said the music teacher, who began working at the conservatory in the late 1980s.

"It's difficult at my age to ask for money," he said from the silence of the conservatory's branch in Sin Al Fil, a suburb of the capital Beirut.

Once on a comfortable income, Kerbage now earns around $70 a month, in a country the World Bank says suffers the highest food price inflation globally.

He has been teaching his classes online, battling Lebanon's "disastrous" Internet and spending more than he earns on a generator subscription to get through hours-long daily power cuts.

The state-run conservatory, with several thousand mostly school-aged students and 17 branches around the country, counts prestigious musicians like the composer and oud player Marcel Khalife among its alumni.

But as the economic crisis grinds on, some teachers have quit. Many others have turned to online classes to save on travel costs or teach private lessons on the side to make ends meet.

Kerbage said he was "worried" about colleagues without a support network.

'Musical revolution' 

Taking matters into their own hands, a group of teachers and students have been holding independent concerts to highlight their plight and give musicians a chance to support each other and perform.

"I am here today to stand with my colleagues who are not happy with the way we are treated," said concert organiser Ghada Ghanem, who is also a teacher and soprano.

Some teachers have moved house or "sold their cars" to survive, added Ghanem, herself a conservatory student during Lebanon's 1975-1990 civil war.

The shows' proceeds will be invested into creating further performance opportunities or distributed among those involved, she said, calling the initiative a "musical revolution".

"Let's fix our problems with our own talent," Ghanem said recently from a darkened Beirut theatre before a recent show — the second in a planned series.

"Depression will attack us if we sit and do nothing."

Matthew Ata, 10, said he was "a bit nervous" about his debut concert performance.

Despite starting with the conservatory two years ago, he only met his guitar teacher for the first time at the show.

"We really hope that things will get better" and in-person classes will resume, said Matthew's mother, Rita Jabbour.

Some students said the protracted online teaching and disruptions had left them feeling discouraged.

Software Engineer Aline Chalvarjian, 33, who studies oud and lyric singing, said she had "lost motivation".

The conservatory used to be "like a second home", she said. Now, "we feel that we are left behind".

'First' pay boost 

Like other public sector workers throughout the crisis, conservatory staff have taken strike action to demand their rights are respected, with the head of the conservatory teachers' league sacked in January after organising protests.

In recent months, teacher strikes at Lebanon's public schools have paralysed the education sector.

Soprano Hiba Al Kawas, who last year became the first woman to head the conservatory, said she had worked day and night to improve the situation, but political deadlock has stymied progress.

Lebanon's entrenched political elite, widely blamed for the country's crisis, has failed to take action to stem the three-year economic collapse.

As sectarian barons bicker over who should be the country's next leader, the presidency has remained vacant since October 31, while a caretaker government with limited powers has been at the helm of the bankrupt state for almost a year.

Despite the obstacles, Kawas said she had managed to secure pay increases that should allow a return to in-person teaching.

A teacher who was paid 30,000 Lebanese pounds per hour — $0.50 based on an exchange rate used for public sector salaries — would earn 300,000 once the wage hike takes effect, she said.

It is "just a first step", Kawas added. Teacher Kerbage expressed optimism at the new regime, which he said should push his monthly earnings into the hundreds of dollars.

"Anything" would be welcome, he said.

"I would be able to pay for my fuel, for my electricity, and for some food — that's a lot."

SAN FRANCISCO — Apple on Thursday said iPhone sales and money made from services powered quarterly earnings that beat forecasts, despite inflation pressure and the slowing global economy. 

The iPhone maker's bottom line capped a successful earnings season for US tech giants, with Meta, Google and Amazon also beating expectations after suffering a painful spell of lower sales and profits.

The smartphone titan reported profit of $24 billion on revenue of $94.8 billion in the first three months of this year.

The overall revenues for the period were lower than a year before, though this was expected and Apple's shares were up about one percent in after-market trading.

"We are pleased to report an all-time record in services and a March quarter record for iPhone despite the challenging macroeconomic environment," Apple Chief Executive Tim Cook said in an earnings release.

Sales of iPhones were up 2 per cent and tallied $51.3 billion in the quarter, according to earnings figures.

"The iPhone base has well over a billion active devices... We feel great about the size of it and the rate that it's growing," Cook told analysts after the earning result.

Analysts said this was at least in part due to the reopening of China after a long period of COVID-19 restrictions that hurt economic growth.

Though Apple has made noise with its expansion into India, China remains the iPhone maker's crucial supplier and a key market.

Apple was deeply affected by the years of Chinese COVID-related closures and is only now seeing its complex supply chain returning to normal.

India is 'major focus' 

The company founded by Steve Jobs is making a very publicised push into India, with Cook himself attending the country's first Apple Store openings last month.

"India is an incredibly exciting market. It's a major focus for us. I was just there, and the dynamism in the market, the vibrancy, is unbelievable," Cook said.

The country is home to the second-highest number of smartphone users in the world and efforts there help to deflect attention from the company's dependence on China.

Sales of Macs slipped to about $7.2 billion as belt-tightening around the world hit the entire personal computer market.

Shipments of Apple Macs and MacBooks, which are in the premium segment of the market, shrank more than 40 per cent in the quarter, research firms IDC and Canalys have reported.

Even though iPhones have been the heart of Apple's money-making machine, the company has made a priority of bringing in more revenue from content and services sold to users of its devices.

Apple said revenue from services stood at $20.91 billion, defying predictions that demand for streaming entertainment would fall steeply with the end of COVID restrictions.

Though the pile has diminished over recent years, Apple has $57 billion in cash on hand, which fuels market speculation that Cook will swoop in to buy up companies or invest further in services.

Apple also authorised an additional $90 billion stock buyback which will be welcomed by Wall Street as it pumps up the share price and the company's profit potential.

Asked about the future of artificial intelligence, as apps like ChatGPT take the world by storm, Cook insisted it was "very important to be deliberate and thoughtful in how you approach these things".

"There's a number of issues that need to be sorted... but the potential is certainly very interesting," he added.

Apple has largely refrained from joining the AI arms race that has seen its big tech rivals roll out new products to the alarm of some governments and regulators.

LONDON — Shell unveiled Thursday a sharp jump in profits, capping a blockbuster first-quarter earnings season for global energy majors that have shrugged off weaker gas and oil prices.

BP and Shell in Britain, ExxonMobil and Chevron in the United States, and TotalEnergies in France have together logged more than $40 billion in net profits for the three months to March.

"Looks as though earnings have held up much better than expected, largely it seems down to bumper trading revenues and much tighter cost control than in the past," about any time since 2014 — October 2018 aside — so relatively said Final to analyst Neil Wilson.

At $70-80 per barrel, "crude still trades higher than just speaking, pricing is still strong in terms of where it has been in the last decade", he told AFP.

For Shell, profit after tax surged 22 per cent to $8.7 billion from a year earlier, when it faced a $3.9 billion charge over its exit from Russia after Moscow invaded Ukraine.

The company benefited from falling costs and a better performance at its chemicals division, as it also unveiled a $4 billion stock buyback.

The news came after rival BP announced Tuesday that it rebounded into net profit of $8.2 billion in the first quarter, after a record loss a year earlier sparked by its own exit from Russia.

Outcry on election day 

The surging profits prompted outcry from critics as Britons face a cost-of-living crisis, which has topped the agenda for Thursday's local elections in England.

They have also rekindled calls for more taxation to help offset sky-high household energy bills caused by key producer Russia's war on Ukraine.

The Unite trade union, which campaigns for pay increases that keep pace with rampant UK inflation, slammed the "obscene" profits generated by the industry.

"The scale of profiteering displayed today by Shell and earlier this week BP is one of the corporate scandals of our times," said Unite General Secretary Sharon Graham, urging the UK government to expand its windfall tax on energy-sector profits.

Environmentalists meanwhile slammed BP and Shell over the climate impacts of their operations.

"It's time for the oil giants to start feeling the heat," said Greenpeace UK climate adviser Charlie Kronick.

"The UK government should... force Shell and the rest of the industry to start using their obscene profits to pay for the damage that their fossil fuel habit is causing to lives and livelihoods around the world."

Profits are also forging ahead outside Britain.

France's TotalEnergies saw net profit advance 12 per cent to $5.6 billion in the first quarter.

US giants benefitted from refining activities and cost-cutting, with ExxonMobil more than doubling profit to a first-quarter record of $11.4 billion, while Chevron chalked up $6.6 billion.

But the earnings come as energy majors have also drawn fire over their plans for transitioning away from hydrocarbons, particularly after BP decided to slow its move toward cleaner energy sources.

That has prompted derision by critics over its longstanding ambition to achieve net zero carbon emissions by 2050.

Analysts warn that the global energy sector now faces a massive struggle to transition to clean energy.

"Although the oil majors are enjoying strong profits for now, the industry faces an uphill battle as the world looks to wean itself off fossil fuels, shifting to renewables instead amid the fight against climate change," said Victoria Scholar, an analyst at Interactive Investor.

"As a result, there is much hesitation about investing in new fossil fuel products as net zero targets take centre stage."