- Fresenius Medical Care (FME TH) +2.6%
- Fresenius Medical Care 3Q Operating Income Beats Estimates
- Carrefour (CAR TH) +2.5%
- Carrefour Report to Lift Grocer’s Valuation: Morgan Stanley
- CaixaBank (48CA TH) +2.5%
- Hugo Boss (BOSS TH) +1.7%
- Hugo Boss 3Q Ebit Beats Estimates
- Lufthansa (LHA TH) +1.7%
- UCB (UNC TH) +1.6%
- UCB Sees FY Revenue EU6B, Saw High End of EU5.5B to EU5.7B
- Aurubis (NDA TH) +1.3%
- Zalando (ZAL TH) +0.9%
- Zalando 3Q Adjusted Ebit Margin Beats Estimates
- Infineon (IFX TH) -1.2%
- Navitas Semiconductor 3Q Adj Loss/Shr 6.0C, Est. Loss/Shr 6.3C
- Stora Enso (ENUR TH) -1.3%
- Campari (58H TH) -1.5%
- Schneider Electric (SND TH) -1.8%
- Schneider Electric CEO Exit Unwelcome, Cut to Hold at Berenberg
- STMicro (SGM TH) -2.1%
- Prysmian (AEU TH) -3.7%
- Prysmian’s Margins Near Their Peak, Morgan Stanley Downgrades
Britain will need gas plants as ‘back-up’ for wind in 2030, says grid operator
Report says ‘urgent action’ needed to meet government’s clean power target
Britain’s fleet of gas-fired power plants will need to stay online as back-up in 2030 even if the government hits its target of decarbonising the power system by then, according to official modelling published on Tuesday.
Gas plants currently account for about a third of Britain’s power requirements. While this will fall to less than 5 per cent in 2030, the same capacity of plants as today will be required as a “strategic reserve” for windless days, the National Energy System Operator said on Tuesday.
Its modelling is part of a wide-ranging study by NESO that considers whether and how the new Labour government can reach its flagship manifesto pledge of a clean power system in 2030.
It concludes that “urgent action” is needed to speed up the development of new wind turbines, solar panels and pylons, while consumers will also need to be far more flexible about when they use electricity.
The report finds that the overhaul requires annual investment of more than £40bn, with nearly 2,700 miles of offshore electricity cables and 620 miles of onshore cables to be built.
It concludes the overall costs of running the system in 2030 “should not increase for a clean power system”.
But it dodges the question of whether household bills will fall, something that had been promised by energy secretary Ed Miliband during the election campaign. NESO said too much depends on how the government chooses to fund its policy costs.
Many of these are currently added to electricity bills, but several campaigners and industry executives say they should be moved on to gas bills or funded through general taxation instead.
“How costs flow through to prices, and ultimately bills, will depend on policy design,” said the NESO report.
“We do not attempt to estimate an actual electricity bill given the heavy dependence on policy choices,” it said.
In response, Miliband said the report was “conclusive proof that the government’s clean energy superpower mission is the right choice for the country”. The government is “determined to ensure the significant reforms to planning and grid we need,” he added.
The government now faces significant decisions about how to fund support for the overhaul, and how robust it is prepared to be in overriding communities’ objections to new pylons nearby.
“Given the scale of the challenge it may be appropriate to aim high and unblock barriers across all areas,” NESO said.
Low carbon sources such as wind, solar and nuclear power supplied 51 per cent of Britain’s electricity in 2023, with gas supplying 32 per cent over the year, with the figure rising significantly on windless days.
Under NESO’s modelling, the role of gas will fall to less than 5 per cent in 2030. However the same capacity of power plants as today will still be needed to step in on windless days, when its contribution would be far higher.
This is likely to be supplied mostly by the existing fleet in 2030, although over time gas-fired power stations may be fitted with carbon capture technology or replaced by models running on hydrogen.
Gas-fired power plants currently receive payments to be on standby; these are expected to balloon from about £1bn this year to about £4bn in 2029-30, according to forecasts published last week by the Office for Budget Responsibility.
Under NESO’s modelling, Britain’s offshore wind capacity would also have to jump from 15GW to 43-50GW by 2030, while onshore wind would have to rise from 14GW to 27GW and solar would need to treble from 15GW to 47GW.
The country would maintain up to 4.1GW of nuclear power in 2030, partly by keeping open Sizewell B and by extending the life of at least one other existing nuclear power station.
Crucially there would also have to be a big jump in the use of “demand flexibility” that sees both households and companies encouraged to use more energy when there is more availability.
One government figure said there would need to be an information drive by both the state and by energy companies to encourage more flexible energy use: “We will have to do more selling to people the benefits and upsides of this.”
Norway shows just how China has advanced in cars
Brands such as MG, BYD and Xpeng are making big inroads into country’s auto market, competing on quality as well as price
If Europe wants to see how Chinese manufacturers could affect its all-important car industry, it could do worse than look to Norway. Fully 94 per cent of cars sold in the Nordic country in October were electric, putting it on course to hit a target of no new fossil-fuel passenger vehicles next year.
Chinese carmakers sold no cars in Norway in 2019; this year so far, they have managed to take 11 per cent market share. Brands such as MG, BYD and Xpeng are common sights on Norwegian streets. Perhaps most telling is that Oslo’s main shopping strip Karl Johans Gate has only one car dealership on it: Nio, a relatively new Chinese brand. Just around the corner, under the Financial Times’ Nordic bureau, an upmarket estate agent has been replaced by a flashy showroom for Voyah, replete with modern art.
It is hard to exaggerate the importance of Europe’s car industry either in economic terms or in symbolic value. It employs more than 13mn on the continent directly or indirectly, and accounts for one in 10 manufacturing jobs. It is equally hard to underplay the gloom in the sector right now. Amid the profit warnings being handed out by European carmakers, taboos are being threatened everywhere from Volkswagen planning its first closure of a factory in its homeland of Germany in 87 years to Europe’s oldest car plant in Turin being shut for large parts of the year.
But just as European manufacturers are being laid low by the move to electric vehicles, Chinese carmakers (and Tesla) are prospering. “I looked at VW, Toyota, Volvo, but I just think the Chinese have better technology, look cooler,” said Ivar, standing outside Nio’s dealership in Oslo. He added that the touchscreens so crucial to electric cars were far slicker in Chinese models than, say, VW’s.
Nio’s main storefront looks like a coffee shop, perhaps because it is one, selling everything from a matcha latte to pistachio cookies. “I had no idea it was a Chinese car store,” said one American tourist last month. Further on in the Nio store, it looks more like a lifestyle brand with jackets, suitcases and other bags for sale. It is only around the corner that cars such as ET5 saloon — with a starting price of NKr426,000 ($39,000) — make an appearance.
Manufacturers such as VW, Audi and Mercedes had become heavily dependent for their global sales on China, where they had to strike collaborations with local carmakers. Many Chinese companies are now beating the European marques where it hurts: by making arguably better cars in some cases. The German carmakers’ sales in China are falling hard as local manufacturers increasingly dominate. “Look at how the Chinese are now building better cars than the Europeans after starting cooperations with the Europeans decades ago. It’s amazing,” said one Nordic automotive executive.
The picture is less dramatic in Norway, even though the direction of travel is still clear and challenging for the Europeans. Tesla, the US industry upstart, is the biggest-selling brand in Norway this year, and is not far off selling as many as the next two — VW and Japan’s Toyota — combined, according to statistics from the Norwegian Road Association. Volvo, based in Sweden but owned by the China’s Geely, is not far behind that duo in fourth place.
The pace of the Chinese advance in Norway has been uneven. It has been led by MG, the former UK brand that is now owned by SAIC Motor, one of VW’s partners in China. Chinese makers had reached 5 per cent market share already in their first year of sales in 2020, and 10 per cent by 2022. In 2023, their share declined before rebounding to a fresh record level this year.
Established brands are far from finished: both Toyota and Volvo have increased their market share in the past five years, but VW and BMW have seen their share drop by more than a fifth.
As to where it could lead, a simulation published this year by the European Central Bank provides for alarming reading. If China’s car industry receives subsidies similar to those applied to its solar panel sector, an ECB simulation forecast Chinese carmakers’ global market share would increase by 60 percentage points and the Europeans’ would decrease by 30 percentage points. EU domestic production would fall 70 per cent.
The US and EU have sought to stem the rise of Chinese electric cars with tariffs, but Norway has pointedly refused to follow suit. How much tariffs will check the rise of Chinese manufacturers remains to be seen. For now, Norway serves as a local warning for European carmakers of what could happen if they do not move quicker.
Is Germany’s business model broken?
All three of the country’s major industries are in crisis, and the economy is flatlining. Are politicians finally waking up?
>>> Up
* Calida Raised to Market Perform at ZKB (+)
* Chevron Raised to Buy at DZ Bank; PT $170
* Chevron Raised to Buy at DZ Bank; PT $170
* Flow Traders Raised to Outperform at Oddo BHF; PT 23.40 euros (+)
* Lufthansa Raised to Equal-Weight at Morgan Stanley; PT 7 euros
* Pennon Raised to Overweight at JPMorgan; PT 700 pence
* SCA Raised to Neutral at JPMorgan; PT 146 kronor
* Severn Trent Raised to Neutral at Citi; PT 2,467 pence
* Severn Trent Raised to Overweight at JPMorgan; PT 2,975 pence
* United Utilities Raised to Buy at Citi; PT 1,137 pence
>>> Down
>>> Down
* Aedas Homes SA Cut to Neutral at JB Capital Markets
* Celanese Cut to Equal-Weight at Wells Fargo; PT $115
* Eckoh Cut to Hold at Peel Hunt; PT 55 pence
* Mobileye Cut to Hold at Spin-Off Research; PT $14
* Mobileye Cut to Hold at Spin-Off Research; PT $14
* Ryanair Cut to Hold at Peel Hunt; PT 19.50 euros
* Schneider Electric Cut to Hold at DZ Bank; PT 240 euros
* Schneider Electric ADRs Cut to Hold at Berenberg; PT $55.40
* SpareBank 1 Ringerike Hadeland Cut to Hold at Arctic Securities (+)
>>> Initiation
>>> Initiation
* Alleima Rated New Buy at Nordea; PT 96 kronor
* Kainos Rated New Buy at HSBC; PT 1,000 pence
* Kainos Rated New Buy at HSBC; PT 1,000 pence
* Rightmove Resumed Equal-Weight at Morgan Stanley; PT 650 pence
* Scatec Re-Initiated Hold at Kepler Cheuvreux; PT 85 kroner (+)
>>> Call
>>> Call
* Election Has Particularly Bullish Positioning: Citi Strategists (+)
* Harris Win May Spark Rotation Into Europe Stocks From US: RBC (+)
* Air France-KLM Downgraded at Morgan Stanley, Lufthansa Raised
* Prysmian’s Margins Near Their Peak, Morgan Stanley Downgrades
* Prysmian’s Margins Near Their Peak, Morgan Stanley Downgrades
* Schneider Electric CEO Exit Unwelcome, Cut to Hold at Berenberg
German gas importer Uniper starts repaying €13.5bn bailout
Nationalised group prepares for possible sale to return it to private hands
Nationalised German gas importer Uniper has started paying back a €13.5bn government bailout as it prepares for a possible sale to put it back in private hands.
The company, which was Europe’s biggest importer of Russian gas prior to President Vladimir Putin’s full-scale invasion of Ukraine, made a €530mn transfer to the German state in September.
A separate tranche of about €2.5bn will be transferred in early 2025, the company said on Tuesday, as it announced quarterly results.
Uniper became an ill-fated symbol of Germany’s over-reliance on Moscow in the wake of Putin’s 2022 invasion on Ukraine. Before the crisis, Europe’s biggest economy imported more than half of its gas from Russia.
Putin’s decision to cut gas supplies to Europe in 2022 pushed Uniper to the brink of collapse.
The German government stepped in, injecting €13.5bn in equity for a 99 per cent stake in the company, and granting it €6bn in loans in one of the biggest corporate bailouts in German history.
The company has quickly recovered, reporting “exceptionally good” earnings before interests and taxes of €6.4bn last year thanks to favourable gas market conditions and a successful hedging strategy.
Performance this year has been less strong, but the company is still expecting adjusted earnings before interest, taxes, depreciation and amortisation of between €1.9bn and €2.4bn for its full year, having generated €2.2bn in its first nine months of the year.
The German ministry of finance, which has said it aims to make a profit from its investment, announced in September that it was preparing to return the company to private hands, possibly by floating its shares.
Chief financial officer Jutta Dönges said Uniper welcomed the announcement, but stressed that any decisions about reprivatisation would be made by the government.
Uniper also used its results announcement on Tuesday to warn of slowing appetite for the hydrogen rollout the German government had placed at the centre of its green transition plans.
Reflecting a broader trend of hydrogen scepticism that has hit the share prices of US and European clean hydrogen companies in recent months, Dönges said the company had observed “a mood of caution” on the fuel among corporate customers.
It said that, as a result, the ramp-up of hydrogen power plants would be slower than the company had assumed 18 months ago.
Uniper — which runs projects that produce, transport and store hydrogen in Germany, Sweden, the UK and the Netherlands — said it would take longer than originally planned to meet its target of investing about €8bn in a green overhaul.
That goal would probably be met in the early 2030s instead of by the end of this decade, it said. The company added: “Uniper will only invest in projects that are based on a viable business case and that are expected to generate an appropriate return on investment.”
Early premarket gappers
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Gapping up:
- QNST +29.7%, ALAB +24.2%, SQNS +16.1%, VMEO +15.8%, BOWL +15.6%, PLTR +13%, EVER +10.9%, SBSW +8.8%, HIMS +8.3%, ICHR +7.7%, INTA +7.3%, SLF +6.9%, SUPN +6.6%, LPX +6.5%, PRAA +6%, CLW +5.9%, LBPH +5.1%, VVX +5%, BERY +4.7%, CSTL +4%, DLTR +3.8%, SNBR +3.8%, WOW +3.8%, ACDC +3.8%, SNDX +3.7%, PRMW +3.5%, HHH +3.5%, FTS +3.4%, BTBT +3.3%, HPK +3%, DD +2.7%, PRIM +2.6%, VRTX +2.4%, BWXT +2.2%, PARR +2.1%, CIFR +2%, MTG +2%, ANDE +2%, GUTS +1.9%, CAE +1.9%, BA +1.9%, INSP +1.9%, TECK +1.7%, CSWC +1.6%, WULF +1.5%, GROY +1.4%, IT +1.4%, JXN +1.3%, ADUS +1.2%, CRBG +1.1%, RPRX +1%, GT +1%, ITUB +1%, ACHR +0.9%, BFAM +0.9%
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Gapping down:
- MQ -39.7%, JELD -22.2%, NVTS -18%, LSCC -17.3%, CE -15.8%, ATUS -11.6%, SLAB -10.8%, CRUS -10.5%, GKOS -8.7%, MAX -8%, CLF -6.8%, ADM -6.4%, NXPI -5.3%, AZPN -5.3%, RYTM -5%, ST -5%, ABCL -4.8%, AOSL -4.8%, FWRD -4.3%, TDC -4.1%, TEM -3.4%, RRX -3.1%, WYNN -2.8%, WTRG -2.4%, FANG -2.3%, BWIN -2.2%, EGHT -2.2%, SAVE -2.1%, BCC -2.1%, METC -2.1%, SANA -1.9%, BXC -1.8%, OGS -1.7%, FN -1.7%, GXO -1.7%, FLL -1.5%, AHH -1.5%, HUN -1.1%
After Hours Summary: VMEO +15% and PLTR +12.1% up double-digits on earnings; DLTR +6.8% gaining on CEO and Chairman shakeup; MQ -29.9%, JELD -22.2% down big following quarterly numbers
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: QNST +25.2%, ALAB +23.9%, VMEO +15%, PLTR +12.1%, EVER +9.4%, INTA +7.5%, BOWL +7.3%, ICHR +7%, HIMS +6.4%, CLW +5.7%, EGHT +5.6%, PRIM +5.6%, ADUS +5%, ANDE +4.8%, WOW +3.7%, PRAA +3.6%, INSP +3.2%, HHH +3%, HPK +3%, BWXT +2.7% (also to acquire LHX's Aerojet Ordnance Tennessee business), BFAM +2.7%, CRBG +2.6%, CSTL +2.6%, SUPN +2.3%, SLF +2.3%, GT +2.1%, MTG +2%, SANM +1.9%, VRTX +1.7%, GXO +0.7%, TBI +0.4%, METC +0.4%, CDNA +0.3%, CBT +0.3%, VNO +0.2%, CWK +0.1%
Companies trading higher in after hours in reaction to news: DLTR +6.8% (CEO and Chairman steps down; appoints interim CEO and new Chairman; reaffirms guidance), CVAC +3.7% (appoints new CFO), SNDX +3% (enters into royalty funding agreement with Royalty Pharma), PRMW +2.9% (shareholder approval of merger with BlueTriton Brands), BTBT +2.1% (MSA with Boosteroid), GUTS +2% (to present new preclinical data), ACHR +1.7% (enters into MOU with FCA US LLC), CIFR +1.2% (October 2024 operational update), BERY +0.8% (completes merger and will trade under new ticker), RPRX +0.6% ($350 mln funding agreement with SNDX), NDAQ +0.2% (reports October 2024 volumes), OEC +0.1% (raising prices for certain products in Europe and South Korea)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: MQ -29.9%, JELD -22.2%, NVTS -14.2%, CE -14%, ATUS -12%, LSCC -11.5%, CRUS -9.2%, TDC -7.9%, GKOS -7.8%, SLAB -6.4%, TEM -6.1%, CLF -5.5%, NXPI -5.5%, ABCL -5.5%, AOSL -5.3%, ST -4.9%, RRX -4.5%, FWRD -3.6%, AZPN -3.6% (also to acquire Open Grid Systems), BWIN -3.6%, WYNN -3.4%, OGS -2.8%, WTRG -2.6%, FANG -2.5% (also issues letter to shareholders), ILMN -2.3%, VOYA -2.2%, HOLX -2.1%, FN -1.9%, PARR -1.6%, AHH -1.5%, VNOM -1.2%, BCC -1%, AIG -0.6%, HUN -0.3%, ES -0.3%, DEI -0.1%, EQH -0.1%
Companies trading lower in after hours in reaction to news: MAX -8.8% (provides FTC matter update), BXC -5% (opens greenfield distribution center), FLL -1.5% (files $500 mln mixed shelf), SAVE -0.8% (binding term sheet with GA Telesis to sell 23 aircraft), WULF -0.2% (October 2024 operational update)