China's Manufacturing Activity Tumbles Into Contraction
The S&P Global China general manufacturing purchasing managers index declined to 49.5 in July from 50.4 in June, according to data released Friday by S&P Global. A reading above 50 suggests an expansion in activity, while a reading below suggests contraction.
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SoftBank Swings to Profit on Nvidia Bet Ahead of Big AI Campaign
(Bloomberg) -- SoftBank Group Corp. swung to a profit in the June quarter, bolstered by gains in its holdings including Nvidia Corp. and Coupang Inc., in a boost for founder Masayoshi Son's planned bets on artificial intelligence technologies. All Hail the Humble Speed Hump Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Major Istanbul Projects Are Stalling as City Leaders Sit in Jail PATH Train Service Resumes After Fire at Jersey City Station The Tokyo-based company reported net income of ¥421.82 billion ($2.9 billion) in its fiscal first quarter, versus the average of analyst estimates compiled by Bloomberg of ¥158.23 billion. The Vision Fund logged a ¥451.39 billion profit. Son is doubling down on bets geared to help him capitalize on booming investment in AI hardware. As part of that shift in focus, SoftBank has been building stakes in Nvidia and Taiwan Semiconductor Manufacturing Co. among others, while selling off less relevant assets. SoftBank increased its stake in Nvidia to more than $3 billion as of end-March, helping the Japanese investor benefit from the AI accelerator maker's 46% rally during the three months through June. US President Donald Trump's threat to unleash 100% chip tariffs but exempt companies moving production to America is infusing optimism for SoftBank's $500 billion Stargate data center foray with OpenAI and Oracle. That nudged the Japanese company's stock up around 1.5% on Thursday, putting it on track to pass a record high it hit the day before. 'Our longer-term outlook for SoftBank Group is cautiously optimistic, with a consensus toward continued business expansion,' said Ashwin Binwani, founder of Alpha Binwani Capital. 'We are prepared for volatility and see it as a buy-the-dip opportunity.' The 67-year-old SoftBank founder seeks to play a more central role in the spread of AI through sweeping partnerships such as Stargate and a planned $30 billion investment in OpenAI. Son is also courting TSMC and others about taking part in a $1 trillion AI manufacturing hub in Arizona. But concern over whether SoftBank can manage multiple mass-scale funding needs as interest rates inch up is keeping its stock at a significant discount to the total net asset value of its holdings. Some of the conversations behind Stargate have slowed due to market volatility, uncertainty around US trade policy and questions around the financial valuations of AI hardware, Bloomberg News reported in May. 'Key points to consider in assessing SoftBank include whether investment in the Stargate Project involving AI infrastructure in the US will progress; whether additional investment in OpenAI amid a fluid management situation is tenable,' SMBC Nikko Securities analyst Satoru Kikuchi wrote in a note earlier this year. --With assistance from Aya Wagatsuma. Russia's Secret War and the Plot to Kill a German CEO The Pizza Oven Startup With a Plan to Own Every Piece of the Pie AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay Government Steps Up Campaign Against Business School Diversity A High-Rise Push Is Helping Mumbai Squeeze in Pools, Gyms and Greenery ©2025 Bloomberg L.P. Sign in to access your portfolio
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Tullow Oil PLC (TUWLF) (H1 2025) Earnings Call Highlights: Strategic Moves and Financial Challenges
Proceeds from Gabon Transaction: $300 million realized. Kenya Milestone Payments: $80 million expected before year-end. Cost Reduction: $10 million reduction in 2025, targeting $50 million savings from 2025 to 2027. Net Debt: $1.6 billion at the end of June. Production Guidance: 40,000 to 45,000 barrels of oil per day, adjusted for Gabon asset removal. Capital Expenditure: Expected to be $185 million, weighted to the second half of the year. Decommissioning Guidance: Adjusted to $20 million for 2025. Free Cash Flow: Negative for the full year at $65 a barrel, excluding disposals. Cash Flow Guidance: $300 million at $65 a barrel, inclusive of Gabon and Kenya proceeds. Annual Interest Saving: $8 million from debt reduction. Hedging Portfolio: 70% hedge protection in the second half of 2025 with a floor of $60 and a cap of $75 a barrel. Warning! GuruFocus has detected 4 Warning Signs with TUWLF. Release Date: August 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Tullow Oil PLC (TUWLF) successfully completed the Gabon transaction, realizing $300 million in proceeds. The company has made significant progress in cost reduction, achieving a $10 million reduction in 2025 and targeting $50 million in savings from 2025 to 2027. Tullow Oil PLC (TUWLF) has extended its revolving credit facility and repaid the 2025 notes, focusing on addressing upcoming 2026 maturity and further deleveraging. The company has returned to drilling in Ghana, successfully completing the first production well of the current campaign with promising results. A memorandum of understanding has been signed to extend the Ghana production licenses to 2040, maximizing the value potential of both TEN and Jubilee fields. Negative Points Jubilee field underperformed in the first half of the year, impacting free cash flow. Production has been lower due to downtime from the Jubilee maintenance shutdown and no new wells on stream. Oil prices have been lower in the first half of 2024, negatively affecting free cash flow. Free cash flow for the first half of the year is negative, driven by tax payments, gas receipts, and higher operating costs. Net debt at the end of June was $1.6 billion, indicating a significant financial burden. Q & A Highlights Q: Where do you think Jubilee production can grow to from here, and do you still believe it can grow as a result of the new drilling? A: Richard Miller, Interim CEO and CFO, expressed confidence in Jubilee's potential. He highlighted the steps taken to optimize current production and the return to drilling, which includes a six-well campaign. He believes these efforts will significantly grow Jubilee's production base from its current level. Q: Could you provide more detail on the decision points around repurchasing the TEN FPSO and removing the lease costs? A: Richard Miller explained that the fixed period on the TEN FPSO ends in the first quarter of 2027. The company is exploring options to reduce costs, such as acquiring the FPSO at a discount or extending the lease at a lower rate. These actions aim to create a sustainable cost base for TEN moving forward. Q: Can you explain the $100 million difference in free cash flow guidance and the impact of cost-saving activities? A: Richard Miller attributed the difference primarily to Jubilee's year-to-date production, which shifted 1.5 cargoes from 2025 to 2026. Additional costs include the OBN survey and redundancy payments. The company aims to generate up to $200 million in incremental free cash flow through cost reductions and production growth. Q: What gives you confidence that the $80 million from Kenya sale proceeds and $50 million of overdue gas payments in Ghana will be received before year-end? A: Richard Miller stated that the Kenya sale completion is progressing well, with necessary approvals expected soon. The MoU for gas payments in Ghana provides a guaranteed repayment mechanism, ensuring timely payments both historically and going forward. Q: Are there any further asset disposals expected before refinancing, or is the portfolio now stable? A: Richard Miller indicated that the focus is now on managing the two high-quality assets in Ghana. While there are potential royalty streams that could be monetized, the primary focus remains on the existing assets. Q: Could you update us on discussions with bondholders regarding refinancing options? A: Richard Miller mentioned regular engagement with bondholders to update them on business progress and market perspectives. The company has several refinancing options, some involving private capital, and is prepared to approach the bond market if necessary. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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China's Export Machine Powers Ahead While Trade With US Shrivels
(Bloomberg) — China's export growth unexpectedly accelerated last month in the fastest gain since April, as demand from around the world compensated for the continued slump in shipments to the US. All Hail the Humble Speed Hump Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Major Istanbul Projects Are Stalling as City Leaders Sit in Jail PATH Train Service Resumes After Fire at Jersey City Station Total exports rose 7.2% in July from a year earlier to $322 billion, a surprise to most economists who had expected a slowdown from June's increase of 5.8%. Data released Thursday by the customs authorities showed the pickup was driven by strong growth in shipments to the European Union, Southeast Asia, Australia, Hong Kong and other markets, which more than made up for the fourth month of double-digit declines in US purchases. 'What really supported China's stronger-than-expected overseas shipments in the past three months was exports to non-US markets,' said Jacqueline Rong, chief China economist at BNP Paribas SA. The resilience in overseas shipments comes despite the high tariffs imposed by the US, showing that global demand for Chinese goods remains strong and still provides a significant driver for the domestic economy. Beijing and Washington face an Aug. 12 deadline to prolong their 90-day tariff truce. While the Chinese side said the two nations agreed to extend it after talks in Sweden last month, US officials have made clear President Donald Trump will make the final call on maintaining the agreement. What Bloomberg Economics Says... 'The July reading supports our view that exports may stay broadly resilient despite weaker trade with the US. The key risk hinges on whether and how other countries may tighten controls on transshipments under their trade deals with the US.' — Eric Zhu. For full analysis, click here An improvement in demand outside the US has meant the value of exports so far in 2025 is well above any previous year and would reach almost $3.8 trillion at the current pace. But some economists expect a slowdown in the second half of the year as companies try to sell off their increased inventories. China's currency is also providing a boost to exports. The yuan rebounded a little from July but is still weaker than it's been for years against a basket of its peers. 'While some of the sales to the Asean countries was suspected to be linked to re-routing, exports to Latin America and Africa that were less likely to be associated with transshipments were even more robust,' Rong said. 'Chinese goods are very competitive, and in recent months the yuan actually depreciated against non-US currencies, which helped exports as well.' China has also increasingly relied on third countries for the manufacturing of final products or components, a trend that accelerated following Trump's first trade war and his imposition of higher restrictions on the world's second-largest economy. China's share of total value-added manufacturing of goods destined for the US through countries including Vietnam and Mexico surged to 22% in 2023 from 14% in 2017, according to Bloomberg Economics. Shipments to the US fell 22% from a year earlier after slumping just over 16% in June. Chinese firms were able to increase their sales in other markets to compensate for the drop to the US, with exports to the EU rising 9.3% and growing almost 17% to the 10 Southeast Asian nations in the Asean group. Imports climbed 4.1%, with the volume of purchases of integrated circuits rising to a four-year high. China's exports of chips were also strong, showing the effects of a strong global semiconductor sector and the boom in the development of artificial intelligence, according to Rong. Exports of ships fell for the first time in five months, while vehicle sales abroad continue their strong growth, rising almost 19% by value in July. Shipments of machines and high-tech products also grew, with sales of rare earths overseas down for a sixth month. Chinese imports of key commodities held up in July, with copper, iron ore, soybeans and crude oil all posting year-on-year gains. BNP's Rong cautioned, however, that China's stronger-than-expected import growth may not last, noting that the yearslong property market slump deepened last month. High-frequency data indicates that trade activity is already slowing, with Chinese ports processing fewer containers in the seven days through Aug. 3 than the previous period, the second straight week of declines. Overall, China's trade surplus was $98.2 billion, lower than in June but still well above the historical average. Should this trend hold up, it will be well above $1 trillion in 2025, providing much needed support to an economy in deflation and still facing weak domestic demand. —With assistance from Wenjin Lv. (Updates throughout.) Russia's Secret War and the Plot to Kill a German CEO The Pizza Oven Startup With a Plan to Own Every Piece of the Pie AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay Government Steps Up Campaign Against Business School Diversity A High-Rise Push Is Helping Mumbai Squeeze in Pools, Gyms and Greenery ©2025 Bloomberg L.P. Sign up for the Yahoo Finance Morning Brief By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
