ExxonMobil sees US$1.5 billion earnings hit from lower oil, gas prices
Oil prices pulled down earnings by about US$1 billion while gas contributed another US$500 million hit when compared to the first quarter, the Spring, Texas-based company said on Monday (Jul 7). European rival Shell's shares fell 3.3 per cent on Monday after guiding to 'significantly lower' trading earnings than the previous quarter.
The two oil giants' outlook points to a downbeat quarter for the industry, which was already struggling to generate enough free cash to cover the dividends and share buybacks companies hiked after record earnings in 2022.
US President Donald Trump's trade war and larger-than-expected supply increases from Opec and its allies weighed on oil prices, while US and Israeli attacks on Iran only provided a temporary uplift.
ExxonMobil expects some respite from refining margins, which will add about US$300 million to earnings, the company said. The guidance only refers to market pricing and does not factor in operational performance such as changes to production or costs, the company said.
ExxonMobil's guidance is 'bang in line' with analysts' estimates for the second quarter, RBC Capital Markets analyst Biraj Borkhataria said in a research note. ExxonMobil 'has a much smaller trading organisation than its European peer Shell, and thus was not impacted by the same issues'. BLOOMBERG
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Business Times
2 hours ago
- Business Times
Armed with franchising experience from Popeyes, Fei Siong Group takes Encik Tan to Indonesia
[SINGAPORE] With experience gained from managing the local franchise of US fried-chicken chain Popeyes, Fei Siong Group is making its first foray overseas – by taking its hawker-cuisine brand Encik Tan to Indonesia. By end-December, the food and beverage (F&B) group will open its first outlets for Encik Tan and dim sum brand Pao Pao in Jakarta under a joint venture. Both brands have earned their halal certification. Subsequent Encik Tan outlets will be franchised, with Fei Siong aiming to open 100 stores in Indonesia by 2030. It may consider franchising Pao Pao, depending how the first kiosk performs. As Singapore's hawker scene becomes 'increasingly saturated', regional expansion and the Popeyes franchise will become the company's biggest growth drivers, said Fei Siong's founder and chairman, Tan Kim Siong. The next target is Malaysia. Fei Siong is in talks with partners to open its first Encik Tan outlet in Johor by Q3 2026, and its first in Kuala Lumpur in Q1 2027. The goal is to open 50 outlets in Malaysia in the next five years, and to double that by 2035. A NEWSLETTER FOR YOU Friday, 8.30 am SGSME Get updates on Singapore's SME community, along with profiles, news and tips. Sign Up Sign Up To further its various expansion plans, Fei Siong is seeking investors for growth-stage capital, with an initial public offering being possible down the road. Venturing overseas marks a new phase for Fei Siong, which celebrates its 30th anniversary this year. From a fishball noodle stall in 1995, it has grown into an F&B empire with 17 brands and more than 180 outlets. These brands include Nam Kee Pau, Eat, 85 Redhill Teochew Fishball Noodles and SG Hawker. The group also operates four hawker centres in Buangkok, Hougang, Woodleigh and Bukit Batok. Since 2021, revenue has grown 10 per cent annually, hitting S$210 million in FY2024. The group expects to make S$230 million in FY2025, and S$400 million in 2030. Encik Tan's outlet in Changi Airport Terminal 2, which opened in April. The halal-certified hawker-cuisine concept is among Fei Siong's 17 brands. PHOTO: FEI SIONG GROUP Taking a bite of the fast-food sector With experience gained from managing the Popeyes Singapore franchise, the group is now in a better position to head abroad, said Fei Siong's chief strategy officer Jedrick Tan, who is unrelated to the company's founder. The US fried chicken brand opened its first outlet here in 2001, under another franchisee. From 2009, the franchise belonged to Malaysian-based restaurant operator, Revenue Valley. In 2022, Fei Siong inked a franchise deal with Popeyes Louisiana Kitchen Asia-Pacific – a subsidiary of multinational fast food holding company Restaurant Brands International (RBI) – to develop and run new Popeyes outlets. This was Fei Siong's entry into the fast-food, quick-service restaurant (QSR) segment, its ticket to diversifying beyond hawker cuisine. It was also the group's first time in franchise management, as it owns the other F&B brands in its portfolio. In late 2023, Fei Siong acquired Singapore's remaining 10 Popeyes stores from Revenue Valley. With 11 outlets it opened, Fei Siong now runs 21 Popeyes outlets. Fei Siong Group founder and chairman Tan Kim Siong (second from left) with his brothers Tan Kim Leng (extreme left) and Tan Kim Beng (third from left), and New Mun Kit (extreme right). The latter three are directors of the group. PHOTO: TAY CHU YI, BT Managing an international QSR brand has taught the group how to operate outlets at scale, said Jedrick Tan, concurrently chief strategy officer and chief executive of Fei Siong FastFood (Popeyes PLK Singapore). The team has picked up valuable standard operating procedures relating to front- and back-of-house management, he said. One was RBI's 'structured and modular' kitchen workflow, which was implemented across all Popeyes Singapore outlets. He said: 'Quality control is key in a franchise. The workflow has to be standardised and broken down into a modular format, so franchisee partners can digest and execute it easily.' Another learning point was automation, picked up from Popeyes outlets having self-ordering kiosks and kitchen-display systems for efficiency. Fei Siong plans to introduce some of these best practices when franchising its own brands overseas. For instance, Encik Tan operates in Singapore as a 'mini food court' with multiple stalls. Overseas, its outlets will take a QSR format with a single central kitchen. 'The QSR format is more scalable for overseas expansion,' said Jedrick Tan. The food-court model has multiple point-of-sales systems, making it difficult to maximise productivity, he added. Giving Popeyes a makeover Today, the Popeyes franchise contributes 15 per cent of Fei Siong's topline. This is expected to grow to 25 per cent by 2032, with the group being on track to meeting its target of 50 Popeyes outlets by then, he said. Since taking over the franchise, Fei Siong has given the outlets a makeover with new layouts and a new colour scheme; the menu is constantly refreshed with, for example, limited-time offerings of fried chicken in local flavours such as salted egg and rendang. In May, the chain launched a breakfast series – a first for the Popeye's franchise in Asia – with items such as waffles with fried chicken; cereal chicken porridge; and pancakes. Popeyes Singapore launched a breakfast series in May, with items such as waffles with fried chicken; cereal chicken porridge; and pancakes. PHOTO: TAY CHU YI, BT Fei Siong also obtained RBI's approval to have a flexible 'food atrium' format for some Popeyes Singapore outlets in locations where Fei Siong's other brands share the space. There are five such outlets today, with the aim being to offer more variety. 'Not everyone wants to eat fried chicken for the day,' said Jedrick Tan. 'With this, customers can enjoy different offerings in the same dining area. Landlords see value in this too, when you give more value to your customers.' The group is now looking to secure the Popeyes master franchise rights for other regional markets, such as Malaysia. Fei Siong has obtained RBI's approval to have a flexible 'food atrium' format for some Popeyes Singapore outlets, where the group's other brands share the space. PHOTO: FEI SIONG GROUP Flying the Singapore flag high Fei Siong still retains its hawker focus, as reflected in its move to take Encik Tan and Pao Pao abroad. As Jedrick Tan put it: 'Our strength is still in local cuisine.' Indonesia was chosen as the first stop as its culinary scene has less overlap with Singapore's, with local delicacies such as laksa being harder to find there. Fei Siong aims to take its local delights to the West too – in frozen form. It has developed frozen meals for export to the United States, United Kingdom and Australia. These include Singaporean favourites such as fishball noodles and laksa. These meals may be sold under its SG Hawker brand in supermarkets or Asian mini-marts. In the future, Fei Siong may even open SG Hawker outlets in these markets, with a retail section for these meals. Said founder Tan: 'Our goal is to bring Singapore food culture to different parts of the world.'
Straits Times
2 hours ago
- Straits Times
Mexico sure it will strike deal with US to skirt tariffs
Sign up now: Get ST's newsletters delivered to your inbox Behind the scenes, work has been advancing between the Sheinbaum and Trump administrations. Mexico is projecting confidence that it will fend off a new set of 30 per cent tariffs that US President Donald Trump threatened on July 12 to impose in August, with talks already underway to avert the worst. After Mr Trump went public with his plan by posting on social media, Mexican President Claudia Sheinbaum noted in speeches near the northern border that every country has been getting a letter from Mr Trump as he implements global protectionist policies. Her team had already begun discussions with the US on July 11 and she was confident Mexico would get a deal. 'We've had some experience with these things for several months now,' Ms Sheinbaum said at a clinic opening in Ensenada, Baja California. 'And I think we're going to reach an agreement with the United States government.' Mexico-US relations have taken a bumpy turn since June, with increasing roundups of migrants by US agents, the border shuttered to livestock due to a screwworm infestation in Mexico , US Attorney-General Pam Bondi's reference to the neighbouring country as an adversary, and the financial strike by the US Treasury on three Mexican financial firms accused of aiding fentanyl traffickers. Mr Trump's letter threatened new tariffs on Mexico due to a lack of progress in challenging the country's drug cartels. Top stories Swipe. Select. Stay informed. Singapore Government looking at enhancing laws around vaping to tackle issue of drug-laced vapes in Singapore Singapore Why the vape scourge in Singapore concerns everyone Singapore I lost my daughter to Kpod addiction: Father of 19-year-old shares heartbreak and lessons Singapore Organised crime groups pushing drug-laced vapes in Asia including Singapore: UN Singapore Prison school to NUS: At 36, former drug abuser finds it's never too late to get a degree Singapore Driver arrested after 66-year-old woman dies in car crash at Geylang pasar malam Singapore Bland and boring? Some hospitals seek help from big names to enhance food menus for patients Asia Patriotism, peace and pain: The politics behind China's World War II narrative But behind the scenes, work has been advancing between the Sheinbaum and Trump administrations. Mexico is still in a favourable position relative to the rest of the world and its poised to benefit from protectionist US policies over the medium term, according to Bloomberg Economic's Felipe Hernandez. That outlook assumes the US does not apply the 30 per cent rate to goods that are compliant with the US-Mexico-Canada (USMCA) free trade agreement. That exception is part of the plan, but the situation remains fluid, a US official cautioned. Continuing the exclusion for both Mexico and Canada narrows the scope of Mr Trump's continental tariffs and would be a lifeline to sectors like the auto industry that rely heavily on the USMCA pact, which was renegotiated under Mr Trump's first term. Mexico and the US established a new binational working group on July 11 to address security, migration and economic issues, according to a statement posted on July 12 by Mexican Economy Minister Marcelo Ebrard on X. The first major task of the group will be to find an alternative to the tariffs and 'protect jobs on both sides of the border', the statement read. 'We told the group that this treatment is unfair and that we're not in agreement,' read the statement, jointly signed by the Economy and the Foreign Affairs ministries. The US president said the 30 per cent tariffs are separate from sectoral ones and could be raised if Mexico retaliates. 'Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground,' Mr Trump wrote. 'If Mexico is successful in challenging the Cartels and stopping the flow of Fentanyl, we will consider an adjustment to this letter.' On July 11, the son of Sinaloa drug cartel kingpin Joaquin 'El Chapo' Guzman Loera pleaded guilty to federal drug trafficking charges and agreed to cooperate with US prosecutors. The US has blamed the Sinaloa Cartel for leading the fentanyl trade, importing chemicals from China to make pills in Mexico and smuggle them into the US. On July 9, US Treasury extended a deadline that will cut off three Mexican financial firms from the US financial system for potentially aiding in money laundering from the fentanyl trade. The US praised Mexico's cooperation in the move. BLOOMBERG
Straits Times
2 hours ago
- Straits Times
Trump's dealmaker name on the line in high-stakes tariff talks
Sign up now: Get ST's newsletters delivered to your inbox It was US President Donald Trump's second extension since unveiling the tariffs in April. WASHINGTON - US President Donald Trump set out early in his second term to fulfill a decades-long desire of reshaping US trade with the world, but the main outcomes so far have been discord and uncertainty. The real estate tycoon, who has staked his reputation on being a consummate dealmaker, embarked on an aggressive strategy of punitive tariffs that his administration predicted could bring '90 deals in 90 days'. The score so far? Two. Three if you count a temporary de-escalation agreement with China. The 90-day deadline was due on July 9, with dozens of economies including the European Union, India and Japan facing tariff hikes without a deal. But days before it arrived, Mr Trump issued a delay to Aug 1. It was his second extension since unveiling the tariffs in April – reigniting the 'TACO Theory' that has gained traction among some Wall Street traders. The acronym coined by a Financial Times writer stands for 'Trump Always Chickens Out,' highlighting the president's inclination to roll back policies if markets turn sour. Top stories Swipe. Select. Stay informed. Singapore Government looking at enhancing laws around vaping to tackle issue of drug-laced vapes in Singapore Singapore Why the vape scourge in Singapore concerns everyone Singapore I lost my daughter to Kpod addiction: Father of 19-year-old shares heartbreak and lessons Singapore Organised crime groups pushing drug-laced vapes in Asia including Singapore: UN Singapore Prison school to NUS: At 36, former drug abuser finds it's never too late to get a degree Singapore Bland and boring? Some hospitals seek help from big names to enhance food menus for patients Asia Patriotism, peace and pain: The politics behind China's World War II narrative World US slaps 30% tariffs on EU and Mexico; EU warns of countermeasures Treasury Secretary Scott Bessent, part of Mr Trump's multi-leader trade team, has reportedly been a key advocate for the pauses. But the label has irked Mr Trump and he insisted on July 8 that the deadline had always been in August. 'I didn't make a change. A clarification, maybe,' he said at a cabinet meeting. This week, he published more than 20 letters dictating tariff rates to world leaders including in Japan, South Korea and Indonesia. 'We invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far,' he wrote. He also issued letters to the EU, Canada, Mexico and Brazil – although Brazil was not previously targeted by the steeper 'reciprocal' tariffs and Canada and Mexico face a separate tariff regime. The documents 'appear to be Trump's way of combatting the TACO label,' said Ms Inu Manak, a fellow for trade policy at the Council on Foreign Relations. 'He wants to show that he's not just kicking the can down the road on the deadline, but that he means business,' she told AFP. 'He's likely frustrated that there isn't a parade of deals coming in.' 'Politically complicated' 'The shift in his rhetoric from 'there is no cost – the foreigners pay the tariffs' to 'there is a short-term cost, but there will be a long-term gain' has put him in a more politically complicated position,' said Mr William Reinsch, senior adviser at the Center for Strategic and International Studies. Mr Trump has repeatedly claimed that foreign countries foot the bill for tariffs, although the reality is more complicated with US companies generally paying them. 'In the public's mind, the tariffs are the pain, and the agreements will be the gain,' said Mr Reinsch, a former US commerce official. He warned that without trade agreements, Americans could conclude Mr Trump's strategy was flawed and deem his tactics a failure. While the 90-deal goal was probably unrealistic, Mr Reinsch said, 'it's clear that three (UK, China, Vietnam) with only one actual text made public (UK) is too small.' Deflecting attention Meanwhile, Mr Trump has announced a 50 per cent levy on copper imports starting Aug 1. Commerce Secretary Howard Lutnick said officials would also conclude investigations into semiconductors and pharmaceuticals – which could lead to tariffs – at month-end. 'That timing is not coincidental – it lines up with the new deadline of Aug 1, adding more pressure and deflecting attention from any lack of deals that get made in that time frame,' Ms Manak said. Analysts believe Mr Trump's supporters will likely not pay much attention to trade talks unless the tariffs fuel inflation. 'Trade policy is not top-of-mind for the average voter,' said Ms Emily Benson, head of strategy at Minerva Technology Futures. She expects the Trump administration's focus on boosting US manufacturing and reinvigorating the defence industrial base means it could be willing to bear some political heat to achieve those objectives. But it is a delicate balance. Voters will likely pay more attention if Trump follows through on his August tariff threats, Ms Manak said. 'And we could see a negative market reaction as well, which would not go unnoticed.' AFP
