Latest news with #profitmargins
Times of Oman
13 hours ago
- Business
- Times of Oman
Falling commodity prices expected to boost profits of FMCG companies: Report
New Delhi: Fast-Moving Consumer Goods (FMCG) companies in India are likely to see an improvement in their profit margins in the first quarter of FY26, which is attributed to a broad-based decline in the prices of key agricultural and packaging commodities, according to a report by Antique Stock Broking Limited. Prices of several essential inputs have eased, which could benefit major players. During Q1FY26, most agri-commodity prices fell when compared to Q4FY25. This trend points to a moderation in year-on-year (YoY) inflation and offers relief to FMCG manufacturers, who have been grappling with high input costs over the past few quarters. Wheat, a staple raw material for several FMCG products, saw a price correction of 13 per cent on a quarter-on-quarter (QoQ) basis. Barley prices also dropped by 13 per cent QoQ, although they were still up 10 per cent YoY. A sharp decline in palm oil prices -- down 16 per cent QoQ -- was particularly notable, especially after the government reduced import duties on the product by 10 per cent at the end of May 2025. This move is expected to bring further downward pressure on prices in the near term. Packaging costs also trended lower during the quarter. High-Density Polyethylene (HDPE), used extensively in packaging, remained soft. Crude-based packaging inputs witnessed only a marginal 3 per cent increase in prices, a manageable rise for most companies. Among dairy inputs, Skimmed Milk Powder (SMP) rose slightly by 4 per cent QoQ, and liquid milk increased by just 1 per cent QoQ, marking a relatively stable pricing trend in dairy, which is crucial for food and beverage manufacturers. However, not all commodities followed this deflationary trend. Copra, a key input for coconut-based products and edible oils, emerged as an outlier. Overall, except for dairy and select inputs like copra and LLP, most commodity prices declined in the range of 2 per cent to 14 per cent. This downward trend is expected to provide significant cost savings for FMCG firms, allowing them to either protect their margins or pass on benefits to consumers in the form of price reductions.
Argaam
17-05-2025
- Business
- Argaam
Maharah sees better margins, holds 15% market share: CEO
Maharah Human Resources Co.'s profit margins in key segments were weighed down in the first quarter of 2025, CEO Abdulaziz Al-Kathiri told Argaam in an interview. The impact was due to intensified competition in the human resources market—particularly in individual services—along with the impact of the company's expansion strategy in the business sector, which aims to boost market share and retain strategic clients. These factors altogether hurt pricing levels and profit margins. Al-Kathiri explained that the decline in margins within the individual services segment during the first quarter was exceptional and was primarily ascribed to non-recurring seasonal costs. He emphasized that this impact is not expected to persist throughout 2025. Maharah has a promising growth strategy focused on reinforcing its leadership position and maintaining its market share, with expectations for improved profit margins in the upcoming periods—particularly in the individual segment (hourly service), which is witnessing significant growth that is expected to positively reflect on the company's profitability. Regarding the company's subsidiaries, Al-Kathiri stated that Maharah is currently working on evaluating suitable solutions to enhance their performance. He pointed out that the largest negative impact came from Nabd Logistics Services Co., which recorded losses in the first quarter. Following a comprehensive review, the recommendation was made to proceed with its liquidation. Additionally, efforts are underway to minimize potential losses in other subsidiaries with the goal of reaching a breakeven point, which would support the improvement of gross margin in the remaining periods of 2025. On market share, Al-Kathiri affirmed that Maharah continues to lead the human resources sector in terms of revenue and net profit, estimating the company's market share in the individual and business segments at between 13% and 15%. He noted that this is currently among the highest in the market, though subject to change depending on overall market growth. Below is the full interview: Q. What is your plan to address the losses recorded in certain segments, such as logistics? A. As part of its 2025 strategy, Maharah focuses on improving the performance and results of its subsidiaries. Since acquiring or establishing some of these companies, Maharah has implemented development plans to cut losses and maximize the value added of these investments, in a way that enhances the integration of products and services supporting the company's core activities. Maharah conducted a comprehensive study of the performance of its subsidiaries and affiliates, analyzing their financial results in light of current performance and future plans. This evaluation serves as a foundation for making strategic decisions regarding whether to continue or liquidate these businesses, if necessary. Recently, Maharah announced on Tadawul the liquidation of Nabd Logistics Services Co. after studying the feasibility of its continuation. This decision is considered a bold and positive step given the current results of the logistics sector. While the decision is not expected to have a material impact on Maharah, it will help alleviate the negative impact on its profitability resulting from Nabd's losses, which amounted to SAR 5.2 million in Q1 2025 and SAR 16 million in 2024. Q. How do you see demand for human resources and facilities management services in the second half of 2025? A. With the major government projects and the global events the Kingdom is preparing to host in the coming years—along with the pipeline of projects—demand in the human resources sector is expected to grow significantly, surpassing previous periods. Internally, intensive efforts are being made to expand market share. As for the facilities management sector, there has been an improvement in financial performance through reduced losses and lower general and administrative expenses. This improvement is attributed to the restructuring of contracts and current projects. The company also recently received a top-tier rating from a classification agency, which aims to enhance its opportunities to secure large-scale projects. Additionally, the company is entering new areas within the healthcare sector, such as medical equipment maintenance, as well as projects related to the petrochemical industry. The company is expecting to see growth starting from Q4 2025 and continuing into 2026.
Globe and Mail
16-05-2025
- Business
- Globe and Mail
Down 59%, Is UnitedHealth Group Stock a Buy on the Dip?
Over the past year, America's typically predictable health insurance industry has been exciting in ways that investors hardly appreciate. In a nutshell, healthcare expenses have been outpacing the monthly premiums that insurers collect. Rising utilization rates have affected the entire industry, but one company has been particularly bad at anticipating the trend. On May 13, UnitedHealth Group (NYSE: UNH) suspended its 2025 outlook and announced the immediate departure of CEO Andrew Witty. What happened to UnitedHealth stock? On May 15, shares of America's leading health insurance benefits manager fell to a level 59% below the peak they reached about six months earlier. The stock has collapsed because nobody seems to know just how bad utilization rates have become. When UnitedHealth Group reported first-quarter results on April 17, management adjusted its 2025 earnings outlook from a range between $28.15 and $28.65 per share down to a range between $24.65 and $25.25 per share. Management teams can and often do revise guidance from quarter to quarter. However, you almost never see a well-established business like UnitedHealth Group walk back guidance less than a month after providing it. In an unusual conference call on May 13, UnitedHealth suspended earnings guidance without providing any revised figures. The company's President and CFO John Rex highlighted the main issues that are squeezing profit margins. First, the health status of new members isn't as robust as hoped. In April, the company said it expected to serve 650,000 new value-based care patients. Rex's remark suggests these patients are getting a lot more value than UnitedHealth had intended. Rex also complained that utilization within the company's Medicare Advantage program had accelerated even further than previously anticipated. He didn't go into specifics but said the trend is broadening to other areas. Reasons to buy now We don't know how low the next earnings-guidance revision will go but can be fairly confident that UnitedHealth Group's bottom line will return to growth over the next few years. It mis-priced premiums for 2025, but its customers can expect a bigger monthly bill in 2026. Management is already incorporating the higher costs it's been experiencing into 2026 Medicare Advantage bids that are due in June. Most Americans don't get to decide which insurance company receives over $1,000 per month in premiums from them and their employers. For employers who do have options, though, UnitedHealth's integrated-care strategy can offer savings that its smaller, less-integrated competitors can't match. In 2023, United Health's Optum Health employed around 10% of America's physicians. It's been a while since management shared this figure, but it's likely the largest employer of physicians in the country. Optum RX, its pharmacy benefits management business, is one of the three largest, which gives it a very strong position from which to negotiate. Shares of UnitedHealth Group have been beaten down to the ultra-low valuation of just 10.7 times trailing earnings. Unfortunately, Earnings could go down to a shockingly low figure this year, but this likely isn't a permanent situation. Passing heightened-care expenses to consumers by raising premiums and deductibles is nothing new for this company. With its stock price severely depressed, UnitedHealth Group's typically minuscule dividend yield has risen to 3.3% at recent prices. The company raised its payout by 320% over the past decade. Dividend payout raises in 2025 and 2026 might be smaller than usual, but maintaining the payout probably won't be an issue. Even if 2025 earnings shrink by half, there would be more-than-enough profit to support a dividend currently set at an annualized $8.40 per share. Management didn't provide forward-looking guidance for 2025 but believes it can reliably generate earnings growth at a double-digit percentage over the long run. Even if earnings only creep forward by a mid-single-digit percentage, an investment at these beaten-down prices could lead to market-beating gains for patient investors. Should you invest $1,000 in UnitedHealth Group right now? Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Reuters
13-05-2025
- Business
- Reuters
Australia business activity soft in April amid global trade unease
SYDNEY, May 13 (Reuters) - Australian business activity stayed subdued in April as rising costs squeezed profit margins, a survey showed on Tuesday, while firms shied away from fresh investment amid uncertainty over U.S. trade policy. National Australia Bank's survey showed its index of business conditions edged down 1 point to +2 in April, well below the long-run average. Its confidence index inched up a point to a still weak -1. The survey was taken at the end of April when markets had managed to stabilise in the wake of U.S. President Donald Trump's tariff shock of April 2. Sentiment could improve further with the U.S. and China on Monday lowering their tariffs in a 90-day truce. The survey showed its sales index held relatively steady at +5 in April, as did employment at +4. However, profitability dived 4 points to -4 as higher purchase costs pressured margins. There was also a notable 6 point drop in the capital spending index to a below average +1, suggesting firms were putting off investment plans until the outlook for the global economy became clearer. That uncertainty is one reason markets are wagering the Reserve Bank of Australia will cut interest rates again when it meets on May 20, which could also help support sentiment.
