Author: Consultant

Air Transat to borrow $100-million in federal government emergency loans

Money-losing airline Transat A.T. Inc. has secured another government loan to stay afloat.

Montreal-based Transat TRZ-T unchno change will borrow $100-million from the federal government’s Canada Enterprise Emergency Funding Corp. (CEEFC) on top of the $743-million it borrowed since 2021.

Transat said the agreement announced on Friday includes an additional line of credit worth $50-million, contingent on the airline raising another $50-million from a third party. Transat also said its lenders have agreed to defer credit deadlines by one year to April, 2024, and to push back certain financial conditions until October, 2023.

Annick Guérard, Transat’s chief executive officer, said in a press release that the arrangements will bolster the airline’s financial position. “This important financing milestone, combined with sales that have been doing well in recent months, will give us the financial flexibility to deploy our strategic plan with optimism and confidence,” Ms. Guérard said.

CEEFC provides the emergency loans, known as the Large Employer Emergency Financing Facility (LEEFF), to prop up companies that saw sales plunge because of the pandemic. Recipients must commit to minimizing job losses, eliminating dividends and share buybacks, and cap executive compensation.

Eighty per cent of the five-year loan comes with an interest rate of 5 per cent for the first year, 8 per cent for the second year and a 2-per-cent increase every year that follows. Transat and other recipients also had to issue warrants that give the government the right to purchase as much as 15 per cent of the company’s shares.

Transat is the only company to have applied for LEEFF aid in the past year, and the loan program is closed as of July 29, said Canada Enterprise Emergency Funding. “As a result of the first LEEFF loan to Transat in April, 2021, thousands of Canadian jobs have been protected and the company has been able to maintain its operations,” the lender said.

Seven companies received LEEFF loans, including Air Canada, Sunwing Vacations Ltd., Porter Airlines and Goodlife Fitness Centres Inc. Air Canada was the biggest borrower, approved for $1.4-billion to provide refunds to customers whose flights were cancelled in the pandemic. Air Canada, in late 2021, terminated a credit facility worth $3.975-billion. The government also invested $500-million in Air Canada at $23.18 a share. Air Canada’s shares traded at about $17.20 on Friday.

In the most recent quarter, ending on April 30, Transat lost $98-million, or $2.60 a share, compared with a loss of $69-million, or $1.84 a share, a year earlier.

Revenue rose to $358.2 million compared with $7.6-million in the year-ago period as travellers shrugged off pandemic worries and returned to the skies. However, Transat continued to burn through cash at a rate of $3-milion a month.

Enbridge Declares Quarterly Dividends

Enbridge Inc. (TSX:ENB.TO) (NYSE:ENB) (Enbridge or the Company) announced that its Board of Directors has declared a quarterly dividend of $0.860 per common share, payable on September 1, 2022 to shareholders of record on August 15, 2022. The amount of the dividend is consistent with the June 1, 2022 dividend. 

Read more at newswire.ca

Xi is expected to face major economic challenges when he enters an unprecedented third term

• President Xi Jinping will need to confront China’s major economic challenges after he secures a widely expected unprecedented third term in office, according to veteran investor David Roche.
• He said Xi will very likely “sail through” his confirmation for another five years term, without any “real resistance to him at senior levels of the communist party” in the upcoming National Congress Community party meeting.
• “He faces a lot of challenges. Not only the external challenges of Taiwan, which is certainly not getting any closer to China, but he faces the economic challenges,” said Roche, president and global strategist at Independent Strategy.

President Xi Jinping will need to confront China’s several major economic challenges after he secures a widely expected unprecedented third term in office, according to veteran investor David Roche.

Roche said Xi will very likely “sail through” his confirmation as China’s top party chief in the upcoming National Congress meeting, which sets the stage for him to secure another five-year term as the country’s leader.

There won’t be any “real resistance to him at senior levels of the communist party,,” he added at the Congress party meeting due to be held later this year.

“He faces a lot of challenges. Not only the external challenges of Taiwan, which is certainly not getting any closer to China, but he faces the economic challenges,” Roche, president and global strategist at Independent Strategy, told CNBC’s “Squawk Box Asia” on Thursday.

China’s economy is slowing down with growth likely to settle around 3% to 4%, he said, adding it’s ″partly conditioned by the legacy problems of debt and bad assets and partly conditioned by demography and very poor productivity.”

China’s growth weakens

China economy grew a weak 0.4% in the second quarter compared to a year ago, which brought growth for the first half of the year to 2.5% — making it difficult to reach the official full-year target of around 5.5%, according to analysts.

On Tuesday, the International Monetary Fund slashed its growth forecast for China. The fund expects the world’s second-largest economy to grow 3.3% in 2022 — its lowest clip in four decades, barring the initial fallout from the Covid-19 crisis in 2020.

Goldman Sachs has also cut its forecast for the MSCI China index due to a worsening slump in China’s property market. The investment bank slashed its earnings outlook for the index to zero growth for the year, down from 4% previously.

Roche said China’s economy is struggling with “enormous real estate problem and banking problems.”

If [Xi Jinping] is going to complete his term in office, he has to make real progress on … social peace. And I think it’s a big, big challenge.

David Roche

INDEPENDENT STRATEGY

“You’ve seen it in people trying to get their deposit back. You see it in people refusing to pay their mortgages, which is hitting at the very concept of common prosperity, which is [Xi’s] main ticket,” he added.

Xi initiated the concept of “common prosperity” last year, which is generally understood as moderate wealth for all, rather than just a few. But it remains a vague, frequently used slogan.

Xi’s vision for the next term

On Wednesday, China’s state broadcaster CCTV reported Xi made comments in a special two-day meeting in Beijing, in which he laid out his vision for “the next five years.”

Xi reportedly said the Communist Party of China’s congress meeting will offer “two-stage strategic plan for China’s drive to build a great modern socialist country in all respects, and will in particular lay out plans for the strategic missions and major measures in the next five years.”

“Xi called for efforts to focus on tackling unbalanced and inadequate development, and work on new ideas and measures to address problems,” the broadcaster said.

There is no doubt Xi will get confirmed, said Roche, “but if he is going to complete his term in office, he has to make real progress on … social peace. And I think it’s a big, big challenge.”

Oil prices rise on tight supply as attention turns to OPEC+ meeting

• Oil prices gained about $1 in early trade on Friday, lifted by supply concerns and a weaker U.S. dollar as attention turns to what OPEC and allies including Russia agree at a meeting next week marking the end of their 2020 output reduction pact.
• U.S. West Texas Intermediate (WTI) crude futures for September delivery rose $1.09, or 1.1%, to $97.51 a barrel by 0041 GMT, reversing losses from the previous session when sentiment was hit by fears of a recession in the United States.
• Brent crude futures for September settlement, due to expire on Friday, rose 86 cents, or 0.8%, to $108.00 a barrel.

https://www.cnbc.com/2022/07/29/oil-prices-supply-opec-covid-russia-production.html

CANADIAN UTILITIES REPORTS SECOND QUARTER 2022 EARNINGS

CALGARY, AB, July 28, 2022 /CNW/ – Canadian Utilities Limited (TSX:CU.TO) (TSX:CU-X.TO)

Canadian Utilities Limited (Canadian Utilities or the Company) today announced second quarter 2022 adjusted earnings of $136 million ($0.51 per share), $21 million ($0.08 per share) higher compared to $115 million ($0.43 per share) in the second quarter of 2021.

Read more at newswire.ca

ATCO REPORTS SECOND QUARTER 2022 EARNINGS

CALGARY, AB, July 28, 2022 /CNW/ – ATCO Ltd. (TSX:ACO-X.TO) (TSX:ACO-Y.TO) 

ATCO Ltd. (ATCO or the Company) today announced second quarter 2022 adjusted earnings of $92 million ($0.81 per share), $12 million ($0.11 per share) higher compared to $80 million ($0.70 per share) in the second quarter of 2021.

Read more at newswire.ca

ALTAGAS ANNOUNCES SECOND QUARTER 2022 RESULTS

Newswire.ca – Thu Jul 28, 5:00AM CDT

AltaGas Delivers Solid Second Quarter Results; Strategic Initiatives and Continued Execution of its Long-term Plan Drive Shareholder Value Creation

CALGARY, AB, July 28, 2022 /CNW/ – AltaGas Ltd. (“AltaGas” or the “Company”) (TSX:ALA.TO) today reported second quarter 2022 financial results and provided an update on the Company’s operations

Read more at newswire.ca

TC Energy Second-Quarter Profit Down As It Reaches Milestone With Coastal GasLink LP

TC Energy Corp. posted a lower quarterly profit as its Coastal GasLink project reaches a “significant milestone.”

The Calgary-based energy producer says its net income attributable to shareholders was $889 million or 90 cents per diluted share in the second quarter, down from $975 million or $1 per share a year earlier.

The pipeline operator’s comparable earnings were $979 million or $1 per common share, down from $1.04 billion or $1.06 per share in the same period of 2021.

Revenue for the three months ended June 30 increased to $3.64 billion from $3.18 billion during the same quarter last year.

TC Energy’s president and CEO François Poirier says the pipeline company has reached a significant milestone with Coastal GasLink LP, signing revised agreements with LNG Canada that will allow the safe and timely execution of its largest LNG-linked project.

He says the 670-kilometre project is about 70 per cent complete, with mechanical in-service expected by the end of 2023.

“Together with LNG Canada, this project will provide the first direct path for Canadian natural gas to reach global LNG markets,” Poirier says.

“By leveraging our competitive strengths, we continue to develop solutions to move, generate and store the energy North America relies on in a secure and increasingly sustainable way.”

This report by The Canadian Press was first published July 28, 2022.

Intact Financial Corporation Reports Q2-2022 Results

TORONTO, July 28, 2022 /CNW/ –  (TSX:IFC.TO)

Highlights

Charles Brindamour, Chief Executive Officer, said:

“We delivered strong results in Q2-2022 with contribution from all segments. In the one year since the close of the RSA acquisition, we have achieved $175M in run-rate synergies and greatly strengthened our Canadian and specialty lines platforms. We remain optimistic about the growth opportunities across our business and particularly in specialty lines. We expect that our disciplined underwriting and deep claims expertise will continue to be assets in navigating inflation pressures, climate change and evolving driving patterns.”Read more at newswire.ca