(Bloomberg) — Vodafone Group Plc kept its sales growing in the three months to March and pressed ahead with plans to bring in new investors for its wireless towers next year. The shares rose as much as 8.8%.Chief Executive Officer Nick Read said Vodafone’s go-it-alone strategy in the U.K. was still the right one, after rivals Liberty Global Plc and Telefonica SA announced a $39 billion merger of their British operations.The international mobile carrier reported organic service revenue growth of 1.6% in its financial fourth quarter, stronger than the 0.9% consensus of analyst estimates gathered by the company, and kept a final dividend of 4.5 euro cents.Key InsightsRead is trying to streamline the company’s operations and pay down debt after weak sales and heavy costs forced a surprise dividend cut a year ago. The coronavirus pandemic only adds to the challenge.Investors had been waiting to see if the virus might force another cut in shareholder payouts and disrupt Read’s plans to spin out the mast business, which analysts have valued at between 8 billion euros and more than 20 billion euros, depending on factors such as network sharing deals and debt.It said a separate company being created for its roughly 58,000 mobile masts was on track to sell or list a stake in early 2021, as it set out a new goal of 1 billion euros ($1.1 billion) in annual cost savings within three years.The mast sale, and sales growth, might still come unstuck. Vodafone said the economic impact of the pandemic in its markets is “likely to be significant.”“I believe the market remains structurally favorable to us,” Read told reporters on a call.Market ReactionVodafone shares were up 7.8% as of 10:03 a.m. in London, continuing a recovery that began in mid-March when they fell below 1 pound per share to a 23-year low. Until Tuesday’s bounce, the shares have been underperforming their industry peers this year.Of analysts surveyed by Bloomberg, 19 rated the stock a Buy, 5 a Hold and 2 a Sell.Get More“We are preparing for a potential IPO in early calendar 2021, and we are targeting to provide financial information at our interim results in November 2020,” the Newbury, England-based company said in its results statement Tuesday.Organic sales in Italy, Vodafone’s first major market to be hit by the virus, slid 3.7% in the quarter, slightly better than the 4.6% drop forecast by analysts. Spain fell 2.7%, beating the 5.5% forecast decline.The company also revealed writedowns of 1.7 billion euros for the year at its Spanish, Irish, Romanian and automotive units, citing competition in Spain and the economic turbulence caused by Covid-19.StatementNOTE: Vodafone cashflow could benefit from deferral of 5G spectrum auctions: BINOTE, May 7: Telefonica COO Says CTIL Could Still Be ‘Monetized’(Adds more on tower unit in second key insight, opening share gain)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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(Bloomberg) — Saudi Arabia’s state-controlled oil giant retained its massive dividend despite a 25% plunge in profit, and signaled it would keep spending in check as it braces for deeper damage from the oil crisis.Saudi Aramco, the world’s most valuable company, will pay a dividend of $18.75 billion for the first three months of 2020. That would leave it on track to meet its full-year goal of $75 billion, though the company didn’t specify if it was still committed to that number.The dividend is crucial for the kingdom, which holds about 98% of Aramco and is facing its worst financial turmoil in decades. On Monday, the government tripled value-added tax and cut bureaucrats’ allowances as it looks to rein in a fiscal deficit that could reach 13% of gross domestic product this year.At the time of Aramco’s record initial public offering in December, the dividend was a massive part of its appeal. But even back then, a stress test carried out by JPMorgan Chase & Co. showed that if oil fell to $40 a barrel and production was 9 million barrels a day, Aramco would only remain within its self-imposed borrowing target by cutting its dividend by 30% and slashing spending dramatically.Arab Light crude last month plunged to as little as $13.34 a barrel and the kingdom has pledged to cut output to just 7.5 million barrels a day in June.The price war started just as the first quarter was coming to an end, and the greatest impact of low prices will hit in the second quarter. That’s when benchmark prices turned negative in the U.S. and the OPEC+ alliance and others agreed to rein in production.“We retain significant flexibility to adjust expenditures and have considerable experience in managing the business through times of adversity,” Chief Executive Officer Amin Nasser said. “This resilience will enable us to continue delivering on our commitments to our shareholders.”Big Oil’s generous payouts have long been a key attraction for shareholders, but low prices are threatening them. Exxon Mobil Corp. froze its dividend for the first time in 13 years while slashing capital expenditure, and Royal Dutch Shell cut payouts for the first time since the Second World War.Crude TruceAramco’s income declined 25% year-on-year to 62.48 billion riyals ($16.6 billion) between January and March and refining swung to a loss before earnings and tax are included. Aramco continues to forecast between $25 billion and $30 billion of capital spending this year but expenditure for 2021 is under review, it said.It could generate about $133 billion for the government this year across royalties, taxes and dividends, according to Credit Suisse Group AG analyst Thomas Adolff. That’s “a far cry from what it had expected originally and insufficient to cover the original government budget,” he said in a research note.Saudi Arabia and Russia have called a truce in a crude-price war that erupted in March, with the former announcing a surprise cut on Monday that will see its output in June fall to the lowest in 18 years. Aramco also moved to prop up energy markets last week by raising prices for its customers.Even so, efforts to contain the pandemic by shuttering swaths of the world economy continue to weigh on crude, which has crashed more than 50% this year.Aramco has slashed spending as it focuses on protecting the promised shareholder payouts this year. The Dhahran-based company said in March that it would limit capital expenditure to $30 billion in 2020, down from previous plans to spend as much as $40 billion. As well as the dividend, major spending commitments include the first installment of a $69.1 billion acquisition of a stake in Saudi Basic Industries Corp. Aramco is buying 70% of the chemicals maker from the kingdom’s sovereign wealth fund.“Looking ahead to the remainder of 2020, we expect the impact of the Covid-19 pandemic on global energy demand and oil prices to weigh on our earnings,” Nasser said. “We continue to reinforce the business during this period by reducing our capex and driving operational excellence. Longer term we remain confident that demand for energy will rebound as global economies recover.”Aramco’s stock rose 0.5% to 31.05 riyals by 10:54 a.m. in Riyadh. It is down 12% this year, compared with a 55% drop in benchmark Brent crude. The company’s market value has declined from a peak of over $2 trillion to about $1.6 trillion, still almost $200 billion above that of Microsoft Corp., the second-biggest firm globally.(Updates throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Vodafone kept its dividend on Tuesday, bucking a corporate trend to cut or scrap payouts due to the coronavirus crisis, as the world’s second-biggest mobile operator met expectations with a 2.6% rise in full-year core earnings. The British company said a drop in international travel due to the virus pandemic had hit its revenues from roaming calls and that it expected customer spending to suffer from the economic downturn caused by the health crisis. Core earnings reached 14.9 billion euros ($16.1 billion) in the year ended March 31, with group revenue up 3% to 45.0 billion euros, driven by business in Europe.

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German insurer Allianz on Tuesday posted a 29% fall in net profit in the first quarter from a year earlier as the coronavirus outbreak slows business. The insurer had last month flagged the drop when it published preliminary figures, and it abandoned its profit target for the full year, blaming economic uncertainty amid the pandemic. Allianz is among a host of European insurers warning about their prospects as they face claims for business disruptions, canceled events and a lack of demand for car and travel insurance.

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(Bloomberg) — Elon Musk restarted production at Tesla Inc.’s only U.S. car plant, flouting county officials who ordered the company to stay closed and openly acknowledging he was risking arrest for himself and his employees.“I will be on the line with everyone else,” the chief executive officer said in a tweet Monday. “If anyone is arrested, I ask that it only be me.”After fending off a potentially costly defamation lawsuit and emerging with mild consequences from a court battle with the Securities and Exchange Commission last year, Musk, 48, seems emboldened to again try his luck with the law. The lead lawyer on Tesla’s lawsuit Saturday against California’s Alameda County over its reopening restrictions helped Musk beat the case brought by a cave diver he called a pedophile in 2018.This time around, Musk is doing battle over measures to contain a virus that he downplayed starting in January. After claiming Covid-19 wasn’t all that viral a disease, then calling panic about it “dumb” in March, he’s also theorized fatality rates are overstated, promoted the antimalarial drugs dubiously embraced by President Donald Trump and wrongly predicted that new cases would be close to zero by the end of April.‘Sad Day’Musk has been furious for weeks about restrictions that county officials placed on Tesla operations as part of their effort to slow the spread of the coronavirus. On Saturday, he threatened to pull the company’s headquarters out of California and move them along with future projects to Nevada or Texas. Tesla has roughly 20,000 employees in the San Francisco Bay area, about half of which are in Fremont.California Governor Gavin Newsom sought to ease tensions earlier Monday, saying that he believed Tesla would be able to begin operations as soon as next week.“It would be a sad day if the Fremont police walked into Tesla and arrested Elon Musk,” said Scott Haggerty, the county supervisor for the district in Alameda where Tesla’s Fremont plant is located. “The tweets that go back and forth are unfortunate, and we need to get to the table, talk our way through this and get people back to work in a safe manner.”The Musk-versus-Calfornia battle has come to represent the tense debate that’s playing out in states and counties across America over how fast businesses should be allowed to reopen. To Musk supporters, he’s a hero fighting back against unnecessary government intervention. To his detractors, he’s a reckless and impulsive leader who’s encouraging dangerous behavior that could set back efforts to quell the pandemic.“I don’t think Musk can just fly in the face of the local health order, which is more restrictive than the state’s,” said Haggerty, who has represented the region for 23 years.Conflicting EmailTesla told production workers before Musk’s tweet that it was getting back to work at the Fremont factory. Valerie Capers Workman, Tesla’s head of North American human resources, emailed production staff to notify them that their furlough ended Sunday and that managers will contact them within 24 hours with their start date and schedule. Those who aren’t comfortable returning to work can stay home on unpaid leave but may no longer be eligible for jobless benefits, she said.The email conflicted with remarks that Newsom made during the governor’s daily press briefing, which took place before Musk’s tweet. When asked about Tesla reopening its Fremont plant regardless of Alameda’s order, Newsom said he was unaware.“My understanding is they have had some very constructive conversations,” Newsom said. “My belief and hope and expectation is as early as next week, they will be able to resume.”Tesla sued the county over the weekend after it told the company it didn’t meet criteria to reopen. Newsom, who allowed manufacturing in parts of the state to restart May 8, said Monday that the county was allowed to enforce stricter rules around reopening. The health officers for Alameda and six other San Francisco Bay area counties and cities decided late last month to extend their restrictions on businesses through the end of May.‘Green Light’After Musk’s tweet, Alameda county health officials issued a statement saying Tesla’s Fremont plant was operating beyond what was allowed and that it hoped the company would “comply without further enforcement measures.” The county has been in an ongoing dialogue over employee health-screening procedures and said it will continue to review Tesla’s plans.Capers Workman told employees that the state had “given the green light for manufacturing to resume.”Musk tweeted over the weekend that Alameda’s refusal to let Tesla reopen the Fremont factory was “the final straw” and that he’d immediately move Tesla’s headquarters to Nevada or Texas.Newsom said Monday the state has a strong relationship with Tesla, calling it “a company that this state has substantively supported for now many, many years.” Musk then thanked the governor in a tweet.For all his bluster, Musk’s fortune has surged along with Tesla’s shares this year. His personal wealth has grown by $12.6 billion in 2020 to more than $40 billion, according to the Bloomberg Billionaires Index.“We have a culture in our state where these huge corporations run by billionaires ‘move fast and break things,’” Lorena Gonzalez, a California assemblywoman, tweeted Monday. “Rules. Orders. Laws. People. All without consequence.”(Updates with Musk’s earlier legal battles in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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