- Alibaba Posts Strong Sales Growth Amid SEC Accounting Probe
Alibaba recorded better than expected profits and revenues in its third quarter as the Chinese ecommerce group played down concerns about China’s flagging economy and an ongoing investigation, ahead of the annual Singles Day online shopping spree.
The company said that preparations for Singles Day on November 11, the world’s largest online shopping day, have not been affected by an investigation into its accounting practices by the US Securities and Exchange Commission disclosed in May.
Among its questions, the SEC has asked about the large unaudited numbers Alibaba publishes on sales on Singles Day, which analysts took to mean the measure it uses for total sales across its platforms, gross merchandise value.
Alibaba did not report gross merchandise value in the second quarter for the first time, but during a conference call with analysts on Wednesday, Daniel Zhang, chief executive, said that “GMV so far looks good and growth is on track”.
Joe Tsai, Alibaba executive vice-chairman, also told analysts that there was “no factual basis” to a story in the New York Post newspaper alleging that a high-level whistleblower was helping the SEC in its investigation. The SEC has said that its investigation did not mean Alibaba had breached any laws.
Shares in the group initially climbed more than 4 per cent in pre-market trading in New York but dropped lower after the market opened.
Alibaba said sales in the quarter to the end of September rose 55 per cent to Rmb34.3bn ($5.1bn) compared with the year before, topping Wall Street estimates of Rmb33.9bn. Earnings per share on an adjusted basis rose to Rmb5.26 from Rmb3.61 a share a year ago, which beat expectations of Rmb4.69.
Alibaba makes its money through selling space to merchants on its marketplaces, in the form of fees and advertising revenues. Alibaba’s revenues growth has continued to be strong, despite an economic slowdown across China, mainly from a 47 per cent increase in online marketing services revenues, the group said.
In the period Alibaba reported 439m annual active buyers, a rise of 14 per cent compared with last year.
“We operate a superior marketplace,” said Mr Tsai, adding that Alibaba has fewer limits than its competitors on the amount of advertising load that consumers will accept on an ecommerce website.
“There is no church and state when it comes to content and ads, because they come to the site with very high commercial intent,” he said.
He also cited technological advances in using data to increase click-through rates.
“Our ability to personalise every single user interface, so every person coming to the platform can see different products, and different recommendations; that drastically increases our ability to generate relevant clicks … and drive volumes,” said Mr Tsai.
Net income dropped to Rmb7.1bn, from Rmb22.7bn, the company said, blaming the fall on a large non-cash revaluation gain last year from its interest in Alibaba Health.
Alibaba said that revenue rose 41 per cent in its core ecommerce business to Rmb28.5bn. Meanwhile, its cloud computing unit notched sales growth of 130 per cent to Rmb1.5bn.
Mr Zhang added: “Beyond the strong performance of our core commerce business, we are pleased with the continued rapid growth of our cloud computing business. We also see huge potential in our newly integrated digital media and entertainment unit.”
Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns
Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.
Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.
The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.
This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.
While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.
Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.
Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.
Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.
Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.
Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.
Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.
The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.
However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.
Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.
He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.
Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.
The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.
NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade
The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.
Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.
Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.
In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.
Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.
He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.
Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.
In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.
Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.
The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.
As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.
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