Author: train2invest Admins

Consulting firm CGI reports fourth-quarter profit and revenue up from year ago

CGI Inc. GIB-A-T +0.24%increase says it earned a fourth-quarter profit of $362.4-million, up from $345.9-million in the same quarter last year as its revenue rose eight per cent compared with a year ago.

The business and technology consulting firm says the profit amounted to $1.51 per diluted share for the quarter ended Sept. 30, up from a profit of $1.39 per diluted share in the same quarter last year.

Revenue for the three-month period totalled $3.25-billion, up from $3.01-billion a year earlier.

The company says its revenue was up 13.9 per cent compared with a year ago, when excluding $177.9-million of unfavourable foreign currency impact.

Excluding specific items, CGI says it earned $1.56 per diluted share in its latest quarter, up from $1.40 per diluted share in its fourth quarter last year.

Analysts on average had expected a profit of $1.55 per share and nearly $3.21-billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.

BMO to take billion-dollar charge after losing Ponzi lawsuit in U.S.

A jury in a Minnesota bankruptcy court has found the U.S. arm of Bank of Montreal BMO-T -1.16%decrease liable for US$564-million in damages in a lawsuit related to one of the largest Ponzi schemes in history, and the bank will take a $1.1-billion charge as it prepares to appeal the decision.

In a verdict reached on Tuesday, the jury held BMO Harris Bank N.A. – the U.S. subsidiary of BMO – liable for “aiding and abetting breach of fiduciary duty,” according to a court filing.

It awarded US$484-million in compensatory damages as well as nearly US$80-million in punitive damages in favour of the trustee in bankruptcy proceedings for companies controlled by Thomas Joseph Petters, who was convicted in 2008 of leading a nearly $2-billion fraud and was a client of a bank later acquired by BMO.

The trustee is trying to recover money for victims of the fraud. The compensatory damages were about one quarter of the US$1.9-billion that the trustee had sought.

BMO’s $1.1-billion charge includes the interest payments it may have to pay on the judgment. The exact amount will be decided later by a judge.

The jury found BMO was not liable on three other counts that included alleged violations related to fiduciary duties, as well as aiding and abetting fraud.

BMO said in a written statement that it is disappointed with the ruling, “which is not supported by the evidence or the law,” and the bank “intends to pursue all available legal options including appealing the jury verdict and award.” The bank also said that according to the terms of a prior settlement in another Petters-related case, “BMO Harris is entitled to recover approximately 21 per cent of any amount that it pays to the trustee.”

“We are confident that we have strong grounds for appeal,” the statement said.

The lawsuit began in 2012 and alleged that Milwaukee-based Marshall and Ilsley Bank, which BMO acquired in 2011, and a predecessor bank facilitated a Ponzi scheme run by Mr. Petters between 1999 and 2008. Mr. Petters was revealed to have been running a US$1.9-billion fraud over a 15-year span – at the time, the largest Ponzi scheme in history, but later surpassed by a fraud led by Bernie Madoff. Mr. Petters was convicted and sentenced to 50 years in federal prison.

As plaintiff in the lawsuit, the trustee argued that M&I facilitated the Ponzi scheme, standing by as Mr. Petters moved tens of millions of dollars in and out of his corporate and personal accounts. The pattern of money movement was wholly inconsistent with what M&I understood to be the business model of Mr. Petters’s companies, the trustee alleged in the lawsuit.

Michael Collyard, a lawyer at Robins Kaplan LLP acting for the trustee, said it will also seek prejudgment interest that could bring the total award to more than US$1-billion if its arguments are successful. Mr. Collyard intends to seek 10-per-cent annual interest, which he says is allowed by Minnesota law.

As a result, BMO will record a provision of $1.12-billion that includes possible prejudgment interest as well as potential recoveries, which will result in an after-tax charge of $830-million to be recorded when the bank releases its fiscal fourth-quarter financial results this month.

“We are extremely pleased with the jury’s decision to hold BMO Harris Bank accountable for its role,” Mr. Collyard said in an e-mailed statement. “This is a fantastic result for the trust pursuing recovery for the people who lost money in this fraud.”

Mr. Collyard also said he believes the award is the largest in a civil case in Minnesota’s history.

BMO went to trial last month after getting sanctioned by a judge for intentionally destroying and failing to preserve evidence.

Judge Kathleen Sanberg ruled in July, 2019, that M&I destroyed computer backup tapes in 2010 and 2011 that likely contained documents and memos sent between its bankers and Mr. Petters. In 2014, BMO Harris Bank employees found some tapes that might have contained evidence – but then falsely told the court all tapes were gone, according to the judge.

BMO Harris Bank, the judge ruled, “has failed to be candid and has fought discovery at every step … has lied to this court and has attempted to hide evidence on several occasions.”

Her ruling allowed the jury to hear about the evidence destruction.

China’s trade unexpectedly shrinks in October as COVID-19 curbs, global slowdown jolt demand

China’s exports and imports unexpectedly contracted in October, the first simultaneous slump since May 2020, as a perfect storm of COVID-19 curbs at home and global recession risks dented demand and further darkened the outlook for a struggling economy.

The bleak data highlight the challenge for policy-makers in China as they press on with pandemic prevention measures and try to navigate broad pressure from surging inflation, sweeping increases in worldwide interest rates and a global slowdown.

Outbound shipments in October shrank 0.3 per cent from a year earlier, a sharp turnaround from a 5.7 per cent gain in September, official data showed on Monday, and well below analysts’ expectations for a 4.3 per cent increase. It was the worst performance since May 2020.

The data suggest demand remains frail overall, and analysts warn of further gloom for exporters over the coming quarters, heaping more pressure on the country’s manufacturing sector and the world’s second-biggest economy grappling with persistent COVID-19 curbs and protracted property weakness.

Chinese exporters weren’t even able to capitalize on a prolonged weakening in the yuan currency since April and the key year-end shopping season, underlining the broadening strains for consumers and businesses worldwide.

The yuan on Monday eased 0.4 per cent from a more than one-week high against the dollar reached in the previous session, as the weak trade data and Beijing’s vow to continue with its strict zero-COVID strategy hurt sentiment.

“The weak export growth likely reflects both poor external demand as well as the supply disruptions due to COVID outbreaks,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, citing COVID-19 disruptions at a Foxconn factory, a major Apple supplier, as one example.

Apple Inc said it expects lower-than-anticipated shipments of high-end iPhone 14 models following a key production cut at the virus-blighted Zhengzhou plant.

“Looking forward, we think exports will fall further over the coming quarters … We think that aggressive financial tightening and the drag on real incomes from high inflation will push the global economy into a recession next year,” said Zichun Huang, economist at Capital Economics.

Growth of auto exports in terms of volume also slowed sharply to 60 per cent year-on-year from 106 per cent in September, according to Reuters calculations based on customs data, reflecting a transition from demand for goods to services in major economies.

Overall exports to China’s major markets of the United States and European Union also slumped in October, off 12.6 per cent and 9 per cent year-on-year, respectively.

Almost three years into the pandemic, China has stuck to a strict COVID-19 containment policy that has exacted a heavy economic toll and caused widespread frustration and fatigue.

Feeble October factory and trade figures suggested the economy is struggling to get out of the mire in the last quarter of 2022, after it reported a faster-than-anticipated rebound in the third quarter.

The Ukraine war, which sparked a surge in already high inflation globally, has added to geopolitical tensions and further dampened business activity.

Chinese policy-makers pledged last week to prioritize economic growth and press on with reforms, easing fears that ideology could take precedence as President Xi Jinping began a new leadership term and disruptive lockdowns continued with no clear exit strategy in sight.

Tepid domestic demand, partly weighed down by fresh COVID-19 curbs and lockdowns in October, hurt importers.

Inbound shipments declined 0.7 per cent from a 0.3 per cent gain in September, below a forecast 0.1 per cent increase, marking the weakest outcome since August 2020.

The harsh impact on demand from strict pandemic measures and a property slump was also highlighted in a broad range of Chinese imports; purchases of soybeans declined to eight-year-lows last month while copper imports fell and coal imports slackened after hitting a 10-month high in September.

On top of the global slowdown, frail domestic consumption will put more strain on China’s economy for a while yet, analysts say.

“Insufficient domestic demand is the main constraint on China’s short-term recovery and long-term growth trajectory,” said Bruce Pang, chief economist at Jones Lang Lasalle.

China’s crude oil imports in October rebound amid new refinery rollouts

China’s crude oil imports in October rebounded to the highest level since May, up 14 per cent from a low base a year earlier in their first annual growth in five months, data showed on Monday, as two greenfield refineries prepared to start operations.

The world’s largest crude importer brought in 43.14 million tonnes of crude oil last month, equivalent to 10.16 million barrels per day (bpd), according to data from the General Administration of Customs.

The October imports were up from September’s 9.8 million bpd.

The rebound came as PetroChina started trial production at a 200,000-barrel-per-day crude unit at its newly-built refinery in Guangdong, while privately controlled Shenghong Petrochemical also got ready to officially launch its 320,000-bpd plant in Jiangsu province.

Refiners also took advantage of a slide in global crude prices to replenish stocks, hauling in cargoes from the Americas and the Middle East.

Imports for the first 10 months of the year totalled 413.53 million tonnes, or about 9.93 million bpd, 2.7 per cent below the corresponding period last year.

Spurred by Beijing’s abrupt release of a large number of export quotas, companies shipped overseas 4.456 million tonnes of refined fuel last month, up 13 per cent from a year before, data showed.

However, year-to-date exports remained 24.5 per cent below year-earlier levels at 39.91 million tonnes, due to a broad curb on fuel exports earlier in the year.

Natural gas imports last month via pipelines and as liquefied natural gas (LNG) sank to the lowest level in two years at 7.61 million tonnes, after a brief spike the previous month ahead of the winter heating season.

Year-to-date imports remained 10.4 per cent lower than a year earlier at 88.73 million tonnes, because of steep declines in LNG imports as companies slashed costly spot purchases.

While predicting slower demand growth this winter, national energy firms prioritized domestic production and boosted imports of pipeline gas from Russia and Central Asia.

Canada’s Summit Industrial REIT, a major warehouse owner, sold to Singapore’s sovereign wealth fund for $4.5-billion

GIC, Singapore’s giant sovereign wealth fund, is swooping into Canada to acquire Summit Industrial Income REIT SMU-UN-T +25.93%increase for $4.5-billion, more proof that warehouse properties in major urban centres such as Toronto and Montreal are some of the hottest real estate to own anywhere in the world.

GIC’s acquisition, announced Monday, is structured as a joint venture with Dream Industrial REIT DIR-UN-T +4.23%increase, split 90 per cent and 10 per cent, respectively. Together, they are paying $23.50 in cash per Summit unit, a 31 per cent premium to Friday’s closing price.

Canada’s industrial warehouse owners are enjoying some of the strongest business fundamentals across all classes of real estate. The market for domestic warehouse is so strong that the national vacancy rate has fallen to a record low of 1.6 per cent, according to commercial real estate services and investment firm CBRE Group Inc. Supply of properties is so tight that some landlords have been able to raise rents more than 100 per cent in tenant turnovers and lease renewals.

However, publicly-traded industrial REITs have struggled of late because the e-commerce boom has taken a hit, with major online platforms such as Amazon and Shopify warning that the pandemic gains were an anomaly and are starting to reverse.

Interest rates have also jumped and continue to climb higher, which makes commercial mortgages more expensive. Incessant inflation has also sent development costs soaring.

At the same time, higher rates give investors more options to earn similar – or better – yields. One-year guaranteed investment certificates, for instance, now pay close to 5 per cent annually. Summit Industrial REIT’s units paid a 3.2 per cent annual distribution yield as of Friday’s market close.

The headwinds have spooked many public investors and REITs of all stripes have been trading at deep discounts to their net asset values. As of Friday, Summit’s units were trading for $17.93 a piece, below analysts’ average calculation of the REIT’s net asset value, which was $19.66 per unit.

Summit Industrial exclusively owns Canadian warehouses and its units had dropped 21 per cent in 2022 before the acquisition announcement. Yet when the REIT last reported quarterly earnings, in August, management disclosed that its average rent increase this year when a lease was renewed or in a tenant turnover was 46 per cent. As well, the national average rental rate across all Canadian industrial warehouses rose to a record high of $12.25 per square foot. Five years ago, it was less than $7.

Summit isn’t the first Canadian industrial warehouse owner to be acquired by a global institutional investor. In 2018, Blackstone Group acquired Pure Industrial Real Estate Trust for $2.48-billion.

If the Summit takeover is approved by unitholders, Dream Unlimited, a holding company run by Dream Industrial founder Michael Cooper, will serve as the asset manager for the joint venture. In a news release, Dream said it will keep “the majority of Summit employees” after the deal closes.

Twitter launches $7.99 monthly subscription with blue verification check mark

Twitter has announced a subscription service for $7.99 a month that includes a blue check now given only to verified accounts as new owner Elon Musk works to overhaul the platform’s verification system just ahead of U.S. midterm elections.

In an update to Apple iOS devices available in the U.S., Canada, Australia, New Zealand and the U.K., Twitter said users who “sign up now” for the new “Twitter Blue with verification” can receive the blue check next to their names “just like the celebrities, companies and politicians you already follow.”

But Twitter employee Esther Crawford tweeted Saturday that the “new Blue isn’t live yet – the sprint to our launch continues but some folks may see us making updates because we are testing and pushing changes in real-time.” Verified accounts did not appear to be losing their checks so far.

It was not immediately clear when the subscription would go live, and Crawford did not immediately respond to a message to clarify the timing. Twitter also did not immediately respond to a message for comment.

Anyone being able to get the blue check could lead to confusion and the rise of disinformation ahead of Tuesday’s elections, but Musk tweeted Saturday in response to a question about the risk of imposters impersonating verified profiles – such as politicians and election officials – that “Twitter will suspend the account attempting impersonation and keep the money!”

“So if scammers want to do this a million times, that’s just a whole bunch of free money,” he said.

But many fear widespread layoffs that began Friday could gut the guardrails of content moderation and verification on the social platform that public agencies, election boards, police departments and news outlets use to keep people reliably informed.

The change will end Twitter’s current verification system, which was launched in 2009 to prevent impersonations of high-profile accounts such as celebrities and politicians. Twitter now has about 423,000 verified accounts, many of them rank-and-file journalists from around the globe that the company verified regardless of how many followers they had.

Experts have raised grave concerns about upending the platform’s verification system that, while not perfect, has helped Twitter’s 238 million daily users determine whether accounts they get information from are authentic. Current verified accounts include celebrities, athletes and influencers, along with government agencies and politicians worldwide, journalists and news outlets, activists, businesses and brands, and Musk himself.

“He knows the blue check has value, and he’s trying to exploit it quickly,” said Jennifer Grygiel, an associate professor of communications at Syracuse University and an expert on social media. “He needs to earn the trust of the people before he can sell them anything. Why would you buy a car from a salesman that you know has essentially proved to be chaotic?”

The update Twitter made to the iOS version of its app does not mention verification as part of the new blue check system. So far, the update is not available on Android devices.

Musk, who had earlier said that he wants to “verify all humans” on Twitter, has floated that public figures would be identified in ways other than the blue check. Currently, for instance, government officials are identified with text under names stating that they are posting from an official government account.

President Joe Biden’s @POTUS account, for example, says in grey letters it belongs to a “United States government official.”

The announcement comes a day after Twitter began laying off workers to cut costs and as more companies are pausing advertising on the platform as a cautious corporate world waits to see how it will operate under its new owner.

About half of the company’s staff of 7,500 was let go, tweeted Yoel Roth, Twitter’s head of safety and integrity.

He said the company’s front-line content moderation staff was the group the least affected by the job cuts and that “efforts on election integrity – including harmful misinformation that can suppress the vote and combatting state-backed information operations – remain a top priority.”

Twitter co-founder and former CEO Jack Dorsey took blame for the job losses.

“I own the responsibility for why everyone is in this situation: I grew the company size too quickly,” he tweeted Saturday. “I apologize for that.”

Musk tweeted late Friday that there was no choice but to cut jobs “when the company is losing over $4M/day.” He did not provide details on the daily losses at Twitter and said employees who lost their jobs were offered three months’ pay as severance.

He also said Twitter has already seen “a massive drop in revenue” as advertisers face pressure from activists to get off the platform, which heavily relies on advertising to make money.

United Airlines on Saturday became the latest major brand to pause advertising on Twitter, joining companies including General Motors, REI, General Mills and Audi.

Musk tried to reassure advertisers last week, saying Twitter would not become a “free-for-all hellscape” because of what he calls his commitment to free speech.

But concerns remain about whether a lighter touch on content moderation at Twitter will result in users sending out more offensive tweets. That could hurt companies’ brands if their advertisements appear next to them.

U.N. High Commissioner for Human Rights Volker Türk on Saturday urged Musk to “ensure human rights are central to the management of Twitter.” In an open letter, Türk said reports that the company’s whole human rights team and much of the ethical AI team were laid off was not “an encouraging start.”

“Like all companies, Twitter needs to understand the harms associated with its platform and take steps to address them,” Türk said. “Respect for our shared human rights should set the guardrails for the platform’s use and evolution.”

Meanwhile, Twitter cannot simply cut costs to grow profits, and Musk needs to find ways to raise more revenue, said Dan Ives, an analyst with Wedbush. But that may be easier said than done with the new subscription program for blue checks.

“Users have gotten this for free,” Ives said. “There may be massive pushback.”

He expects 20% to 25% of Twitter’s verified users to sign up initially. The stakes are high for Musk and Twitter to get this right early and for sign-ups to work smoothly, he added.

“You don’t have a second chance to make a first impression,” Ives said. “It’s been a train-wreck first week for Musk owning the Twitter platform. Now you’ve cut 50% (of the work force). There are questions about just the stability of the platform, and advertisers are watching this with a keen eye.”

Economic Calendar: Nov 7 – Nov 11

Monday November 7

China foreign reserves and trade surplus

Germany industrial production

(3 p.m. ET) U.S. consumer credit for September.

Earnings include: Activision Blizzard Inc.; Brookfield Business Partners LP; CT Real Estate Investment Trust; Curaleaf Holdings Inc.; Franco-Nevada Corp.; Marriott International Inc.; Obsidian Energy Ltd.; Toromont Industries Ltd.

—

Tuesday November 8

China aggregate yuan financing, new yuan loans and money supply

Japan household spending

(6 a.m. ET) U.S. NFIB Small Business Economic Trends Survey for October.

Also: U.S. midterm elections

Earnings include: Bausch Health Companies Inc.; Boardwalk REIT; B2Gold Corp.; Canadian Apartment Properties REIT; Dream Industrial REIT; Equitable Group Inc.; Finning International Inc.; Freehold Royalties Ltd.; Goeasy Ltd.; Intact Financial Corp.; Keyera Corp.; Lundin Gold Inc.; NexGen Energy Ltd.; Occidental Petroleum Corp.; Parex Resources Inc.; Pioneer Natural Resources Co.; Sierra Wireless Inc.; Walt Disney Co.

—

Wednesday November 9

China CPI and PPI

(10 a.m. ET) U.S. wholesale trade for September.

Earnings include: ATS Automation Tooling Systems Inc.; Boyd Group Services Inc.; Brookfield Renewable Corp.; Canopy Growth Corp.; CGI Inc.; Choice Properties REIT; Crombie REIT; E-L Financial Corp.; Element Fleet Management Corp.; Granite REIT; IA Financial Corp. Inc.; Kinross Gold Corp.; Linamar Corp.; Manulife Financial Corp.; Northland Power Inc.; NuVista Energy Ltd.; Osisko Gold Royalties Ltd.; Pan American Silver Corp.; Power Corp. of Canada; Rogers Communications Inc.; Smart REIT; Stella-Jones Inc.; Summit Industrial Income REIT; TransAlta Corp.; Tricon Capital Group Inc.; Tourmaline Oil Corp.; Vermilion Energy Inc.; WSP Global Inc.

—

Thursday November 10

Japan machine tool orders

(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 5. Estimate is 220,000, up 3,000 from the previous week.

(8:30 a.m. ET) U.S. CPI for October. The Street is forecasting a rise of 0.5 per cent month-over-month and 8 per cent year-over-year.

(11:50 a.m. ET) Bank of Canada Governor Tiff Macklem speaks at the Public Policy Forum in Toronto on the evolution of Canadian labour markets

(2 p.m. ET) U.S. treasury budget for October.

Earnings include: Algonquin Power & Utilities Corp.; Altus Group Ltd.; Brookfield Asset Management Inc.; CAE Inc.; Canadian Tire Corp. Ltd.; CCL Industries Inc.; CI Financial Corp.; Definity Financial Corp.; Endeavour Mining Corp.; Exchange Income Corp.; Filo Mining Corp.; First Majestic Silver Corp.; InterRent REIT; Paramount Resources Ltd.; Perseus Mining Ltd.; Primo Water Corp.; Quebecor Inc.; Ritchie Bros Auctioneers; Saputo Inc.; Stantec Inc.

—

Friday November 11

Remembrance Day in Canada (stock markets open, bond markets closed)

U.S. Veterans Day (stock markets open, bond markets closed)

Germany CPI

(10 a.m. ET) U.S. University of Michigan consumer sentiment for November (preliminary reading)

Earnings include: Boralex Inc.; Emera Inc.; Hydro One Ltd.; Northwest Healthcare Properties REIT; Onex Corp.; Sprott Inc.

TOURMALINE DELIVERS STRONG CASH FLOW AND FREE CASH FLOW IN Q3 2022, ANNOUNCES INCREASED BASE DIVIDEND AND DECLARES SPECIAL DIVIDEND

HIGHLIGHTS

• Third quarter 2022 before tax cash flow⁽¹⁾⁽²⁾ (“CF”) was $1.056 billion and $1.051 billion after tax ($3.06 per diluted share⁽³⁾), a 38% increase over third quarter 2021 CF.
• Third quarter 2022 free cash flow⁽⁴⁾ (“FCF”) was $568.3 million ($1.65 per diluted share). 
• The Company will pay a special dividend of $2.25/share on November 18 to shareholders of record on November 9 and beginning in Q4, will increase the quarterly base dividend by 11% to $0.25/share providing for an annualized dividend of $1.00/share. Including the payments of both the Q4 special dividend and base dividend, the Company will pay a total of $7.90/share in dividends in 2022, resulting in approximately a 10% yield based on an October 14, 2022 closing share price of $76.51.
• Third quarter 2022 EP capital spending was $468.8 million, within previous guidance.
• Net debt⁽⁵⁾ at September 30, 2022, was $564.6 million, well below the long-term net debt target of $1.0-$1.2 billion. 
• At current strip pricing, full-year 2022 CF of $4.76 billion⁽⁶⁾ is now anticipated ($13.90 per diluted share).
• Tourmaline’s 2023 EP capital program is estimated at $1.6 billion. The 2023 EP program is expected to deliver an annual average production of 545,000 boepd, and CF at strip pricing of $5.4 billion, yielding FCF of $3.7 billion in 2023.

https://www.newswire.ca/news-releases/tourmaline-delivers-strong-cash-flow-and-free-cash-flow-in-q3-2022-announces-increased-base-dividend-and-declares-special-dividend-818997695.html

Nat-Gas Prices Rally On Weather

Dec Nymex natural gas (NGZ22) on Friday closed up +0.425 (+7.11%).

Dec nat-gas prices Friday rallied sharply on the -1.7% sell-off in the dollar index and on colder weather forecasts.  The Commodity Weather Group said that below-normal temperatures would spill into the Central and Eastern U.S. from November 13-17.  

Lower-48 state dry gas production on Thursday was 99.5 bcf (+4.2% y/y), mildly below the record high of 103.6 bcf posted on Oct 3, according to BNEF.  Lower-48 state total gas demand Thursday was 67.4 bcf/day, down -22% y/y, according to BNEF.  LNG net flow to U.S. LNG export terminals Thursday was 11.2 bcf/day, up +3.1% w/w, according to BNEF.

A decline in U.S. electricity output is bearish for nat-gas demand from utility providers.  The Edison Electric Institute reported Wednesday that total U.S. electricity output in the week ended Oct 29 fell -0.6% y/y to 68,883 GWh (gigawatt hours).  However, cumulative U.S. electricity output in the 52-week period ending Oct 29 rose +2.1% y/y to 4,114,400 GWh.

Nat-gas prices have support as EU countries agreed to cut nat-gas demand from Russia by 15% by early 2023.  Also, Russia recently slashed nat-gas exports to Europe to 20% of capacity, putting upward pressure on European nat-gas prices.  Russia has already halted nat-gas shipments to Demark, Finland, Bulgaria, Netherlands, Poland, and Latvia and reduced supplies to Germany for not acceding to its demand for gas payments in Russian rubles.

Nat-gas prices have seen downward pressure from the prolonged outage at the Freeport LNG export terminal, which curbed U.S nat-gas exports and put upward pressure on domestic supplies.   The Freeport terminal accounted for about 20% of all U.S. nat-gas exports before the explosion on Jun 8 knocked it offline.  The Freeport LNG terminal normally receives about 2 bcf, or 2.5%, of the output from the lower 48 U.S. states.  The current projected opening date is Nov 21.

Thursday’s weekly EIA report was bearish for nat-gas prices since it showed U.S. nat gas inventories rose +107 bcf in the week ended Oct 28, above expectations of +102 bcf and well above the 5-year seasonal average gain of +45 bcf.  Inventories remain tight and are -3.7% below their 5-year seasonal average.

Baker Hughes reported Friday that the number of active U.S. nat-gas drilling rigs in the week ended Nov 4 fell by -1 rig to 155 rigs, which was below the 3-1/4 year high of 166 rigs posted in the week ended Sep 9.  Active rigs have more than doubled from the record low of 68 rigs posted in July 2020 (data since 1987).
 

Lowe’s to sell Canadian business, including RONA stores, to private equity firm

Published Nov. 4, 2022 8:09 a.m. CDT

MOORESVILLE, N.C. – 

Lowe’s Companies, Inc. is selling its Canadian retail business to New York-based private equity firm Sycamore Partners for US$400 million plus a performance-based deferred consideration.

Lowe’s Canadian arm is based in Boucherville, Quebec, and operates or services around 450 corporate and independent affiliate dealer stores under a number of banners, including Lowe’s, RONA, Reno-Depot and Dick’s Lumber.

Lowe’s chairman, president and CEO Marvin R. Ellison said the sale is an important step toward simplifying the Lowe’s business model.

The deal, expected to close in early 2023, will establish Lowe’s Canada and RONA as a standalone, Quebec-headquartered company.

Lowe’s bought RONA Inc. in 2016 in a deal valued at $3.2 billion Canadian, or about US$2.4 billion, that at the time it said was a key step in accelerating its growth strategy.

The company’s Canadian retail business makes up around seven per cent of the company’s 2022 sales outlook.