jueves, 30 de abril de 2015

jueves, abril 30, 2015
Oil price drop triggers wave of profit warnings

Oil price fall triggers series of profit warnings among producers, as support services companies bear the brunt of election uncertainty, new report finds

By Szu Ping Chan

1:42PM BST 26 Apr 2015

Plunging oil prices and uncertainty surrounding the general election triggered a wave of profit warnings at London-listed companies in the first quarter
Oil and gas producers and support services companies topped the list of struggling firms, with eight profit warnings in each sector Photo: AP
 
 
Plunging oil prices and uncertainty surrounding the general election triggered a wave of profit warnings at London-listed companies in the first quarter.
 
While the decline in prices has helped put more money in people's pockets and boosted consumer spending, analysis from accountancy firm EY showed UK quoted companies issued 77 profit warnings between January and March, three more than in the same period a year ago.
 
EY said 5.4pc of all FTSE companies issued a warning in the first three months of 2015. This represents the highest first quarter percentage since 2009, despite the improving economic outlook.

Oil and gas producers and support services companies topped the list of struggling firms, with eight profit warnings in each sector. Retailers issued six profit warnings, according to EY, as shops on the high street and online faced stiff competition.

Brent crude fell to $50 a barrel in January, from a 2014 high of $115 in June. While prices have recovered to just above $65 a barrel, the decline has forced some of the UK's biggest companies to issue profit warnings. Rolls-Royce, the FTSE 100 engineer, said in February that the near-halving in oil prices had created "increased uncertainty for many of our markets and customers", while oil rig maker Lamprell warned in January that the plunge would make it difficult to win new contracts.
 
"Cheap oil is bolstering demand and giving central banks inflation breathing space. However, this recovery is double-edged and unpredictable," EY said.



While many companies have guarded against price fluctuations with hedging contracts, EY said these companies would be exposed if prices remained low. "As hedging contracts run out we may see further waves of profit warnings if prices remain at around $60 a barrel," it said.

Support services companies, which rely on the public sector, saw contract awards dry up ahead of the election. EY said there was concern that a hung parliament could further delay contracts.

Alan Hudson, EY's UK head of restructuring, said low inflation was helping to keep costs down, but also making it harder to raise prices. The strength of the pound against the euro was also making it difficult to forecast and benefit from the economic upturn.




"The recovery hasn't increased predictability and companies still have little room for manoeuvre when things go wrong, such as a lost contract, adverse currency movement or price drop," he said.

"New entrants and technologies add to the competitive tension – as does the accumulated pressure to invest, but also cut prices.

"There are clear advantages for businesses that can take the initiative and demonstrate that they have market understanding and the business resilience necessary to match this unpredictable recovery."

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