Category Archives: Business

Korean Air swings to loss in Q1

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Korean Air said Thursday it swung to loss in the first quarter due to soaring jet fuel prices.

Net loss came to 67.2 billion won (US$59.4 million) in the January-March period, compared with a profit of 270.9 billion won a year ago, the company said in a regulatory filing.

Sales rose 6.3 percent to 2.9 trillion won during the three-month period, while operating losses topped 98.9 billion won vis-a-vis 162.9 billion won in the black.

Korean Air said the net loss was attributable to an increase in jet fuel prices. A rise in the number of aircraft in its fleet raised depreciation expenses that hurt both net earnings and operating profits, it added.

Shares of Korean Air ended at 45,700 won on the Seoul bourse, up 0.22 percent from the previous session.

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Exports of meat, fish, fruits witness positive growth

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ISLAMABAD: The Exports of meat and fish as well as their preparations witnessed positive growth of 13.88 percent and 12.12 percent during the first three quarters of the current fiscal year (2011-12) as against the same period of last year.

Similarly, exports of fruits during the period under review increased by 15.25 percent as compared to the same period of last year, according to official data of Pakistan Bureau of Statistics.

Exports of meat and meat preparations increased from $108.542 million during July-March (2010-11) to $123.606 million during July- March (2011-12), showing growth of 13.88 percent.

In terms of quantity, the meat exports increased by 2.28 percent by going up from 37,829 metric tons to 38,691 metric tons.

On the other hand, the exports of fish and fish preparations grew from $198.698 million to $222.788 million, showing increase of 12.12 percent.

However, in terms of quantity, the seafood exports decreased by 3.18 percent by falling from 87,272 metric tons to 84,498 metric tons, the data revealed.

The exports of fruits also surged by 15.25 percent during the first three quarters, from $239.222 million to $275.712 million.

On month-on-month basis, the exports of meat during March 2012 increased by 4.12 percent as compared to the exports of February 2012, however decreased by 2.79 percent when compared to the exports of March 2011.

Similarly, exports of fish and fish preparations in March 2012 increased by 30.97 percent when compared to the exports of February 2012, however decreased by 3.24 percent when compared to the same month of last year.

Fruit exports during the month under review witnessed increase of 17.24 percent as compared to the exports of March 2011, however decreased by 43.39 percent against the exports of February 2012.

The overall food exports during July-March (2011-12) decreased by 5.06 percent as compared to the same period of last year.

Food exports were recorded at $2.976 billion this year against the exports of $3.135 billion last year.

The major commodities that witnessed decrease in exports included rice, vegetables, wheat and spices.

While the commodities that witnessed positive growth in exports included leguminous vegetables (Pulses), tobacco, oil, seeds, nuts and kernels, sugar, and all other food items.

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S.Korea, China plan free trade dialogue

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China and South Korea said Wednesday they will soon begin negotiations on a free-trade agreement.

According to the state media reports, the talks are expected to take two years.

Chinese commerce minister Chen Deming and South Korea trade minister Park Tae-Ho made the announcement in Beijing, the official Xinhua news agency said. It did not say when the talks were expected to start.

The two sides agreed in January to launch formal talks after South Korean President Lee Myung-Bak visited China.

China is South Korea s largest trading partner and Beijing forecasts trade between the two sides will reach $300 billion by 2015, up from $245.6 billion last year, according to Chinese customs data.

Chen said the free-trade agreement will cover goods, services, intellectual property rights and investment among other areas, Chinese state radio reported Wednesday.

The negotiations will also include “sensitive” areas of the two economies, such as South Korea s agricultural sector and China s petrochemical, electronics and machinery industries, the report said.

China s commerce ministry could not be reached for comment.

South Korea s finance minister in January called for early negotiations on a free trade pact with China so that Seoul can compete against Taiwan in the lucrative Chinese market.

Bahk Jae-Wan said a landmark pact between Beijing and Taipei in 2010 put South Korean firms at “a great disadvantage”.

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Electricity shortfall: Markets to be closed at 8.30

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KARACHI: After the meeting of Chief Minister Sindh, Qaim Ali Shah and Karachi traders association it was decided to shut down the shops and markets at 8.30 pm all over Karachi.

According to our correspondent, the decision was taken after the recommendation of National Energy Commission.

The energy crisis in Pakistan is unsolved since many years.

The traders also raised the issue of notices sent by the Karachi Electric Supply Company (KESC) to cottage industries “on the pretext of load”.

He requested the chief minister to ensure non-interference of public officials in the regard. It was further decided that any harassment complaints would be communicated to the competent authority.

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Japan’s Toyota to post $4.3 bln profit

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Japanese car giant Toyota Motor will post a full-year operating profit of $4.3 billion, nearly 30 percent above forecast, when it announces its earning results next week, according to a report.

The Nikkei business daily said the firm will reveal operating profit of 350 billion yen in the year to March 31, surpassing the 270 billion yen estimate it gave in February, thanks to strong sales and a weakening yen in recent months.

The firm would also target operating profit to surge to around 800-900 billion yen for the current fiscal year, which would mark a more than doubling on the year, the daily said.

Despite the huge jump, the fiscal 2011 figure would still mark a drop of 25 percent year-on-year as Toyota cut production in the wake of a massive earthquake and tsunami disaster at home and heavy flooding in Thailand.

The effect of the natural disasters wore off mostly by the end of last year, enabling Toyota to increase output from January, the Nikkei noted.

Domestic eco-car subsidies helped to spur sales of its hybrid vehicles while results were solid in North America as well as in emerging markets, it said.

The yen, which hit a record high against the dollar last year, began to weaken in February and March, helping to mitigate an erosion in export profitability, according to the Nikkei.

The report did not mention possible net profit figures.

Toyota is to announce its earnings reuslts on May 9.

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OGRA proposes cut in POL prices

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ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Saturday proposed reduction in oil prices upto Rs4.89 per litre (3.6 per cent) with effect from May 1.

The Senior government official said the Ogra summary seeking price reduction had been received at the ministry of petroleum and natural resources and a decision on the proposal would be made in consultation with the ministry of finance by Monday.

According to the reports, OGRA authorities witnessed a decline in the international market by $3 and have decreased at $121 per barrel so the government should trim down the price of Petrol by Rs1, High Octane Blended Component (HOBC) Rs4.89, light diesel oil (LDO) Rs1.64, high speed diesel oil Rs1.31, and Rs2.13 per litre in the price of Kerosene oil for next month.

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India approves new visa deal for Pakistanis

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ISLAMABAD:  The Indian cabinet approved new and easing visa policies for pakistanis after signing an accord between the heads of both countries.

With India and Pakistan already talking of working out a deal to allow almost all commodities in the positive list to be traded through the land route on the Wagah border, the Union Cabinet has given its approval for signing a new liberal visa regime with Pakistan paving way for easing travel restrictions and increasing people-to-people exchange.

The Cabinet of India stated in a statement that Businessmen with multiple entry, non-police reporting visas can visit five cities instead of three. However, the provision will apply only to business persons whose credentials are certified by the chambers on the both sides.

From India, it will be FICCI and from Pakistani side it will be the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

Similarly, it is being proposed, under the new visa regime, that senior citizens would be exempt from police reporting on both sides.

The two countries decided to ease visa regulations during the meeting between Prime Minister Manmohan Singh and Pakistan President Asif Ali Zardari on April 8.

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World Bank to give Pakistan $550 million

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The World Bank announced the approval of a $550 million loan for Pakistan, to be used in education and energy (Natural Gas) sector by the government at Federal and Provincial levels.

Punjab government will have access to $350 million, which it will use to improve the education sector providing relief to a good 8 million students all over Punjab.

While the other $200 million is said to be given to the Federal government to be invested in the exploration of Natural Gas resources in the country.

Significant shortfalls persist in both school participation and student achievement in Punjab. To address these challenges, the Government of Punjab is implementing the Punjab Education Sector Reform Program (PESRP), which aims to improve schooling outcomes through institutional development and strengthening, improved monitoring, and enhanced governance and accountability.

The Bank has supported this program since 2008. During this time, the reform program has put in place and strengthened important initiatives. Over 850,000 additional students – more than half of them girls – are now enrolled in low cost private schools supported under government subsidies tied to minimum school quality standards; some 400,000 female students receive quarterly stipends tied to school attendance; and free textbooks are provided to all students in public schools.

The new results-based project will build on these achievements and support the second phase of the reform program over the period 2012-2015.

“With a target school-aged population of over 12 million children, 30 percent of who remain out of school and with relatively low levels of learning, continuation of our support to the government’s reform program is critical,” said Rachid Benmessaoud, World Bank Country Director for Pakistan.

“The second phase of the program aims to take the next evolutionary step and zero in on improving service delivery performance at the school level. A key focus will be improving teacher quality and performance, which is critical for better school quality, and, thereby helping retain students in school and attract new children to school.”

The challenges in the gas sector are also significant. Pakistan faces severe scarcity of gas, with production failing to keep pace with demand. Other critical challenges include inadequate allocation of gas, inefficient end-use of gas, and high levels of unaccounted-for gas (UFG). More than 10 percent of gas supplied in Pakistan is unaccounted for, which is unaffordable and a major contributor to the current gas supply crisis. UFG is typically at 1-2 percent in OECD countries.

The main focus of the Natural Gas Efficiency Project is to reduce UFG to about 5 percent by 2017 in distribution areas served by the Sui Southern Gas Company Limited (SSGC). This includes Karachi, interior Sindh, and Balochistan.

“Results will be achieved through pipeline rehabilitation, use of cathodic protection to halt corrosion, and installation of automatic pressure management systems and advanced consumer metering systems,” said Bjorn Hamso, World Bank Senior Energy Economist and project team leader. “Key to the project’s success is to install hundreds of wholesale meters in the distribution network in such way that network activity can be monitored on a localized level and investments can be put to use where the leakage problem is the largest and the theft problem the most severe.”

The project will also provide technical assistance to enhance SSGC’s operational efficiency and service delivery to its customers.

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Australian girl suffers severe brain damage from KFC; will be paid $8.3 million

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Fast food giant Kentucky Fried Chicken has been ordered to pay Aus$8 million (US$8.3 million) to an Australian girl who suffered severe brain damage and was paralysed after eating a Twister wrap.

Monika Samaan was seven when she suffered salmonella encephalopathy — a brain injury linked to food poisoning that also left her with a blood infection and septic shock — in October 2005.

Several other family members also fell ill and they claimed Samaan’s injuries, which include severe cognitive, motor and speech impairment and spastic quadriplegia, were caused by a chicken Twister wrap from a Sydney KFC outlet.

The New South Wales Supreme Court ruled in the family’s favour a week ago and on Friday ordered KFC to pay the girl Aus$8 million in damages plus legal costs.

In a statement, the family’s lawyer George Vlahakis said they were relieved the battle was over.

“Monika’s severe brain damage and severe disability has already exhausted the very limited resources of the family,” he said.

“Monika is now a big girl and they are finding it increasingly difficult to lift her and to look after her basic needs as well as look after Monika’s younger siblings.

“The compensation ordered is very much needed. KFC have to date been determined that Monika does not receive a cent.”

Last week KFC indicated it will appeal the decision but is yet to do so.

During the trial, Justice Stephen Rothman said the chicken became contaminated “because of the failure of one or more employees of KFC” to follow proper preparation rules, which he described as “negligent”.

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