UK Energy Giant BP’s Profits Double To $27.7 Billion
LONDON, England — On Tuesday, BP announced that it had made the most money ever in a single year. This added to calls for the UK government to raise taxes on companies that are making money off of the high prices of oil and natural gas because of Russia’s invasion of Ukraine.
BP, which has its headquarters in London, said that its underlying replacement cost profit, which does not include one-time items or changes in the value of inventories, went up from $12.8 billion in 2021 to $27.7 billion in 2022. BP earned $26.8 billion in 2008 when tensions in Iran and Nigeria drove global oil prices to a record of more than $147 per barrel.
BP also said it would buy back more shares from shareholders worth $2.75 billion and raise its quarterly dividend by 10%.
But public anger, especially in the country where the company is based, is likely to make the good news for BP shareholders less exciting. High oil and gas prices have hit Britain hard, with double-digit inflation fueling a wave of public-sector strikes, a surge in food bank use, and calls for politicians to expand a tax on energy companies‘ windfall profits to help pay for public services.
Ed Miliband, who is in charge of the environment for the opposition Labour Party, has asked the UK government to put a “proper” windfall tax on energy companies.
BP Faces Critisism Over The Profit Margins
“Yet another day of huge profits at an energy giant, windfalls from war,” Miliband said.
Shell, based in London, received similar criticism last week after reporting that its annual earnings more than doubled to a record $39.9 billion.
Energy companies around the world are making a lot of money, which has led to calls for the fossil fuel industry to do more to help with high energy bills and reduce carbon emissions that hurt the environment. Last week, Exxon Mobil, which is based in the United States, said it made a record $55.7 billion.
Last year, Britain put a 25% windfall tax on earnings from oil and gas production in the country. In 2023, the tax will go up to 35%. Opposition leaders have chastised the government for allowing energy companies to reduce their tax liability by investing in the United Kingdom.
BP said it took a $1.8 billion charge last year to cover the new UK tax.
The Company Had To Pay Lots Of Fees To Leave Russia
The company also had to pay $25.5 billion in fees because it decided to pull out of its investments in Russia after Russia invaded Ukraine.
After taking into account one-time costs and changes in the value of inventories, BP reported a net loss of $2.49 billion for 2022. This is a big change from the year before, when it made a net profit of $7.57 billion.
BP said on Tuesday that it would invest an extra $8 billion in its oil and gas businesses, as well as in clean energy, hydrogen, and charging stations for electric cars, through 2030.
The investments will increase oil and gas production to approximately 2 million barrels of oil equivalent per day by 2030. BP had planned to cut production by 40%, but the new goal is only 25% less than what was planned for 2019.
“We will prioritize projects where we can deliver quickly, at a low cost, and using our existing infrastructure, allowing us to minimize additional emissions while maximizing both value and our contribution to energy security and affordability,” said CEO Bernard Looney statement.
Prices Of Oil Has Been Falling
Following the invasion of Ukraine, energy prices skyrocketed. Brent crude, a global oil price benchmark, averaged $101.32 per barrel last year, 43% higher than in 2021. The average wholesale price of natural gas in the United Kingdom increased by 76%.
Prices have been falling in recent months, with Brent crude averaging $88.87 per barrel in the fourth quarter.
“The question is, what will they do with record profits and operating cash flow? Governments are already questioning record profits from peer global energy companies,′′ according to Gianna Bern, author of “Investing in Energy: A Primer on the Economics of the Energy Industry.” “At a time when inflation and gas prices are both at record highs, energy companies around the world will have to rethink the cost and availability of energy for everyone.”
According to Alice Harrison, fossil fuels campaign leader at environmental advocacy nonprofit Global Witness, BP’s profits were made “on the back of three global crises” — the Ukraine war, the energy crisis, and climate breakdown.
“These massive profits will be a bitter pill to swallow for those in need,” Harrison said. “There’s no denying it: BP is richer because we’re poorer.”
SOURCE – (AP)
Regulators Seize Assets From Silicon Valley Bank’s Canadian Branch
The Canadian banking regulator has temporarily seized assets from Silicon Valley Bank’s Canadian branch. Fearful depositors withdrew billions of dollars from the US bank on Friday in hours, forcing US banking regulators to close the California-based institution immediately.
According to the Office of the Superintendent of Financial Institutions of Canada, the bank operates in Canada as a foreign branch based in Toronto, which it supervises.
According to the report, Superintendent Peter Routledge seized the Canadian assets to preserve their value in light of the California Department of Financial Protection and Innovation’s decision to close the bank.
According to the statement, Silicon’s business in Canada primarily lends to corporate clients, and the branch does not hold any commercial or individual deposits in Canada.
The superintendent has also notified the Attorney General of Canada of his intention to seek permanent control of the Canadian branch’s assets and requested a winding-up order be issued.
“We are acting to protect the rights and interests of the branch’s creditors by temporarily seizing the Canadian branch of Silicon Valley Bank,” Routledge said in a statement announcing the temporary seizure.
“I want to be clear: the Silicon Valley Bank branch in Canada does not accept Canadian deposits, and this is due to circumstances unique to Silicon Valley Bank in the United States.”
According to the statement, the Federal Deposit Insurance Corporation of the United States was named the receiver.
Silicon Valley Bank primarily served technology workers and venture capital-backed businesses, including some of the industry’s most well-known names. After the failure of Washington Mutual in 2008, it was the second-largest bank failure in US history.
On Sunday, U.S. Treasury Secretary Janet Yellen stated that the federal government would not bail out Silicon Valley Bank but is working to assist depositors concerned about their money.
During an interview with CBS’ “Face the Nation,” she reassured Americans that there would be no domino effect from the failure of Silicon Valley Bank and that the American banking system is safe and well capitalized.
The Canadian regulator stated that it has closely monitored Silicon Valley Bank’s Canadian branch since its difficulties began. It also stated that it “continues to undertake diligent supervision of federally regulated banks in Canada, including robust requirements for capital and liquidity adequacy,” following globally accepted international Basel III standards.
HSBC White Knight for Silicon Valley Bank
HSBC Holdings has emerged as a potential “white knight” bidder for Silicon Valley Bank (SVB) UK, as the government and regulators work to keep the lender from going bankrupt.
Sky News reported that HSBC was considering a bid for the stricken technology-focused lender’s British arm on Sunday night, joining several smaller rivals in the emergency sale process triggered by its American parent’s collapse into government ownership.
According to one source, a deal was still possible, and the Bank of England’s decision to place SVB UK into insolvency proceedings could happen in the coming hours.
The American banking behemoth JP Morgan has also been asked to look into a bid.
Although HSBC is thought to be the more likely of the two global lenders to pursue a transaction, it has declined to comment, and it remains possible to abandon the process.
The speed with which the sale was completed raised concerns among some observers that HSBC could acquire SVB UK before the company went bankrupt.
Any transaction would not be material to HSBC’s global balance sheet, but it would increase its exposure to corporate clients in the tech and biotech sectors in its home market of the United Kingdom.
HSBC and JP Morgan were among the large international banks asked to consider participating in the pre-insolvency sale process, along with Barclays and Lloyds Banking Group.
Lloyds was also said to be deliberating whether to make an offer on Sunday night.
Scream VI Tops Oscars Weekend Raking in $44.5M
According to studio estimates, “Scream VI” had the best Oscar weekend in theatres, grossing a franchise-high $44.5 million in domestic ticket sales.
The co-production between Paramount Pictures and Spyglass Media Group easily outperformed expectations, grossing $32 million more than the previous series high of $32 million set by “Scream 2” in 1997. The film’s strong opening, which came as Hollywood prepared for the 95th Academy Awards, was another reminder of how horror has become one of the industry’s few sure bets at the box office.
The “Scream” franchise, previously directed by Wes Craven and distributed by Dimension Films, has found a ripe revival with a young cast led by “Wednesday” stars Jenna Ortega and Melissa Barrera.
Matt Bettinelli-Olpin and Tyler Gillett have returned the meta-slasher storylines and serial killer Ghostface from the 27-year-old series, which is paying off. Last year’s “Scream V” grossed $137 million worldwide on a $24 million production budget. Courtney Cox reprises her role as reporter Gale Weathers in the latest installment, as does Hayden Panettiere, a veteran of “Scream IV.” However, it is the first “Scream” film without Neve Campbell.
“Scream VI,” quickly greenlit following the success of “V,” has also done well with critics and audiences.
It has a 75% fresh rating on Rotten Tomatoes. It received a “B+” CinemaScore, which is a respectable rating for a horror film. The sixth “Scream,” which cost $33 million to produce, brought in an additional $22.6 million overseas.
“Creed III,” last week’s top film, fell to second after an above-expectations debut. MGM’s “Rocky” spinoff starring Michael B. Jordan and Jonathan Majors earned $27.1 million in its second weekend. It has quickly surpassed US and Canadian theatres‘ $100 million mark.
“65,” a science-fiction thriller starring Adam Driver as a space explorer stranded on prehistoric Earth, debuted in third place with an estimated $12.3 million from 3,405 locations and an additional $7.2 million worldwide. That could be better than expected for a film that received negative reviews from critics. (On Rotten Tomatoes, it received only 35% fresh.) However, “65” reportedly had a $90 million production budget, though tax breaks cut that cost in half for financiers such as Sony, Bron Studios, and TSG.
“Champions,” directed by Bobby Farrelly and starring Woody Harrelson as a disgraced coach attempting to lead a basketball team to the Special Olympics, grossed $5.2 million in 3,030 theatres. Audiences (with an “A” CinemaScore) rated it higher than critics (53% on Rotten Tomatoes).
Comscore estimates ticket sales for Friday through Sunday at US and Canadian theatres.
1. “Scream VI,” $44.5 million.
2. “Creed III,” $27.1 million.
3. “65,” $12.3 million.
4. “Ant-Man and the Wasp: Quantumania,” $7 million.
5. “Cocaine Bear,” $6.2 million.
6. “Jesus Revolution,” $5.2 million.
7. “Champions,” $5.2 million.
8. “Avatar: The Way of Water,” $2.7 million.
9. “Demon Slayer: Kimetsu no Yaiba: To the Swords,” $1.9 million.
10. “Puss in Boots: The Last Wish,” $1.7 million.
Lilly Plans To Cut Some Insulin Prices $44, Expand Cost Cap
Eli Lilly will reduce the price of some older insulins later this year and provide more patients with immediate access to a cap on the costs they pay to fill prescriptions.
The actions announced on Wednesday provide critical relief to some people with diabetes who can face annual costs of thousands of dollars for the insulin they require to live. Lilly’s changes come as lawmakers and patient advocates pressure drugmakers to address rising prices.
Lilly said it would reduce list prices for Humalog, its most commonly prescribed insulin, and Humulin, another insulin, by 70% or more in the fourth quarter, which begins in October.
List prices are what a drugmaker initially establishes for a product and what people without insurance or with high deductible plans are sometimes forced to pay.
According to a Lilly spokesperson, the current list price for a 10-mL vial of the fast-acting, mealtime insulin Humalog is $274.70. This will be reduced to $66.40.
Similarly, she stated that the same amount of Humulin is currently listed at $148.70. That will now be $44.61.
According to Lilly CEO David Ricks, the company is making these changes to address issues that affect the price patients ultimately pay for its insulins.
Lilly Humulin is currently listed at $148.70. That will now be $44.61
He noted that discounts Lilly offers from its list prices often only reach patients through insurers or pharmacy benefit managers. High-deductible coverage can result in large bills at the pharmacy counter, especially at the beginning of the year when deductibles renew.
“We know the current healthcare system in the United States has gaps,” he said. “This makes a difficult disease like diabetes even more difficult to manage.”
Patient advocates have long advocated for insulin price reductions to assist uninsured individuals unaffected by price caps tied to insurance coverage.
Lilly’s planned price cuts “could provide some substantial price relief,” according to Stacie Dusetzina, a Vanderbilt University health policy professor who studies drug costs.
She noted that the changes are unlikely to have a significant financial impact on Lilly because the insulins are older, and some are already competitive.
Lilly also announced on Wednesday that the price of its authorized generic version of Humalog would be reduced to $25 per vial beginning in May.
Lilly will also launch biosimilar insulin in April to compete with Sanofi’s Lantus.
Ricks stated that because insurers and the pharmacy system will take time to implement the price cuts, the drugmaker will immediately cap monthly out-of-pocket costs for people not covered by Medicare’s prescription drug program at $35.
According to the drugmaker, the cap applies to people with commercial insurance and at most retail pharmacies.
People without insurance, according to Lilly, can find savings cards for the same amount of insulin on its InsulinAffordability.com website.
In January, the federal government began applying that cap to patients with Medicare coverage, which is available to people 65 and older and those with certain disabilities or illnesses.
Last month, President Joe Biden mentioned the cost cap in his annual State of the Union address. He proposed capping insulin costs at $35 for everyone.
Lilly responded to Biden’s call, according to a statement released on Wednesday.
“It’s a big deal, and other manufacturers should follow,” Biden said.
He also stated that Americans have faced “far too long” and much higher drug costs than people in other countries.
Aside from Eli Lilly and the French pharmaceutical company Sanofi, Novo Nordisk is another insulin manufacturer.
Sanofi and Novo Nordisk representatives said their companies offer a variety of programs that help people with and without insurance save money.
The pancreas produces insulin, which the body uses to convert food into energy. Diabetes patients do not produce enough insulin.
To survive, people with Type 1 diabetes must take insulin every day. According to the American Diabetes Association, more than 8 million Americans use insulin.
According to research, insulin prices have more than tripled in the last two decades. Pharmaceutical companies are under increasing pressure to assist patients.
Lilly is trying to get ahead of the issue and appear to the public as the good guy,
California has stated that it intends to investigate the possibility of producing cheaper insulin. Drugmakers also may face competition from companies like the nonprofit Civica, which plans to produce three insulins at a recommended price of at most $30 a vial, a spokeswoman said.
Drugmakers may see “the writing on the wall that high prices can’t last forever,” according to Larry Levitt, executive vice president of the Kaiser Family Foundation, a nonprofit that studies health care.
“Lilly is trying to get ahead of the issue and appear to the public as the good guy,” Levitt said, adding that nothing prevents Lilly from raising prices again.
According to Lilly officials, they have not raised the prices of any of their insulins since 2017.
Lilly CEO Ricks stated that Wednesday’s changes were made “because it’s time and the right thing to do.”
In 1923, two years after University of Toronto scientists discovered insulin, Indianapolis-based Eli Lilly and Company became the first company to commercialize it. The drugmaker then built its reputation on insulin production, even as it expanded into cancer treatments, antipsychotics, and other medications.
Last year, Lilly earned more than $3 billion in revenue from Humulin, Humalog, and it’s authorized generic. The previous year, they made more than $3.5 billion.
“These are treatments that have a long and successful history and should be less expensive for patients,” Dusetzina said.
SOURCE – (AP)
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