GlaxoSmithKline, FCA, Heineken: Business News in brief, Thursday 27 October

GSK profits from sterling's woes; Regulator to investigate 'vulnerable customers' approach; Heineken toasts rising beer sales

GSK has profited from sterling's woes (Getty)

Sterling slump helps drive profits at GlaxoSmithKline

Pharmaceuticals giant GlaxoSmithKline saw profits soar in the third quarter, aided by sterling's slump following the EU referendum. The company said turnover rose 23 per cent to £7.5bn in the three months to 30 September compared to a year earlier, while core operating profit jumped 35 per cent to £2.3bn over the same period. A weak pound was a major driver of earnings growth last quarter, as the multinational firm benefits from income in stronger foreign currencies. Sterling has lost nearly 20 per cent of its value against the US dollar since the EU referendum in June. However, earnings were much more muted once stripped of currency fluctuations.Turnover at constant exchange rates only grew 8 per cent, while core operation profit rose 13 per cent.

The company has maintained a positive outlook in recent months, despite market fears surrounding Brexit. Shortly after the referendum, Glaxo announced it was pumping £275m into three British manufacturing sites, dubbing the UK an “attractive location”. In its latest trading update, Glaxo chief executive Sir Andrew Witty said the company was on track to meet its earning target for 2016.

PA

FCA to investigate plans to focus on ‘vulnerable consumers’

The FCA is re-assessing its approach after string of scandals

The financial watchdog will investigate whether it should focus on the plight of consumers, amid a backdrop of soaring compensation claims for mis-sold products. The Financial Conduct Authority said it had a duty to take action to protect “vulnerable consumers” by preventing pensioners being hit by financial scams or rooting out products which could harm people on low incomes. It said it also had a responsibility, alongside the Financial Ombudsman Service, to ensure consumers are handed compensation – or have their disputes resolved – in a cheaper way than going through the courts.

The scrutiny of its approach is part of a far-reaching consultation on the FCA's “mission”, designed to draw up a set of principles for guiding its future strategy. Andrew Bailey, FCA chief executive, said the UK had suffered a financial “conduct crisis” in the past decade. “Four of the more prominent headings for this conduct crisis are: retail products, most notably payment protection insurance (PPI); wholesale market products, most notably Libor and the FX market scandals; the sale of products to corporates, such as interest rate hedging products and areas of financial crime, involving money laundering and the breach of financial sanctions. This is a very sorry history, and the future needs to be radically different from the past. We owe this to the public who are the consumers of financial services.”

PA

Heineken cheers rise in beer sales

The warm summer helped boost sales (Getty)

Dutch brewing giant Heineken toasted a 2 per cent growth in global beer sales for the third quarter, boosted by a warm European summer and strong performances in Asia and Mexico. But the world's number two brewer also reported a 30.2 per cent drop in net profit for the first nine months to €1.24bn (£1.1bn). Amsterdam-based Heineken stressed, however, that 2015 results included “the exceptional gain of €379m from the €1.2bn sale of its Mexican packaging arm Empaque in February 2015. “Performance in the third quarter was robust despite strong comparatives in the Americas and Europe and a tough environment in Africa, the Middle East and Eastern Europe,” Heineken's chief executive Jean-Francois van Boxmeer said in a statement.

AFP

Dredge report: firm that built China's islands gets Philippines deal

Mr Duterte has broken off ties with the US in favour of China (Getty Images)

A Chinese state-owned company said to have been involved in Beijing's island-building in the South China Sea signed a deal to construct islands for rival claimant the Philippines as its President Rodrigo Duterte visited China last week, reports said. CCCC Dredging will create four artificial islands totalling 208 hectares of reclaimed land in Davao, the port city on the southern island of Mindanao where Mr Duterte was mayor, the Beijing Youth Daily reported. The islands will spread along eight kilometres of coastline and be used for government buildings, commercial spaces, residences, ports and industry in a project to be completed by 2019, it added.

The deal with the Philippines' Mega Harbour Port and Development was one of several inked in Mr Duterte's state visit, when Beijing offered $9bn (£7.45bn) in soft loans for development projects.

AFP

Coca-Cola posts 7 per cent global revenues loss

Growth in North America was strong but Asia stalled (Coca-Cola)

The slow global economy and the health-driven turn against sweet sodas dented Coca-Cola sales for the sixth straight quarter, delivering a 28 per cent hit to net income, the company reported on Thursday. Coca-Cola said worldwide revenues fell in the quarter to 30 September by 7 per cent from a year ago to $10.6bn (£8.66bn), with sharp declines in its Latin America and Europe-Africa-Middle East regions. Growth in North America was strong but Asia, another key market, only registered slight gains, the company said. Net profits for the quarter came in at $1.05bn (£860m), a big drop from $1.45bn (£1.2bn) a year ago.

AFP

Pokemon Go effect fizzles out as Nintendo cuts forecast

The Pokemon Go boost was only modest (Getty)

Pokemon Go is giving only a modest boost to Japanese video game-maker Nintendo, which has slashed its operating profit and sales forecasts for this fiscal year, citing lagging demand for game consoles like the Wii U. The Kyoto-based maker of Super Mario games said on Wednesday that its net profit in April-September was 38.3bn yen, (£300m) up 234 per cent from the same period the year before. That was mainly due to a 62.7bn yen (£490m) gain from its sale of the Seattle Mariners Major League Baseball team. Nintendo said it expects its net profit for the year that ends 31 March 2017, to overshoot its earlier estimate thanks to that windfall. Nintendo's earnings have suffered from disappointing sales of the Wii U and the 3DS handheld.

AP

Boeing reports higher earnings and lifts forecast

Boeing reported higher third-quarter earnings and lifted its full-year forecast on Wednesday, following a solid performance in its commercial aeroplane deliveries. Net income was $2.3bn, (£20m) up 33.7 per cent from the previous year and boosted by a one-time tax benefit. Revenues were down 7.5 per cent to $23.9bn (£190m). Operating profit fell both in Boeing's commercial and military divisions, yet the aerospace giant continued to book major orders for new commercial planes. The company also boosted its 2016 forecast for commercial plane deliveries to 745-750 from the prior range of 740-745. Commercial airplane deliveries are closely tied to revenues in the aerospace industry.

AFP

Google executives met Indonesian officials to negotiate tax bill

Senior executives from the Asia Pacific headquarters of Google met Indonesian tax officials on Wednesday to negotiate the internet search company's tax bill, a person with knowledge of the matter told Reuters. No agreement has been reached yet, said the person, who declined to be named as the information was confidential. A Google spokesman declined to comment. Indonesia plans to pursue Google for five years of back taxes, and the US company could face a bill of more than $400m for 2015 alone if it is found to have avoided payments, senior tax official Muhammad Haniv told Reuters last month.

Reuters