07/08/2025

BIZ & FINANCE THURSDAY | AUG 7, 2025

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Novo Nordisk to reduce costs after profit warning

Shares of Coca-Cola bottlers drop on weak outlook LONDON: Shares of bottlers Coca-Cola HBC and Coca-Cola Europacific Partners dropped sharply yesterday, as weak consumer sentiment and concerns over the impact of trade tensions weighed on their annual revenue forecasts. Coca-Cola HBC, which bottles drinks in 29 countries including Italy, Russia and Nigeria, forecast annual organic or self-generated revenue growth at the top end of its 6%-8% guidance range, but fell short of average market estimates of 8.8%. Meanwhile, Coca-Cola Europacific Partners (CCEP), which operates in 31 countries in Western Europe, Australia, Asia Pacific and Southeast Asia, guided investors to expect revenue growth between 3% and 4%, down from an earlier forecast of about 4%. Shares in the companies dropped roughly 10% in early London trading, both underperforming the wider FTSE 100 index which was up 0.2%. In addition to global concerns that US tariffs are weighing on consumer and business sentiment, the bottlers have over the past year faced backlashes from consumers in Indonesia, where CCEP operates, and Egypt, where Coca-Cola HBC operates, as consumers shied away from US brands due to the Israel-Gaza conflict. The companies, which bottle Coca-Cola and other drinks in different regions, have been raising prices to shield margins from elevated costs and lower spending. Last month, Coca-Cola Co, which holds stakes in both the bottlers, said cost pressures stemming from global trade dynamics remained manageable, but added it would consider switching to cheaper packaging options, such as plastic bottles, after Donald Trump’s administration imposed a 25% tariff on aluminium imports. Coca-Cola HBC CEO Zoran Bogdanovic said the company was monitoring American trade policies, but noted that its localised sourcing and production model limits direct exposure to US tariffs. – Reuters Guinness owner Diageo ups savings LONDON: Diageo, the maker of Guinness stout and Smirnoff Vodka, reported on Tuesday a sharp drop in annual net profit and raised its cost-savings targets as US tariffs hit. Net profit tumbled 39% to US$2.4 billion (RM10.2 billion) in its financial year to the end of June, compared with one year earlier, the British group said in an earnings statement just weeks after the sudden departure of CEO Debra Crew. Diageo’s revenue dipped slightly to US$20.2 billion. “Macroeconomic uncertainty and the resulting pressure on consumers” has weighed on the spirits sector, interim CEO Nik Jhangiani said of a “challenging year” for the group. The company had already experienced a tough trading environment ahead of announcing in May that it faced a financial hit from Donald Trump’s tariffs onslaught. Diageo ramped up its cost-saving programme on Tuesday to around US$625 million over three years, from a previous target of US$500 million. Its annual profit was hit also by restructuring costs and impairment charges. – AFP

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Jorgensen said in a statement. “As a result, we are taking measures to sharpen our commercial execution further, and ensure efficiencies in our cost base while continuing to invest in future growth.” Doustdar, who will take the helm today, will face tough questions from investors about how it can stay competitive in the booming weight-loss drug market against US rival Eli Lilly and a wave of “compounded” copycat versions. Novo has been hit by copycats of its GLP-1 drugs Wegovy for weight-loss and Ozempic for diabetes. US law bars pharmacies from replicating approved drugs, but has allowed “compounding”, or mixing of medications, for patients from outside China by 2030, rising to 50% by 2035, through steps such as promoting closer ties with “friendly countries” like Australia and Japan. Besides wind turbines, rare earths are used in a wide variety of products ranging from electric car batteries to hard drives. At a recent EU-China summit, Beijing agreed to speed up exports of the minerals to the bloc. Germany aims to have renewables make up 80% of its electricity supplies by 2030, and is

o Weight-loss drug competition squeezes sales outlook

formulations. Sales of Wegovy rose 67% to 19.53 billion crowns in the second quarter from a year ago, the company said. Novo reported second-quarter sales of 76.86 billion Danish crowns (RM50.4 billion), up 18% from last year, below analysts’ initial expectations. It confirmed a 2025 sales growth forecast of between 8% and 14%, which was cut in a profit warning last week from the previous 13%-21%. It was the second time this year that the company cut its sales forecast. Second-quarter earnings before interest and taxation stood at 33.45 billion crowns, up 29% from a year ago. – Reuters aiming to triple its current offshore wind power capacity by that date. Particularly since Russia’s invasion of Ukraine stoked fears about economic reliance on authoritarian states, Berlin has been seeking to reduce its dependence on China. For its part, China has urged Germany to ensure fair treatment for Chinese businesses. Several attempted investments by Chinese firms in Germany have been blocked or scaled back on national security concerns. – AFP

COPENHAGEN: Novo Nordisk is to cut costs as the Wegovy-maker battles competition from rival Eli Lilly and copycat versions of its obesity drug, with lower growth expected for its treatments in the second half of the year. The drugmaker, which was Europe’s most valuable company worth some US$650 billion last year on the back of sales of its blockbuster weight-loss drug, is facing a pivotal moment as competition intensifies. The Danish drugmaker warned FRANKFURT: Germany presented a plan on Tuesday drawn up with European wind power groups to reduce dependence on China for components made from rare earths, after export curbs on the materials sparked tensions. China dominates the global industry for extracting and refining rare earth minerals but since April has required licences to export some of the materials, triggering jitters among businesses worldwide. “Our economy needs robust and resilient supply chains – this is ZURICH: and commodity trading giant Glencore posted widening first-half losses yesterday as falling coal prices, US tariffs and Middle East tensions hit earnings. Glencore reported a US$655 million loss for the first six months of the year, compared to US$233 million over the same period in 2024. Core earnings at its mining division sank 17% to US$5.4 billion, primarily due to weaker coal prices and lower copper volumes, the company said in an earnings statement. In its commodity trading division, profit before interest and tax was down eight percent to US$1.4 billion. Glencore said, however, that it was “an overall solid result against a macroeconomic environment that was heavily influenced by US tariff policy uncertainty and tensions in the Middle East”. The company, which had considered shifting its primary listing from London, said it will retain the listing in the UK, citing that a move to the United States would not add value for shareholders. “While there is much uncertainty around the impact of geopolitics and trade in the shorter term, we Swiss mining

on profits last week and replaced its CEO, which has wiped US$95 billion off its market value. The company repeated its full-year guidance yesterday, after last week’s profit warning reduced its 2025 sales outlook and named veteran insider Maziar Mike Doustdar to take over from CEO Lars Fruergaard Jorgensen. “We have lowered our full-year outlook due to lower growth expectations for our GLP-1 treatments in the second half of 2025,” outgoing chief executive especially true for key technologies of the energy transition such as wind turbines,” said the German Economy Ministry, as it released the roadmap drawn up with five European wind power industry groups. The roadmap relates specifically to magnets made from rare earths, which the ministry said are “key to reliable and economical power generation, especially in the offshore sector”. The plan aims to ensure that 30% of such magnets are sourced

Germany, wind power groups seek to cut China reliance

Swiss mining, commodity giant Glencore posts deeper losses

The Glencore headquarters in Baar, central Switzerland. – AFPPIC

remain of the view that, in certain commodities, the scale and pace of required resource development will

struggle to meet the demand projections for such materials into the future,” CEO Gary Nagle said.

“We are well-placed to participate in bridging this gap,” Nagle said. – Agencies