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Delta Q1 2018 pre-tax income drops to $676m

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Delta Air has announced $676 million pre-tax income for Q1 2018, a $104 million decrease from the March 2017 quarter. The drop according to a statement from the airline stemmed from record revenues, which were offset by higher fuel prices and other increased costs including a $44 million impact from severewinter weather.

“The Delta people delivered a strong March quarter, and our record revenue was a direct result of the great service andoperational reliability they provided for our customers. It’s an honor to recognize their hard work with $183 million toward our 2018 profit sharing,” said Ed Bastian, Delta’s chief executive officer.

“We have confidence in our plan to grow earnings in 2018 through top-line growth, improving our cost trajectory, and leveraging our international partnerships.” CROSSCHECKDelta’s adjusted operating revenue of 9.8 billion for the March quarter improved 8 percent, or $715 million versus the prior year. This revenue result marks a March quarter record for the company, and was driven by improvements across Delta’s business, including a 23 percent increase in cargo revenue and a $78 million increase in total loyalty revenue.

Delta’s Branded Fares initiative drove $421 million in premium up-sell revenue in the period, a 23 percent increase from the prior year. Total unit revenues excluding refinery sales (TRASM) increased 5.0 percent during the period, with foreign currency contributing just over 0.5 points of benefit.

This marks the fourth consecutive quarter of year-over-year growth, with allgeographic regions delivering positive results. “We are seeing Delta’s best revenue momentum since 2014, with positive domestic unit revenues, improvements in all ourinternational entities, strong demand for corporate travel and double-digit increases in our loyalty revenues,” said GlenHauenstein, Delta’s president.

With our solid pipeline of commercial initiatives, delivered with industry-leading Deltaservice, we expect to maintain this momentum and deliver total revenue growth of 4 to 6 percent for the full year. “We expect unit cost growth of 1 to 3 percent in the June quarter, as we lap prior year investments in our people and ourbusiness,” said Paul Jacobson, Delta’s chief financial officer.

“As we move through depreciation pressure from our fleet retirements and gain benefits from our upgauging and One Delta initiatives later in the year, we are on track for our 0 to 2percent full year unit cost target.” Adjusted non-operating expense was flat year-on-year for the March quarter as a $62 million improvement in pension expenses was offset by higher interest costs and the seasonality of joint venture partner earnings. The company expects2018 full-year adjusted non-operating expense to be $200-250 million lower than 2017, due to pension expense savings.

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Tincan Customs chief to implement 48-hour cargo clearance

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Customs Area Controller (CAC), Tin Can Island Port Command, Musa Baba Abdullahi has reiterated the command’s unshaken commitment to achieve 48hour cargo clearance from the port without compromising revenue collection and national security.

The customs chief said efforts are being put in place to maximise benefits of technology and build the command’s manpower to meet with the growing challenges of modern trade.

 

While addressing maritime journalists in his Apapa office, Musa identified swift dispute resolution as a key component to facilitate trade. He said the command has put in place a faster mechanism to address any area of disagreement in interpretations of guidelines for duty collection and other related matters.

 

He added that a committee put in place for disputes resolution meets as soon as any dispute arises to avoid port users incurring costs caused as a result of delays in resolving such disputes.

 

According to him, there is a quicker process of bringing issues to his attention and contacting the headquarters where necessary to avoid delays associated with such disagreements. He said the command has stepped up efforts at keeping officers and relevant stakeholders abreast with the use of technology for the purpose of customs operations.

 

The Controller disclosed that senior officers and licensed customs agents are being trained at the command’s Information Communication Technology (ICT) Centre on the latest Nigeria Customs Information System (NICIS 2) in batches.

 

Musa said the training and retraining of customs personnel and stakeholders will continue with a view to getting as many persons as possible knowledgeable in the workings of the system.

 

He also stressed the need for all stakeholders to increase their levels of compliance with rules and improve on their knowledge as ways of achieving seamless flow of trade thereby achieving faster clearance of goods from the port.

The Controller also advised the maritime media to uphold the ethics of their profession and be fair and truthful in all they do.

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Early rainfall to boost Nigeria’s cocoa mid-crop

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Nigeria’s mid-crop cocoa output for 2017/18 could rise by 15 per cent from last season, helped by a mix of rainfall and sunshine in the main growing regions which has helped the trees, President of Cocoa Association of Nigeria (CAN) Sayina Riman said in a recent interview with Bloomberg.

 

Drought cut last season’s mid-crop harvest by 40 per cent. The dry weather continued into the main crop of the new season.

 

Riman said the drought affected the trees, reducing output of between 300,000 tonnes and 320,000 tonnes projected at the beginning of the 2017/18 season.

 

He said that early rains in March and April have helped boost the mid-crop, which could see the season’s output close at around 290,000.
Riman farms on a 170 hectare cocoa plantation in Nigeria’s second-biggest region of Cross Rivers.

 

The cocoa season in Nigeria runs from October to September, with an October-to-February main crop and a smaller light or mid-crop that begins in April or May and runs through September.

 

“Despite the drought of last year which affected cocoa we believe we would be close to 290,000 tonnes for 2017/18 season,” Riman told Reuters.

 

The International Cocoa Organisation (ICCO), however, gives much lower estimates of Nigerian cocoa output. It forecast last season’s production at 225,000 tonnes.

 

Riman did not give a reason for the discrepancy. Nigerian government production figures are also significantly higher than ICCO estimates.

 

Nigeria has recently emerged from recession and a currency crisis which caused a chronic dollar shortage, forcing exporters to under-invoice their goods in order to use the foreign exchange black market to get premium for their hard currency.

 

The action caused the West African country slip to the sixth producer of cocoa in the world at the peak of the crisis. Riman said Nigeria was getting back to number four grower as exporters now use the official currency markets.

Riman said Nigeria was working on improving its bean quality especially with renewed demand from Europe.

 

However, bean count, a measure of the number of beans needed to produce 100 grams of cocoa, reached as high as 140 for the main crop.

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Rising Nigerian bonds drags yields down

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Nigeria’s local-currency bonds are on a roll, rising for the last eight days and driving their yields below Turkey’s for the first time in more than two years.

 

The average rate on Nigerian government bonds has fallen around 400 basis since an August-peak to 13 per cent. Yields are now 100 basis points below the Central Bank of Nigeria’s benchmark interest rate of 14 per cent, where its been held since July 2016.

Investors have piled into the naira market thanks to slowing inflation, a stable currency and rising Brent crude prices, which climbed about 25 per cent in the past six months to more than $70 a barrel. In contrast, they’ve turned bearish on Turkey, which has the worst-performing local bonds in emerging markets this year, because of accelerating inflation and loose monetary policy.

 

Central Bank Governor, Godwin Emefiele, may be tempted to commence his long-touted easing cycle and help revive the economy that has faltered since the 2014 oil crash. While that would reduce the attractiveness of naira assets, Nigerian yields are still high relative to other major emerging markets. Aside from Turkey, Argentina and Egypt’s bonds are the only ones to yield more in the Bloomberg Barclays EM Local Currency Index.

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