Markets & Finance

European Movers: Xstrata, BNP Paribas, TNT


Plus more European stocks making headlines in Wednesday's market

UK

XSTRATA Down GBP0.33 to GBP31.67... Strong copper boosts 1H, bid for Lonmin - Announces 1H revenue of US$16.092bn, +13%; EBITDA US$5.694bn; EBIT US$4.513bn, -4%; basic EPS US$2.95. raises interin to US$0.18 from US$0.16. ING says results are better than its expectations, with good performance from copper, offset by slightly weaker than expected performance in coal and alloys. Co. is launching a GBP33 per share bid for Lonmin, valuing the group at around GBP5bn. Lonmin board rejects the offer, calling it opportunistic. Xstrata Coal is to proceed with the AUD1.1bn development of the Mangoola Coal open cut thermal coal mine in New South Wales, Australia.

STANDARD LIFE Down GBP0.01 to GBP2.43... 1H EEV op profit up 51%, tops estimate - Posts 1H EEV op PTP GBP534m, +51%; life and pensions net flows GBP2bn, +15%. Says despite difficult market conditions, outlook for net flows, sales and profit is positive. Analyst forecast for EEV op profit GBP525m.

ENRC Up GBP0.67 to GBP10.17... 2Q output up, sees organic growth in 2H - Says 2Q volumes rose y/y with ore grades remaining broadly consistent. Expects continued organic growth in 2H across all divisions.

LSE Up GBP0.39 to GBP9.20... Equity trades up 35% in July - Co. says a total of 24.3m equity trades were carried out across the group, in July, up 35% y/y with a combined value of GBP263.5bn, down 4%. Adds the average daily number of trades during the month was 1.1m, +29% y/y, while the average daily value traded decreased 8% to GBP11.5bn. Goldman starts with neutral and GBP9.00 target.

ITV Down GBP0.04 to GBP0.42... Interest costs to rise GBP8m if rating cut - Posts 1H op EBITA GBP121m, -20%; adj PTP GBP 91m, -28%; DPS 0.675p, -50%. ITV Family NAR +1%. 8M TV NAR to August down 1%. Expects ITV NAR for September down 20% (total market -17%) with little visibility beyond. Co. is in touch with credit ratings agencies and if its rating is cut to junk then interest costs will rise by GBP7m-GBP8m pa. Adds liquidity is not an issue currently. Fitch downgrades outlook to negative from stable. Affirms BBB- rating. Credit Suisse cuts target to GBP0.50 from GBP0.70, keeps neutral. Expects consensus earnings to fall by c. 21% in 2008 and by 24% in 2009.

LIBERTY INTL Down GBP0.26 to GBP9.44... 1H NAV down 13.3% - Posts 1H NAV GBP10.95/sh, -13.3%; u/l PTP of GBP57m, -17.3%; net rental income GBP194m. Is confident can meet challenges under market conditions.

FRANCE

BNP-PARIBAS Up EUR 3.19 to EUR 65.06... 2Q profit tops expectations - Co. hails CIB 'rebound' - Co.'s 2Q net profit of EUR 1.505bn, while 34% lower y/y, is a touch higher than expected. Revenues also beat consensus, coming in at EUR 7.517bn, down 8.5% y/y. Gross operating income of EUR 2.665bn, down 20.8% y/y, also came in better than expected. Co. labels its CIB results a 'rebound', with revenues down 24.5% y/y, but up 41.3% q/q. The negative impact on counterparty risks for debt insurers affected by the credit crunch was EUR 542m. Co. says it 'is not under any pressure to raise capital' and adds its 'earnings power enables it to finance its organic growth whilst maintaining a solid dividend policy'.

SOC GEN Up EUR 1.92 to EUR 67.02... Goldman Sachs adds to Conviction Buy List - Yesterday, Co. unveiled better-than-expected 2Q results. Goldman Sachs adds Co. to its Conviction Buy List and lifts target to EUR 84. Says the results demonstrated impressive resilience and recovery of CIB revenues. Secondly, thinks the write-downs of risky assets, even assuming more conservative marks than Co. has done, suggest that the risk of a capital increase is low. In broker action, Deutsche Bank lifts target to EUR 76 from EUR 74, keeps buy; Merrill Lynch ups target to EUR 80 from EUR 76, keeps buy. JP Morgan cuts target to EUR 83 from EUR 85, keeps overweight. Credit Suisse ups target to EUR 69.00 from EUR 64.00, keeps neutral. Citigroup raises target to EUR 59 from EUR 52, keeps sell. Notes Co. included the Muscat gains in revenues, accounting for EUR 259m. Ex-Muscat, argues the beat would be c.4%. Adds costs increased 4% y/y and were 5% worse than consensus.

BIC Up EUR 3.79 to EUR 39.54... 1H/2Q sales ahead of expectations - Announces 2Q08 net sales of EUR 392.4m, -1.6% (+5.8% CER) (1H sales EUR 700.50m); gross profit EUR 188.30m, -0.9% (1H EUR 342.9m); op income EUR 62.9m (1H EUR 101.10m); net income EUR 45.50m (1H EUR 70.60m); EPS EUR 0.94 (1H EUR 1.45). Maintains FY08 outlook despite the uncertain overall economic environment.

GERMANY

COMMERZBANK Down EUR 0.32 to EUR 21.63... 2Q tops forecasts but more writedowns fears weigh - Co. reports better-than-expected 2Q net profit of EUR 817m, up 6.4% y/y and boosted by tax revenue of EUR 386m. Operating profit of EUR 484m is also ahead of expectations. The 2008 outlook remains unchanged. One of caution, that is, as further writedowns may come about. For Sal Oppenheim's first take on the results, see Broker Views & News - Germany.

MUNICH RE Up EUR 2.56 to EUR 112.93... Sticks with dividend as 2Q profit halves - Co. tabled a 2Q operating result of EUR 1.023bn and net income before minorities nearly halved to EUR 621m. Reiterated that it expects full-year net earnings 'well above' EUR 2bn and is maintaining its EUR 5.50 per share dividend payment for 2008. DZ Bank says the combined ratio of 99.4% is slightly disappointing. See Broker Views & News - Germany.

HENKEL Up EUR 1.14 to EUR 27.33... 2Q misses expectations but price hikes news cheers - Co.'s 2Q EBIT slid to EUR 113m, down from EUR 339m a year ago and weaker than expected, on sales 11.4% y/y higher at EUR 3.67bn. Quarterly net profit fell 84% to EUR 38m after minorities. Outlook-wise, Co. widened its expectations range for 2008 organic sales growth to 3-5% from 3-4%. The announcement on price hikes lifts the stock higher. Co. plans to lift prices by 5-10% in 2H.

ITALY

ATLANTIA Up EUR 1.09 to EUR 18.20... 1H net profit up 7% to EUR 366.6m - Co. has unveiled that 1H net profit rose 7% to EUR 366.6m, lifted by toll hikes as a slowing economy bit into traffic growth on its highways. Keeps its 2008 forecasts.

A2A Down EUR 0.01 to EUR 2.28... Posts 1H net profit of EUR 159m - Co. reports 1H net profit of EUR 159m and EBITDA of EUR 527m. Regarding the outlook, Co. expects consolidated 2008 results to be 'not less' than those of 2007.

ITALMOBILIARE Up EUR 1.32 to EUR 48.97... Deutsche Bank trims target to EUR 40 from EUR 59.70. Says that outlook for Co. remains poor with Italcementi having reported weak 1H results. Says that for 2008, Co. assumes a further slowdown of activity in mature markets and a deterioration of the macro conditions in the emerging markets. Even though Co. states that it will achieve costs efficiencies. The FY08 guidance is for a decrease in operating profit versus a flat forecast previously. Estimates that Co.'s operating profit will decrease 8% y/y to EUR 919m. Keeps hold rating.

NETHERLANDS

TNT Up EUR 1.35 to EUR 25.28... Says not aware of new approach - Traders say there is renewed talk of bid speculation on Co. A price of EUR 30.25 per share is being mentioned by some sources. One source told MarketScope that UPS and CVC Capital are in final stages to team up to bid for Co. Source says a bid could come within the next month. However, this is unconfirmed speculation and CVC Capital said does not comment on the rumor. Co. says has heard of the talk this morning but is not aware of an approach. Note that the FT wrote recently that Fedex would be interested in Co. but that talks between the two had ended.

NORDICS

OLD MUTUAL Down SEK1.30 to SEK11.40... US life set to fall / Merrill downgrades - Co. unveils 1H net client cash inflows of GBP3.2bn; PTP GBP835m, -2%; basic EPS 11.2p; FUM down 7% from 31 December 2007 to GBP259.4bn; Life APE sales up 2% to GBP872m; mutual fund sales down 18% to GBP3.420bn; injection of GBP150m into US business. CEO Jim Sutcliffe says Co.'s decision to withdraw a string of US guaranteed products, on the back of hedging troubles, could result in a 15-20% drop in US life sales in 2008. Merrill Lynch downgrades to neutral vs buy following disappointing 1H results and the additional US charges. Keeps tgt at GBP1.17.

AKER SOLUTIONS Up NOK6.50 to NOK114.50... Carnegie sees buying opportunity as Co.'s shares fell sharply yesterday on the back of 'a false story about another delay to Kashagan'. Points out Co. disclosed good Q2 result last week, and says worries about FY2008 guidance is now gone.

CARLSBERG Up DKK24.50 to DKK464.00... ING upgrades/Carnegie and Deutsche lift TP - ING upgrades to buy from hold and cuts target to DKK514 from DKK555. Says consensus figures should increase due to 2Q results and guidance. Carnegie lifts target to DKK600 from DKK550 keeps outperform. Deutsche lifts target to DKK490 from DKK470, keeps hold.

SPAIN

FERROVIAL Down EUR 0.30 to EUR 32.60... BAA secures refinancing plan - BAA has secured support for its refinancing plan to migrate all series of existing bonds into a new ring-fenced structure supported by Heathrow, Gatwick and Stansted airports. Meanwhile, The Times writes that BAA has started legal action against Ryanair after the budget carrier refused to pay higher landing fees.

SANTANDER Unchanged at EUR 12.28... Chavez to offer EUR 775m for unit - Hugo Chavez aims to offer EUR 775m for Co.'s Venezuelan unit, Bolsa Cinco reports quoting El Nacional newspaper. Adds Co. will not sale it for less than EUR 1.164bn. However, according to the press Chavez has said that he expects a quick agreement in the nationalization of the local unit.

SWITZERLAND

NOVARTIS Down CHF1.95 to CHF61.50... JPM downgrades / FDA approves vaccines - JP Morgan downgrades to neutral from overweight; keeps CHF64 target . Cites valuation reasons. Sees no near-term fundamentals or newsflow to drive further multiple expansion. Prefers Roche as a Swiss play. In other news, the FDA announced that it has approved this year's seasonal influenza vaccines that include new strains of the virus likely to cause flu in the United States during the 2008-2009 season. The six vaccines and their manufacturers include Co., GSK and Sanofi.

STRAUMANN Up CHF15.00 to CHF262.00... Lehman cuts tgt / US lifts Biora ban - Lehman cuts target price to CHF280 from CHF335, underweight. Broker regards the dental implant market as facing significant challenges both immediate and long term and remains cautious on the outlook for both Co. and Nobel Biocare. In other news, US health authorities have lifted the import detention, in place since the beginning of last year, on Co.'s Biora products following a re-inspection of the Biora facility in Sweden by the FDA.


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