Business

BERLIN (AP) — German businesses and public institutions should heat their offices no higher than 19 degrees Celsius (66.2 degrees Fahrenheit) this winter to help reduce the country’s consumption of natural gas, Germany’s economy minister said Saturday.

Germany, the European Union’s biggest economy, is quickly trying to wean itself off using natural gas from Russia in response to Moscow’s attack on Ukraine. However Germany uses more Russian gas imports than many other EU nations. Russia has already cut off gas exports to several EU nations, and officials fear Moscow will use the gas exports as a political weapon to get sanctions against Russia reduced — or even cut the exports to Europe off altogether in the winter, when demand is the highest.

Economy Minister Robert Habeck said while the EU’s 27 countries have pledged to cut their gas use by 15% from August compared to the previous five-year average, Germany needs to reduce its consumption by 20%.

Habeck is also proposing banning the heating of non-commercial private pools; switching off heating in common areas of public buildings, such as foyers; and switching off the lights on public billboards between 10 p.m. and 6 a.m.

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Follow all AP stories on developments related to the war in Ukraine at https://apnews.com/hub/russia-ukraine.

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(Reuters) – Brazilian power company Eletrobras on Friday reported its second-quarter net income fell 45%, hit by the provision for losses in investments.

In the first earnings report since its privatization, Centrais Eletricas Brasileiras SA, as the company is formally known, posted a net income of 1.4 billion reais ($276.03 million).

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6% to 4.861 billion reais from the previous year.

Net operating revenue reached 8.856 billion reais, up 19%.

In June, Brazil’s government diluted its stake in Eletrobras, Latin America’s largest utility, through a share offering that raised about $6 billion and lured global investors.

($1 = 5.0719 reais)

(Reporting by Peter Frontini)

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(Reuters) -Net profit at Grupo SURA, Colombia’s largest investment company, rose 30.3% in the second quarter from the year-earlier period, boosted by higher financial income and lower COVID claims, the company said in a statement on Friday.

The firm’s net profit for the three-month period climbed to 557.6 billion pesos ($132 million).

Grupo SURA’s revenue for the quarter hit 7.5 trillion pesos, up 23.1% from the year before, being the quarter with the highest revenues in the company’s history, according to the statement.

The company said its net income reflected an uptrend with its different lines of insurance, and that COVID claims declined

by 97% compared to the same period last year.

Grupo SURA operates in more than 10 countries via holdings in financial services, foodstuffs, cement, energy and infrastructure, as well as investment firms.

($1= 4,231.45 Colombian pesos)

(Reporting by Valentine Hilaire)

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By Ahmed Aboulenein

WASHINGTON (Reuters) – Big Pharma spent more than any other industry to lobby Congress and federal agencies this year, a Reuters analysis shows, but still suffered a major defeat after failing to stop a bill that allows the government to negotiate prices on select drugs.

Despite the pharmaceutical industry’s spending at least $142 million on lobbying efforts, the $430 billion Inflation Reduction Act to change climate, health and tax policies will become law. It cleared its largest hurdle last week with passage in the Senate, without any Republicans joining Democrats in voting for the bill, followed by passage by the U.S. House of Representatives on Friday. [nL1N2ZO2OV]

President Joe Biden will sign it into law next week.

The bill’s imminent enactment represents a rare legislative defeat for the pharmaceutical industry and sets a precedent for curbing drug prices in the world’s most lucrative market for medicines, according to congressional and industry officials.

“This is a major first step forward,” Democratic Senator Patty Murray, chair of the Senate’s health committee, told Reuters. “It is the first time we’ve been able to make this kind of step to lower prices on pharmaceuticals … which will set the stage for us to do more.” Health policy experts say the bill reflects the pharma industry’s weakening influence on the Democratic Party and that its main argument against price negotiation — that it stifles innovation — is no longer persuasive for the public.

A Kaiser Family Foundation poll in October found that 83% of Americans, including 95% of Democrats and 71% of Republicans, want the federal Medicare health plan for seniors to negotiate prices, a provision of the bill.

“The pharma guys upped the ante in throwing everything but the kitchen sink against this,” said Senator Ron Wyden, a Democrat who chairs the finance committee.

The industry’s powerful trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), urged senators in a public letter to reject the bill. Its president, Stephen Ubl, told Politico that lawmakers who vote for it would not “get a free pass.”

“Few associations have all the tools of modern political advocacy at their disposal in the way that PhRMA does,” he said.

A PhRMA spokesperson said the group would continue to work with all lawmakers. He did not address Ubl’s comments about holding lawmakers accountable.

“We may not agree on every issue, but we believe engagement and dialogue is important to promoting a policy environment that supports innovation, a highly-skilled workforce and access to life-saving medicines for patients,” said spokesperson Brian Newell in an email.

PHARMA’S PLAN A Reuters analysis of lobbying and campaign contribution data from OpenSecrets shows that the pharmaceutical industry spent at least $142.6 million on lobbying Congress and federal agencies in the first half of 2022, more than any industry, and at least $16.1 million on campaign contributions during the current mid-term election cycle that started in January 2021.

Almost two-thirds of the money spent on lobbying, around $93 million, came from PhRMA and its member companies.

The pharma campaign argued that prescription drugs do not contribute to inflation, citing an average 2.5% rise in drug prices in the past year compared with a 17% rise in health insurance prices.

Critics say the figures combine high-priced brand name drugs with much lower-cost generics, masking the impact on patients’ costs. A KFF study estimated that prices increased faster than inflation for half of all drugs covered by Medicare in 2020.

The industry has long warned that price curbs in the U.S. market would hamper companies’ ability to invest in developing new drugs.

With help from Democrats backed by the industry, the bill’s provision for drug price negotiations was scaled back in November, allowing Medicare to focus on an annual maximum of 20 of the costliest medicines by 2029, instead of an initial proposal to help reduce prices for 250 treatments.

Opponents to the more dramatic curbs included Senator Kyrsten Sinema and Representative Scott Peters, two of the biggest recipients of industry donations, at more than $201,000 and $320,000, respectively, according to OpenSecrets data.

“We created a good space for investors to be able to recoup their investment which continuously has set out to develop new drugs,” Peters told Reuters.

“I still think they came out okay on this.”

WHAT NOW?

Democratic staffers, industry executives and policy experts said that the bill’s broad popularity, combined with pressure on Democrats to pass meaningful legislation ahead of midterm elections in November, helped overcome the pharma industry campaigning.

“With this vote I would imagine Pharma realizes they do not have a lot of friends left among Democrats,” said Larry Levitt, vice president for health policy at KFF. “Pharma sees this as the camel’s nose under the tent, and it probably is.”

The industry will likely try to mitigate the effects of the bill as much as possible, policy experts said.

“They will prosecute this through the courts. And they will, I suspect, try and alter the legislation” in the future, said Mark Miller, a former government health policy official who is now executive vice president of healthcare at Arnold Ventures.

The extent to which the bill might stoke fear for investors remains to be seen, given that many view pharmaceutical stocks as among the safer bets during an economic downturn.

“Sentiment is at a multi-year high for the US Pharma and we do not view the IRA drug reform as significantly changing investor positioning,” a note from JPMorgan analysts said.

(Reporting by Ahmed Aboulenein; Additional reporting by Richard Cowan in Washington and Lewis Krauskopf in New York; Editing by Michele Gershberg, Deepa Babington and Leslie Adler)

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(Reuters) – Global equity funds saw inflows in the week to Aug. 10 after six straight weeks of withdrawals, as investors took the view that the Federal Reserve might not be too aggressive with its interest rate hikes amid receding inflation worries.

According to Refinitiv Lipper, global equity funds lured $2.75 billion in their first weekly net purchase since June 22.

GRAPHIC: Fund flows: Global equities, bonds and money market (https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrwkykvm/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg)

The data released on Wednesday showed U.S. consumer prices were unchanged in July, which has raised expectations of a 50 bps hike by the Federal Reserve in its September meeting, rather than a 75 bps which was widely anticipated earlier.

A report showing a pick-up in the U.S. services industry also bolstered sentiment.

U.S. and Asian equity funds received $4.21 billion and $0.69 billion respectively, although European funds had outflows of $2.52 billion.

Among sector funds, consumer staples and healthcare gained $535 million and $389 million respectively, but tech and financials lost $412 million and $386 million respectively.

GRAPHIC: Fund flows: Global equity sector funds (https://fingfx.thomsonreuters.com/gfx/mkt/zjvqkbnmavx/Fund%20flows-%20Global%20equity%20sector%20funds.jpg)

Investors purchased about $5 billion of global bond funds, marking a second weekly inflow in a row.

Government bond funds attracted a net $2.25 billion in a second weekly inflow, however, investors sold short- & medium-term, and high yield funds of $1.66 billion and $47 million respectively.

GRAPHIC: Global bond fund flows in the week ended Aug 10 (https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgobkkpb/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Aug%2010.jpg)

Money market funds recorded outflows of $12.51 billion, the biggest in six weeks.

Data for commodities funds showed energy funds attracted $101 million in net buying, the first weekly inflow in seven weeks, but precious metal funds lost $394 million.

An analysis of 24,438 emerging market funds showed bond funds attracted purchases worth $766 million while equities notched up a fourth weekly capital outflow of $488 million.

GRAPHIC: Fund flows: EM equities and bonds (https://fingfx.thomsonreuters.com/gfx/mkt/xmvjombyepr/Fund%20flows-%20EM%20equities%20and%20bonds.jpg)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru;Editing by Elaine Hardcastle)

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By Manoj Kumar

NEW DELHI (Reuters) -India’s consumer inflation dipped to 6.71% in July, easing for the third month in a row, helped by a slower increase in food and fuel prices and adding to expectations that the central bank may rein in the pace of its policy rate hikes next month.

The year-on-year figure, published on Friday by the National Statistics Office, was marginally lower than the 6.78% forecast by economists in a Reuters poll. But it remained above the central bank’s 2-6% tolerance band for a seventh month in a row.

After months of eye-watering inflation readings across much of the world, policymakers are wondering if they may have seen the peak of price pressures given recent evidence of moderation in Japan, China and the United States.

However, few are willing to make definitive calls with the Ukraine war and pandemic continuing to tie up supply lines.

“Inflationary pressures have eased,” a government source said on Thursday, adding that the government and central bank would continue to take steps to bring retail inflation below 6%.

Economists said they expect the Reserve Bank of India (RBI) to raise policy rate by at least 25 basis points next month as real interest rates are still negative.

The RBI’s Monetary Policy Committee has lifted the key repo rate by 140 basis points since May, including by 50 bps this month, while the government imposed restrictions on export of crops including wheat and sugar while cutting fuel taxes.

Food inflation, which accounts for nearly half the CPI basket, was 6.75% in July, also easing for the third month in a row. Prices of edible oil and some metals fell.

Core inflation, excluding volatile food and energy prices, was estimated at 5.79-5.80% in July, lower than 5.96- 6.2% estimates in June, said two economists, after the data release.

India does not release core inflation data.

(Reporting by Manoj Kumar; Editing by Mark Heinrich and John Stonestreet)

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(Reuters) -U.S. import prices posted their first decline in seven months in July, the Labor Department said on Friday, on lower costs for both fuel and nonfuel products.

Import prices fell by a more-than-expected 1.4% last month after rising 0.3% in June, the data showed. It was the largest monthly drop since April 2020. In the 12 months through July, import prices increased 8.8% after rising 10.7% in June.

Economists polled by Reuters had forecast import prices, which exclude tariffs, would decline 1.0% from June.

The report follows other tentative signs earlier this week that inflation has peaked, with U.S. consumer prices unchanged in July due to a sharp drop in the cost of gasoline, after advancing 1.3% in June, although underlying price pressures remained elevated. Producer prices also declined last month on the back of lower energy costs.

The Federal Reserve is mulling whether to raise its benchmark overnight lending rate by another 50 or 75 basis points at its next policy meeting on Sept. 20-21, as the U.S. central bank battles to cool demand across the economy and bring inflation back down to its 2% goal. The Fed has raised its policy rate by 225 basis points since March.

Imported fuel prices dropped 7.5% last month after surging 6.2% in June. Petroleum prices declined 6.8%, while the cost of imported food fell 0.9%, the largest one-month drop since November 2020.

Excluding fuel and food, import prices dropped 0.5%. These so-called core import prices decreased 0.6% in June. They rose 3.8% on a year-on-year basis in July. The strength of the U.S. dollar is helping keep a lid on core import prices.

The dollar has gained around 10% against the currencies of the United States’ main trade partners since the beginning of the year.

The report also showed export prices fell 3.3% in July after accelerating 0.7% in June. Prices for agricultural exports declined 3.0%, with the fall led by lower prices for soybeans, wheat and cotton.

Nonagricultural export prices fell 3.3%. Export prices rose 13.1% on a year-on-year basis in July after increasing 18.1% in June.

(Reporting by Lindsay Dunsmuir; Editing by Paul Simao and Mark Heinrich)

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BRASILIA (Reuters) -Brazil’s central bank chief Roberto Campos Neto said on Thursday it is not true that banks lose money with the Pix instant payment system, launched by policymakers in late 2020.

Speaking at an event hosted by Brazil’s banking lobby group Febraban, he acknowledged Pix affected revenues to some degree, since in the past banks charged people for transfer fees, while Pix is free. On the other hand, it offers new services, increases the volume of transactions and reduces cash costs for banks, said Campos Neto.

The platform, which is owned by Brazil’s central bank, has been a huge success in the country and winner of international plaudits. It recently surpassed the volume of credit and debit card transactions in the country.

Campos Neto said central bankers from other countries have asked about how Pix was implemented, and quoted them as saying their domestic banks would never collaborate.

“In Brazil, they collaborated and that’s why we have Pix. Banks understood that, in the end, it’s a win-win model.”

President Jair Bolsonaro recently criticized Febraban’s support for manifestos defending democratic institutions saying banks were dissatisfied with Pix.

Speaking about the digital currency central bank (CBDC) model being developed in Brazil, Campos Neto said he would like to see it up and running in 2024.

According to the central bank’s chief, the Brazilian CBDC will promote new business and will allow for an interaction between physical and digital money, leading banks to start looking at balance sheets in the form of tokens.

“Our central bank digital currency is nothing more than a tokenized deposit,” he said.

(Reporting by Marcela Ayres; Editing by Rosalba O’Brien and Josie Kao)

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SAO PAULO (Reuters) – JBS SA , the world’s largest meatpacker, posted an almost 10% drop in net profits, to $766 million, driven by the relative weakness of its U.S. beef and pork units in the second quarter, according to an earnings statement on Thursday.

Still, it beat analysts forecasts nE6N2XO018.

JBS reported a 4.6% fall in revenue for its U.S. beef division, which is normally the company’s cash cow, while earnings before interest, tax, depreciation and amortization, a measure of operating profitability known as EBITDA, slumped 55% compared with the same year-ago quarter.

U.S meat processors are now reeling from the effects of lower cattle availability in North America, where a drought is leading ranchers to terminate animals rather than sending them for processing.

In the second quarter, overall U.S. pork exports fell 17.7% due to a drop in demand from China, Japan and Canada, JBS said citing USDA data.

As such, results for its U.S. pork division were affected, with JBS sales for that unit dropping 3.2% on an annual basis, to 10.3 billion reais.

JBS’ Pilgrims Pride poultry united, however, provided a silver lining in the United States, as its chicken sales rose by 18.3% to 22.7 billion reais.

In Brazil, likewise, JBS’ Seara processed foods division did well.

Seara sells about 47% of its output in Brazil, and that business brought in 5 billion reais ($969.24 million) last quarter, 20% more than a year ago, JBS said.

To fend off cost inflation, Seara was able to raise prepared products prices by 19% on average, while increasing sales volumes by 5%.

At the same time, Seara’s export sales reached $1.1 billion, a 27.9% rise from the same quarter a year ago.

In Brazil, JBS beef products sales rose by almost 11% to 14.1 billion reais, in spite of a 12% fall in cattle processing because China temporarily halted imports from a large plant.

($1 = 5.1587 reais)

(Reporting by Ana Mano; Editing by Leslie Adler and Marguerita Choy)

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HOUSTON (Reuters) -U.S. oil refiner Citgo Petroleum on Thursday reported a second quarter profit that surged to $1.28 billion on higher crude processing volumes and stronger margins.

The eighth largest U.S. oil refiner’s three plants processed 776,000 barrels of oil per day (bpd), up from 732,000 bpd a year earlier, it said. Refinery utilization rates, a key measure of efficiency, rose to 101% from 95% in the first quarter this year, the company’s parent posted on Twitter.

Citgo ended the quarter with $2.2 billion in cash and proceeds from an accounts receivable securitization, according to the PDVSA ad hoc twitter posts. A spokesperson was not immediately available to comment on the tweets.

The company last year returned to profitability after back-to-back annual losses during the coronavirus pandemic. Its first quarter $245 million profit was more than 10 times the year-ago level on higher processing volumes, higher exports and stronger margins.

On Thursday, Citgo said it was offering to buy $286 million in notes due in 2024 https://www.citgo.com/newsroom/press-releases/2022/citgo-holding-inc-announces-offer-to-purchase-up-to-286-231-million-in-aggregate-principal-amount and repay nearly $483 million of a term loan facility.

Citgo, a subsidiary of Venezuelan state-run oil firm PDVSA, is run by boards appointed by Juan Guaido, whom Washington recognizes as Venezuela’s legitimate leader.

The company, which is protected by U.S. executive orders from creditors trying to seize Venezuela’s foreign assets, would be willing to resume Venezuelan heavy crude imports if the U.S. government authorizes the flow, Citgo’s CEO said in July. The crude imports are key to feeding its refineries’ deep conversion units.

(Reporting by Marianna Parraga, writing by Gary McWilliams; Editing by David Gregorio)

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