British Gas profits leap from £72m to £751m in a year

Kalyeena Makortoff
Thu, 15 February 2024 

The sharp increase in British Gas profits pushed Centrica’s pre-tax profit to £6.5bn for 2023, compared with a loss of £240m a year earlier.Photograph: Neil Hall/EPA

Annual profits at British Gas have soared nearly tenfold after it tried to recoup costs from the energy crisis, while its parent company announced another £144m payout to shareholders.

Centrica released figures on Thursday showing that British Gas, which supplies energy to UK households and businesses, showed its profits jumped to £751m in 2023, up from £72m a year earlier.

The big increase in earnings came after the regulator, Ofgem, raised the energy price cap and allowed the company to recoup some of the costs of having to sell energy below wholesale price to its 10 million customers during the energy crisis.

Suppliers were forced to protect households from a spike in prices, which rose as a result of the Covid-19 lockdowns and Russia’s invasion of Ukraine, causing dozens of companies to fail.

The price cap rise, and subsequent increase in British Gas profits, pushed Centrica’s pre-tax profit to £6.5bn for 2023, compared with a loss of £240m a year earlier. The company’s preferred figure, which allows for bespoke adjustments, show profits fell 17% to £2.8bn for the year to December.

The chief executive, Chris O’Shea, said efforts to recoup costs supported British Gas profits only in the first half of the year, and the division took a £200m hit in the final six months of 2023.

He defended the remaining profits, which enabled Centrica to pay a final dividend worth £144m to its shareholders. “I said this befor and I want to take this opportunity to say it again: to be sustainable you must make a profit. Which is super important because every consumer in the UK is paying £88 for the failure of other energy suppliers in the last few years. If more companies fail, these costs go on to customer bills.”

The final dividend brings Centrica’s one-off payouts to investors to £217m this year. Centrica said it was also voluntarily putting aside £40m to support customers, on top of the £100m spent in 2023.

O’Shea said the company’s strong performance was unlikely to last but he was confident shareholders would continue to reap rewards.

“As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment,” he said.

“Our performance over the past year has reinforced our confidence in delivering against our medium-term sustainable profit ambitions and continuing to create value for shareholders.”

The sharp increase in British Gas profits prompted a backlash from the union Unite, which is calling for the company to be nationalised.

“Centrica is still raking in astonishingly high profits off the back of exorbitant energy bills that are nearly double what they were three years ago, Unite’s general secretary, Sharon Graham, said.

“There is no point beating around the bush: the only way to stop households and businesses being ripped off by the profiteers in our energy supply chain is public ownership. It is an absolutely affordable option that would protect the national interest. Our politicians need to decide whose side they are on and make the right choices.”

British Gas profits surge more than eightfold to £800m

• British Gas owner Centrica could claw back money it lost during energy crisis 

By JANE DENTON

15 February 2024

British Gas owner Centrica benefited last year from being able to claw back money that it had lost during the energy crisis.

Adjusted operating profit in the business’s retail unit, namely British Gas, soared from £94million to £799million as a result of the cost recovery, results published on Thursday show. 

The group was one of several energy suppliers regulator Ofgem permitted to recover costs that they had racked up during the crisis.

However, Centrica' annual adjusted pre-tax profit fell to £2.8billion, compared with £3.2billion the year before.

Centrica said commodity prices had been 'significantly lower' than the previous year when gas prices spiralled at the outbreak of the Ukraine war. 

Pay matters: Last month, Centrica boss Chris O'Shea told the BBC his £4.5m pay package for last year was 'impossible to justify'

This was lower than the record £969million that the business had made in the first half of the year alone.

This is because British Gas was allowed to recover the extra £500million through the price cap in the first six months of the year.

On a pre-tax basis, the company swung to a pre-tax profit of £6.47billion from a £383million loss a year earlier, driven by its British Gas energy unit.

Centrica shares rose 4.11 per cent or 5.52p to 139.92p on Thursday, having surged over 40 per cent in the last year.  

Boss Chris O'Shea, said: 'We are pleased to report that this strong underlying operational performance has continued into early 2024.

'As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment.

'Our performance over the past year has reinforced our confidence in delivering against our medium-term sustainable profit ambitions and continuing to create value for shareholders.'

Centrica, which returned £800million of cash to shareholders last year, lifted dividends from 4p a share from 3p the previous year. 

On the up: Adjusted operating profit in the business’s retail unit, namely British Gas, soared from £94m to £799m

It added: 'Whilst we are starting to see material commodity price falls, today we have committed another £40million, bringing the total voluntary customer support to £140 million, more than any other supplier.'

It said over 5million UK energy customers had migrated to its new technology platform during the period. 

Centrica also said it had paid over £1billion in tax in the last year and created 1,000 new UK based jobs.        

Andrew Keen, a managing director at Edison Group, said: 'Centrica's FY23 results demonstrate the company's ability to create value through a balanced portfolio, despite facing various challenges. 

'The adjusted operating profit of £2.8billion, while experiencing a slight 3 per cent decrease from the previous year when excluding disposed assets, reflects a resilient performance. 

'Notably, the retail sector saw a significant £700million increase, with British Gas Services & Solutions returning to profitability. 

'However, optimization and infrastructure faced challenges due to lower prices and market volatility, declining £300million and £900million, respectively.'

He added: 'CEO Chris O'Shea has praised the company's resilience, attributing it to Centrica's balanced portfolio and effective execution of its strategic plan, enacted in July 2023. 

'Looking ahead, while the company anticipates continued strong performance, it remains cautious, expecting a medium-term expectation of £150-£250million in retail, mindful of one-off benefits in the past year. 

'Despite uncertainties, Centrica 's solid foundation and strategic alignment position it well for navigating future challenges.'

Last month, British Gas was named as the worst energy firm for customer satisfaction by consumer group Which?. 

It found there was little to separate the remaining firms with the lowest customer scores – Boost, Scottish Power, Ovo Energy, Shell Energy, EDF Energy and E.ON Next.

At the other end of the scale, Octopus Energy, Ecotricity and E (Gas & Electricity) achieved the highest customer scores.

British Gas, which supplies more than a fifth of households in Britain, received an overall score of 56 per cent.

Last month, O'Shea told the BBC his £4.5million pay package for last year was 'impossible to justify.'  

Centrica boss renews calls for ‘social tariff’ amid higher British Gas profits

15 February 2024

Energy costs. Picture: PA

Cheaper energy for the worst off in society is ‘the best thing we can do for consumers’, Chris O’Shea said.

The boss of British Gas’s parent company has renewed calls for a “social tariff” which will let poorer Britons pay less for their gas and electricity, as the energy supplier revealed a big jump in profit.

Centrica chief executive Chris O’Shea said that a special tariff for the worst off would be “the best thing we can do for consumers”.

It came as it was revealed Centrica’s retail arm, which is mainly made up of British Gas, saw profit soar from £94 million in 2022 to £799 million last year.

All of this profit came from the first half of the year.

What I'm focused on is how do we fix this in energy and that's why we need a social tariff, that's why we need the standing charge to disappear

Chris O’Shea, Centrica

Most of this was because of the way the energy price cap works.

British Gas and other energy suppliers were in the first half of last year allowed to recoup some of the costs they had during the energy crisis.

For British Gas this added £500 million to its bottom line.

Mr O’Shea said that companies have to make a profit in order to stay healthy.

The collapse of dozens of unhealthy suppliers in the last couple of years has cost households around £88 each.

But more is needed to protect the poorest, the chief executive said.

“The poorest in society are really struggling but it’s not just the energy. It’s energy, it’s rent, it’s mortgages, it’s food and all manner of costs,” he said on a call with reporters.

“What I’m focused on is how do we fix this in energy and that’s why we need a social tariff, that’s why we need the standing charge to disappear.

Chris O’Shea was speaking as British Gas revealed an eight-fold increase in profit (Andrew Milligan/PA)

“I think that’s the best thing we can do for consumers. That will reduce the cost for the poorest in society, the people that are really, really struggling.”

Centrica’s adjusted profit fell to £2.8 billion before tax, compared with £3.2 billion the year before, the business revealed on Thursday.

On a statutory basis thanks to the way that Centrica buys energy in advance it made a profit of £6.5 billion last year before tax, up from a loss of £383 million in 2022.

The business said that it had hired 700 new people to work in its British Gas call centres.

In part thanks to that it saw an 8% fall in the amount of complaints it got per customer.

“We take care of our colleagues, they take care of our 10 million customers and the resulting performance takes care of the shareholders,” Mr O’Shea said.

The company revealed that customers used a little less energy last year than they had in 2022, but Mr O’Shea said it was impossible to say how much of this was thanks to efficiency upgrades, and how much was because of higher costs.

India curtails right to information in clampdown two months ahead of elections

Reporters Without Borders (RSF) condemns the oppressive climate for press freedom in India just two months ahead of general elections
Image: RSF
ORGANISATION:
RSF_en

Reporters Without Borders (RSF) condemns the oppressive climate for press freedom in India just two months ahead of general elections, with journalists being prosecuted, attacked, censored and denied access to “sensitive” areas. This is already curtailing the right to pluralistic and independent news reporting, RSF says.

Reporters and media outlets have been subjected to repeated harassment and intimidation by both state and non-state actors in recent weeks with the aim of silencing them or preventing them from covering sensitive issues. This is now a well-established trend in the run-up to the elections due to be held throughout the country in April and May.

“With just two months to go to the elections scheduled for April and May, journalists are being harassed by the authorities and subjected to multiple attacks aimed at silencing those who are outspoken. RSF condemns the oppressive climate that is taking hold in India and is liable to undermine pluralistic and transparent coverage of the electoral process. We call on the government to guarantee journalists’ safety and the right of access to news and information, and to end all harassment of media personnel.
South Asia Desk  Reporters Without Borders

National security provisions used against independent media

On 9 February, the government resorted to Section 69A of the Information Technology Act (amended in 2023), which allows it to block online access to reporting that poses a threat to the “security and integrity of India.” Its target was The Caravan, an online investigative magazine that is one of the few remaining independent media outlets.

The ministry of information and broadcasting gave The Caravan 24 hours to take down an investigative story headlined “Screams from the Army Post" about cases of murder and torture by the Indian army in the militarised northern territory of Jammu and Kashmir.Attacks against journalists

“Critical” journalists are attacked and smeared by armies of pro-government trolls on social media but they are also exposed to physical attacks. The latest targets include freelance reporter Nikhil Wagle, whose car was stoned and beaten by supporters of the ruling Bharatiya Janata Party (BJP) as he was on his way to speak at an event in the western city of Pune on the evening of 9 February.

This horrific attack came five days after Wagle posted an ironic comment about Prime Minister Narendra Modi and former Deputy Prime Minister (and BJP member) L.K. Advani on X (the former Twitter).

Shortly before the attack, a local BJP leader filed a complaint with the Pune police about Wagle’s post, accusing him of violating Penal Code Section 153 A (promoting enmity between different groups), Section 500 (defamation) and Section 505 (statements conducing to public mischief).

In comments to reporters after the attack, BJP state assembly representative Nitesh Rane said Wagle “got away easily.” And he added: “The work of Pune BJP has remained incomplete. Some time later the work should be completed, and if they can’t do it otherwise they should call me.” Escalation in reprisals against foreign reporters

Vanessa Dougnac, a French journalist based in India since 2001 reporting for French-language publications such as the newsweekly Le Point and the newspapers Le Soir and La Croix, was notified by the Ministry of Home Affairs on 18 January that her status as an Overseas Citizen of India (OCI) was being withdrawn because of her “malicious and critical” articles. Her work permit renewal application had been refused 17 months prior to that without any reason being given.Access denied to security “hotspots”

Journalists were denied access to Haldwani, in the northern state of Uttarakhand, when the demolition on 8 February of a mosque and a madrasa (Quranic school) – built without permission, according to the authorities – triggered a wave of violent protests in which five people were killed. The authorities ordered the police to shoot on sight, imposed a curfew and suspended Internet services. Suspension of Internet and mobile services

Blacking out communications is another repressive weapon to which the government readily resorts. Mobile and internet services have been suspended on more than one occasion in several states since the start of 2024. Several districts in Haryana – a state adjoining the capital – have been deprived of mobile Internet in the past few days as farmers' groups organised protest marches on New Delhi.

SpaceX moves incorporation to Texas from Delaware - Musk

Updated / Thursday, 15 Feb 2024 

A SpaceX plant in California

Rocket company SpaceX has moved its state of incorporation to Texas from Delaware, CEO Elon Musk said in a post on X, formerly Twitter.

"SpaceX has moved its state of incorporation from Delaware to Texas! If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible," Musk said on the platform.

The move comes after the billionaire founder and electric vehicle maker Tesla's CEO said earlier this month that he will hold a shareholder vote to move Tesla's state of incorporation to Texas, where it has its headquarters, after a Delaware judge invalidated his $56-billion pay package.

"The public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas," Musk said on X earlier this month.

This follows the holding a poll where 87% respondents voted "yes" for Tesla's change of incorporation.

Musk's brain-chip implant company, Neuralink also changed its location of incorporation from Delaware to Nevada last week.

Elon Musk to make another break with Delaware by moving SpaceX to Texas

Billionaire to shift a second business away from the state where his $56bn Tesla pay package was struck down

George Hammond
Sujeet Indap
Thu Feb 15 2024 - 


Elon Musk is to shift the incorporation of SpaceX from Delaware to Texas, seeking to further limit exposure to the state after a judge there shot down his $56 billion (€52.2 billion) pay package from Tesla last month.

Musk, the world’s richest man, switched the incorporation of his brain-implant company Neuralink from Delaware to Nevada last week. SpaceX is a far larger business – a valuation of almost $200 billion makes it one of the most valuable private companies in the world.

“If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible,” Musk wrote on X (formerly Twitter) on Wednesday.

SpaceX, whose corporate headquarters are in southern California, is the latest of Musk’s half-dozen companies planning to split from Delaware, the small eastern state that has long been the favoured domicile for large corporations thanks in part to a transparent corporate law regime, years of legal precedent and a community of lawyers.

The moves come after a judge in Delaware, Kathaleen McCormick, voided a planned $56 billion pay award from Tesla, the electric-car company he runs, late last month. McCormick ruled that Musk had exerted undue control over the company’s board despite owning a minority of Tesla. He was the “paradigmatic ‘Superstar CEO’”, she wrote in the ruling.

[ Judge strikes down Elon Musk’s $55bn pay package after shareholder challenges it as excessive ]

Following McCormick’s decision, Musk said other founders should incorporate their companies “in Nevada or Texas if you prefer shareholders to decide matters” in a post on X, the social media platform which he also owns. Musk has also pledged to hold a vote for Tesla shareholders on switching the carmaker’s incorporation to Texas, a process that is likely to be more complex given Tesla is a public company.

Texas has recently sought to position itself as a rival to Delaware’s business-friendly reputation. The state passed legislation signed by the governor to create a new Texas business court that will hear corporate disputes with specialised judges. Officials in the state have been actively marketing the new court to companies domiciled elsewhere as sophisticated and efficient even as the details of the body and how it will operate are still being finalised.

Two other Musk companies – X and xAI, the artificial intelligence start-up for which he is seeking to raise billions of dollars – are incorporated in Nevada.

SpaceX’s move was first reported by Bloomberg News. – Copyright The Financial Times Limited 2024

Japan slips into recession, becomes fourth-largest economy behind US, China and now Germany

The government reported the economy shrank at an annual rate of 0.4% in October to December, according to Cabinet Office data on real GDP, though it grew 1.9% for all of 2023

AP Published 15.02.24


Japan's economy is now the world's fourth-largest after it contracted in the last quarter of 2023 and fell behind Germany.

The government reported the economy shrank at an annual rate of 0.4% in October to December, according to Cabinet Office data on real GDP, though it grew 1.9% for all of 2023. It contracted 2.9% in July-September. Two straight quarters of contraction are considered an indicator an economy is in a technical recession.

Japan's economy was the second largest until 2010, when it was overtaken by China's. Japan's nominal GDP totalled USD 4.2 trillion last year, while Germany's was USD 4.4 trillion, or USD 4.5 trillion, depending on the currency conversion.

A weaker Japanese yen was a key factor in the drop to fourth place, since comparisons of nominal GDP are in dollar terms. But Japan's relative weakness also reflects a decline in its population and lagging productivity and competitiveness, economists say.

Real gross domestic product is a measure of the value of a nation's products and services. The annual rate measures what would have happened if the quarterly rate lasted a year.

Japan was historically touted as “an economic miracle,” rising from the ashes of World War II to become the second largest economy after the U.S.. It kept that going through the 1970s and 1980s. But for most of the past 30 years the economy has grown only moderately at times, mainly remaining in the doldrums after the collapse of its financial bubble began in 1990.

Both the Japanese and German economies are powered by strong small and medium-size businesses with solid productivity.

Like Japan in the 1960s-1980s, for most of this century, Germany roared ahead, dominating global markets for high-end products like luxury cars and industrial machinery, selling so much to the rest of the world that half its economy ran on exports.

But its economy, one of the world's worst performing last year, also contracted in the last quarter, by 0.3%.

An island nation with relatively few foreign residents, its population has been shrinking and aging for years, while Germany's has grown to nearly 85 million, as immigration helped to make up for a low birth rate.

The latest data reflect the realities of a weakening Japan and will likely result in Japan's commanding a lesser presence in the world, said Tetsuji Okazaki, professor of economics at the University of Tokyo.

“Several years ago, Japan boasted a powerful auto sector, for instance. But with the advent of electric vehicles, even that advantage is shaken,” he said. Many factors have yet to play out, “But when looking ahead to the next couple of decades, the outlook for Japan is dim.”

The gap between developed countries and emerging nations is shrinking, with India likely to overtake Japan in nominal GDP in a few years.

The U.S. remains the world's largest economy by far, with GDP at USD 27.94 trillion in 2023, while China's was USD 17.5 trillion. India's is about USD 3.7 trillion but growing at a sizzling rate of around 7%.

Immigration is one option for solving Japan's labour shortage problem, but the country has been relatively unaccepting of foreign labour, except for temporary stays, prompting criticism about discrimination and a lack of diversity.

Robotics, another option, are gradually being deployed but not to the extent they can fully make up for the lack of workers.

Another key factor behind Japan's sluggish growth is stagnating wages that have left households reluctant to spend. At the same time, businesses have been invested heavily in faster growing economies overseas instead of in the aging and shrinking home market.

Private consumption fell for three straight quarters last year and “growth is set to remain sluggish this year as the household savings rate has turned negative,” Marcel Thieliant of Capital Economics said in a commentary. "Our forecast is that GDP growth will slow from 1.9% in 2023 to around 0.5% this year."

Japan’s economy drops to fourth largest in world as recession hits

15 February 2024, 09:34

Japanese economy shrinks to world’s fourth largest. Picture: PA

Latest figures show the country’s economy shrank by 0.4% between October and December.

Japan’s economy is now the world’s fourth-largest after it contracted in the last quarter of 2023 and fell behind Germany.

The government reported the economy shrank at an annual rate of 0.4% in October to December, according to cabinet office data on real GDP (dross domestic product) released on Thursday, though it grew 1.9% for all of 2023.

It contracted 2.9% in July-September. Two straight quarters of contraction are considered an indicator an economy is in a technical recession.

Japan’s economy was the second largest until 2010, when it was overtaken by China’s.

Commuters walk over a bridge during a rush hour at Shinagawa station in Tokyo (AP Photo/Eugene Hoshiko)

Japan’s nominal GDP totalled 4.2 trillion US dollars (£3,35 trillion) last year, while Germany’s was 4.4 trillion dollars (£3.51 trillion).

A weaker Japanese yen was a key factor in the drop to fourth place, since comparisons of nominal GDP are in dollar terms.

But Japan’s relative weakness also reflects a decline in its population and lagging productivity and competitiveness, economists say.

Real gross domestic product is a measure of the value of a nation’s products and services.

The annual rate measures what would have happened if the quarterly rate lasted a year.

Japan was historically touted as “an economic miracle,” rising from the ashes of the Second World War to become the second largest economy after the US.

It kept that going through the 1970s and 1980s.

But for most of the past 30 years the economy has grown only moderately at times, mainly remaining in the doldrums after the collapse of its financial bubble began in 1990.

Both the Japanese and German economies are powered by strong small and medium-size businesses with solid productivity.

As an island nation with relatively few foreign residents, Japan’s population has been shrinking and aging for years, while Germany’s has grown to nearly 85 million, as immigration helped to make up for a low birth rate.

The latest data reflect the realities of a weakening Japan and will likely result in Japan’s commanding a lesser presence in the world, said Tetsuji Okazaki, professor of economics at the University of Tokyo.

The US remains the world’s largest economy by far, with GDP at 27.94 trillion dollars (£22.27 trillion) in 2023, while China’s was 17.5 trillion dollars (£13.95 trillion). India’s is about 3.7 trillion dollars (£2.95 trillion) but growing at a sizzling rate of around 7%.

By Press Association

UK enters recession as clouds darken over Sunak

Reuters
15 February 2024

Britain’s economy fell into a recession in the second half of 2023, a tough backdrop for Prime Minister Rishi Sunak who has promised to boost growth ahead of an election expected later this year.

Gross domestic product (GDP) contracted by a worse-than-expected 0.3 per cent in the three months to December, having shrunk by 0.1 per cent between July and September, official data showed.

A poll of economists had pointed to a smaller 0.1 per cent fall in the October-to-December period.

Sterling weakened against the euro and the US dollar. Investors added to their bets on the Bank of England (BoE) cutting interest rates this year and businesses called for more help from the Conservative Government in a budget plan due on March 6.

Alex Veitch, director of policy and insight at the British Chambers of Commerce, said: “Businesses were already under no illusion about the difficulties they face, and this news will no doubt ring alarm bells for government.

“The [UK Chancellor of the Exchequer Jeremy Hunt] must use his budget in just under three weeks’ time to set out a clear pathway for firms and the economy to grow.”

Hunt said there were “signs the British economy is turning a corner” and “we must stick to the plan – cutting taxes on work and business to build a stronger economy”.

Media reports said he was seeking to cut billions of pounds from public-spending plans to fund pre-election tax cuts in his budget, if “penned in” by tight finances.

The Office for National Statistics (ONS) said the economy grew 0.1 per cent across 2023 compared with 2022. The BoE has said it expects output to pick up slightly in 2024 but only to 0.25 per cent growth.

Britain’s economy has been stagnating for almost two years, although recessions in the country have become increasingly rare as the economy grows.

The Covid-19 pandemic triggered the deepest contraction on record over two quarters in early 2020. Before that, the global financial crisis sparked a severe recession that lasted just over a year, from the second quarter of 2008 through to the second quarter of 2009.

Data on February 14 showed inflation held at a lower-than-expected 4.0 per cent in January, reviving talk among investors about a BoE rate cut as soon as June. But strong wage growth reported on February 13 underscored why the BoE remains cautious.

The fall in GDP in the fourth quarter was the steepest since the first three months of 2021 when Britain imposed new Covid restrictions.

Economic output fell by 0.1 per cent in monthly terms in December after 0.2 per cent growth in November, the ONS said. The Reuters poll had pointed to a 0.2 per cent fall in December.

The ONS said the manufacturing, construction and wholesale sectors were the largest contributors to the decrease in GDP over the last three months of last year.

GDP per person dropped in every quarter of 2023 and has not grown since early 2022, representing the longest such run since records began in 1955.

Germany now world’s third-largest economy, as Japan slips into recession

The country now sits behind only the U.S. and China in terms of economic heft.

In October, the IMF projected that Germany's GDP would indeed eclipse that of Japan in 2024 | Maryam Majd/Getty Images

FEBRUARY 15, 202

BY SEB STARCEVIC

Germany is now the world's third-largest economy, after Japan unexpectedly slipped into recession.

Japan's economy shrank by an unexpected 0.4 percent in the last quarter of 2023, according to figures released by the government. The economy declined by 3.3 percent in the previous three months, meaning the country entered a technical recession.

With a GDP of $4.5 trillion, Germany now sits behind the United States and China in terms of economic heft, and narrowly leads Japan, which has a GDP of $4.2 trillion.

Germany's economy shrank by 0.3 percent in 2023, with "rising interest rates and weaker domestic and foreign demand" to blame, according to the Federal Statistics Office.

However, last October, the International Monetary Fund projected that Germany's GDP would indeed eclipse that of Japan in 2024, as the yen's slide against the dollar continues to cause headaches for policymakers in Tokyo.

Though it has long been Europe's largest economy, the last time Germany held the number three spot was in 2007, before it was overtaken by China.

Cisco cuts 4,000 jobs after earnings call

The company will cut five percent of its workforce after a revenue fall of six percent year-on-year

.
Alice Nunwick

February 15, 2024

Cisco has cut 4,000 jobs, equating to five percent of its workforce, after posting its second quarter financial results on Wednesday (14 February).

Although Cisco’s software subscription revenue was up five percent year-on-year, the company’s total software revenue was flat year-on-year and its total revenue, which amounted to $12.8bn, was down six percent year-on-year. Product and service revenues were both down nine percent and four percent respectively.

Cisco CEO Chuck Robbins noted in the earnings call that demand for Cisco’s telco and cable services was on the decline.

However, the company demonstrated continued optimism about its partnership with NVIDIA, particularly in developing AI technology. Robbins stated that Nvidia had already showed an interest in using Cisco’s ethernet in its data centres.

“We continue to align our investments to future growth opportunities,” stated Robbins. “Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organisations,” he added.

Layoffs have continued to plague the tech industry in 2024.

The global tech industry lost around 240,000 jobs in 2023 alone and companies including eBay and TikTok have recently made layoffs, losing over 1,000 employees collectively in January.

Cisco’s CFO Scott Herren stated, in light of the results, that the company would continue to remain focused on creating good financial results.

“Focused execution and operating discipline drove our solid top and bottom-line results and strong margins in Q2,” he stated.

“We are making good progress in our business model shift to more recurring revenue while remaining focused on financial discipline, operating leverage and shareholder returns, as evidenced by our increased dividend,” added Herren.

GOP DISINFORMATION FREEK OUT

Kremlin dismisses US warning about Russian nuclear capability in space

Russia's latest foray into space was a failed lunar landing in August 2023. 

PHOTO: REUTERS

FEB 15, 2024, 

MOSCOW – Russia on Feb 15 dismissed a warning by the United States about its supposed new nuclear capabilities in space, calling it a “malicious fabrication” and a trick by the White House aimed at getting American lawmakers to approve more money to counter Moscow.

The US has told Congress and allies in Europe about new intelligence related to Russian nuclear capabilities that could pose an international threat, a source briefed on the matter told Reuters on Wednesday.

The new capabilities, related to Russian attempts to develop a space-based weapon, do not pose an urgent threat to the US, the source said.

Kremlin spokesman Dmitry Peskov said he would not comment on the substance of the reports until the details were unveiled by the White House. But he said Washington’s warning was clearly an attempt to get Congress to approve more money.

“It is obvious that the White House is trying, by hook or by crook, to encourage Congress to vote on a Bill to allocate money. This is obvious,” he was quoted as saying by TASS.

“We’ll see what tricks the White House will use,” Mr Peskov said.

Russian Deputy Foreign Minister Sergei Ryabkov, Moscow’s point man on arms control, accused the US of “malicious fabrication”.

Russia’s invasion of Ukraine – something Moscow calls a special military operation – has triggered the biggest confrontation between the West and Russia since the 1962 Cuban missile crisis.

Both Moscow and Washington have warned of the risk of a conflict between Nato and Russia.

Russia and the US, by far the biggest nuclear powers, have both expressed regret about the steady disintegration of arms-control treaties that sought to slow the Cold War arms race and reduce the risk of nuclear war.

The US casts China as its biggest competitor and Russia as its biggest nation-state threat, while US President Joe Biden argues that this century will be defined by an existential contest between democracies and autocracies.

Russia says the post-Cold War dominance of the US is crumbling, and that Washington has for years promoted chaos across the planet while ignoring the interests of other powers.

 REUTERS

 

'Malicious fabrication': Russia dismisses US warning on nuclear weapons in space

Russian Deputy Foreign Minister has denied US reports of deploying nuclear weapons in space, calling them a "malicious fabrication."

Russian Deputy Foreign Minister Sergei Ryabkov (Credits: AP)

India Today World Desk

New Delhi,UPDATED: Feb 15, 2024 14:00 IST

Written By: Vani Mehrotra

Russian Deputy Foreign Minister Sergei Ryabkov has called reports about the deployment of Russian nuclear weapons in space a "malicious fabrication" of the United States, Russian state-owned news agency TASS reported on Thursday.

The development comes after the United States told Congress and allies in Europe about new intelligence related to Russian nuclear capabilities that could pose an international threat.

The new capabilities, related to Russian attempts to develop a space-based weapon, do not pose an urgent threat to the United States, a source told news agency Reuters.

Dmitry Peskov, a spokesperson for the Kremlin said he would not comment on the substance of the reports until the details were unveiled by the White House.

He also said Washington's warning was clearly an attempt to get Congress to approve more money.

"It is obvious that the White House is trying, by hook or by crook, to encourage Congress to vote on a bill to allocate money, this is obvious," Kremlin spokesman Dmitry Peskov was quoted as saying by TASS.

"We'll see what tricks the White House will use," Peskov said.

Russia's invasion of Ukraine - something Moscow calls a special military operation - has triggered the biggest confrontation between the West and Russia since the 1962 Cuban Missile Crisis. Both Moscow and Washington have warned of the risk of a conflict between NATO and Russia.

Russia and the United States, by far the biggest nuclear powers, have both expressed regret about the steady disintegration of arms-control treaties which sought to slow the Cold War arms race and reduce the risk of nuclear war.

Inputs from Reuters

US warns of security threat over Russia's nuclear capability in space

The United States has told Congress and allies in Europe about new intelligence related to Russian nuclear capabilities that could pose an international threat, a source briefed on the matter told Reuters on Wednesday.


Issued on: 15/02/2024 - 

01:30

This undated artist rendering courtesy of Planet Labs, Inc., shows the company's Pelican satellite. © AFP

By: FRANCE 24

Video by: Fraser JACKSON

The new capabilities, related to Russian attempts to develop a space-based weapon, do not pose an urgent threat to the United States, the source said.

The intelligence came to light after Representative Mike Turner, Republican chair of the US House of Representatives Intelligence Committee, issued an unusual and cryptic statement on Wednesday warning of a "serious national security threat".

Sources later said the warning was related to Russian capabilities in space, related to satellites. One of the sources said the issue is serious, but is not related to an active capability nor should it be a cause for panic.

"I am requesting that President Biden declassify all information relating to this threat so that Congress, the Administration, and our allies can openly discuss the actions necessary to respond to this threat," Turner said in the statement, providing no further information.

Kremlin spokesman Dmitry Peskov on Thursday called the warning about new Russian nuclear capabilities in space yet another "trick" by the White House. Russian deputy foreign minister Sergei Ryabkov called reports about the deployment of nuclear weapons in space a "malicious fabrication", TASS reported.
Foreign aid debate

Citing a current and a former US official, the New York Times reported earlier that the new intelligence was related to Russia’s attempts to develop a space-based anti-satellite nuclear weapon. ABC News reported earlier that the intelligence had to do with such a capability.

Current and former officials said the nuclear weapon was not in orbit.

Turner's statement was released in the midst of debate in Congress over how the United States should be dealing with global threats from Russia and other rivals, with security hawks urging greater global involvement and some lawmakers most closely allied with Republican former president Donald Trump advocating for a more isolationist approach to world affairs.

Turner recently returned from leading a bipartisan congressional delegation to Ukraine, after which he warned fellow lawmakers that time was running out for Ukraine in its fight against Russian invaders.

The Biden administration has been ramping up its criticism of House Republicans for possibly blocking a $95 billion bill passed by the Senate that would supply aid to Ukraine, Israel and Taiwan. Supporters of the bill argue that a major reason for the United States to back the government in Kyiv is to push back against threats from Russia that extend beyond Ukraine.

House Speaker Mike Johnson, a staunch Trump ally who says he will not rush to allow a vote on the Senate bill, told reporters at the Capitol there was no need for public alarm. "Steady hands are at the wheel. We're working on it and there's no need for alarm," he said.

Senators Mark Warner and Marco Rubio, the Democratic chair and Republican vice chair, respectively, of the Senate Intelligence Committee, issued a joint statement saying their panel has the intelligence in question and has been "rigorously" tracking the issue.

A source familiar with the matter said Warner and Rubio had been briefed on the threat weeks ago. The source said the issue was not unrelated to the security spending bill, but there is no direct tie between them.

Representative Jim Himes, the top Democrat on the House intelligence panel, said the issue in Turner's statement is significant, "but it is not a cause for panic".

US national security adviser Jake Sullivan declined to provide specifics. He said he had arranged a briefing for Thursday with congressional leaders with administration intelligence and defence professionals, and that he was surprised by Turner's decision to issue the statement.

"I'm not in a position to say anything further today," Sullivan told a briefing. "Like I said, I look forward to the discussion with (Turner) and obviously from there we will determine how to proceed, but standing here at the podium today I can't share anything further."

(FRANCE 24 with Reuters)

US lawmakers were just briefed on intel that Russia is trying to put a nuclear weapon in space: reports

Matthew Loh
Feb 15, 2024, 

This pool photograph distributed by Russian state-owned agency Sputnik shows Russia's President Vladimir Putin talking with young scientists during a visit to the Rocket and Space Corporation (RSC) Energia in Korolyov, outside Moscow, on October 26, 2023.

GRIGORY SYSOYEV/POOL/AFP via Getty 


US lawmakers were given intel on a new nuclear space weapon Russia is building, multiple outlets reported.

An urgent statement by Rep. Mike Turner about the intel drew high interest in Capitol HIll, CNN reported.

But some later felt underwhelmed by the news, per CNN, while others said there's no cause for panic.


US leaders in Congress were briefed on Wednesday about new intelligence that Moscow is making progress on a nuclear weapon in space that can attack satellites, multiple media outlets reported.

The weapon wouldn't involve launching a nuclear warhead toward the Earth from space but likely is intended to disable communications networks in orbit, ABC News first reported, citing two unnamed sources.

The New York Times and CNN also reported on the intelligence, citing unnamed officials briefed on the matter.

One source told ABC that the new development is a "big deal" and "very concerning and sensitive."

Attention was heaped on the briefing after House Intelligence Committee Chairman Mike Turner released a statement telling lawmakers to gather and hear information on a "serious national security threat."

"I am requesting that President Biden declassify all information relating to this threat so that Congress, the Administration, and our allies can openly discuss the actions necessary to respond to this threat," Turner's statement said.

CNN described House representatives "tramping down to the House basement to learn what the intelligence was."

But several of them were "underwhelmed" after receiving the information, the outlet reported.

The Times reported that the intelligence indicated Russia is not close to deploying the weapon, and that it was not deemed an urgent threat. But the US also doesn't have the capabilities to counter such a weapon, an unnamed former official told the outlet.

Meanwhile, unnamed officials told CNN that the weapon is not in orbit and that it's unclear how far Russia has progressed in development.
No cause for panic, lawmakers say

Amid the clamor, House Speaker Mike Johnson sought to allay public concerns about the briefing.

"I saw Chairman Turner's statement on the issue, and I want to assure the American people, there is no need for public alarm," Johnson told reporters at Capitol Hill. "We are going to work together to address this matter, as we do all sensitive matters that are classified."

Johnson added that "steady hands are at the wheel," and lawmakers were "working on it."

While the representative indicated he knew beforehand about the intelligence — saying he asked last month to meet with President Joe Biden about a "serious national security that is classified" — he did not mention any nuclear weapon.

A meeting on the security issue is scheduled for Thursday, Johnson added.

Rep. Jim Himes of Connecticut, a Democratic lawmaker on the intelligence committee, also urged calm, per The Hill.

Himes added that the security threat was "a serious issue that Mike is right to focus on" but that "it's not going to ruin your Thursday."

In a regular press briefing on Wednesday, National Security Adviser Jake Sullivan declined to share details about the "national security threat" but acknowledged that Biden officials are meeting to discuss it with lawmakers.

That meeting was set before Turner made his urgent statement, Sullivan added.

"So, I am a bit surprised that Congressman Turner came out publicly today in advance of a meeting on the books for me to go sit with him alongside our intelligence and defense professionals tomorrow.," Sullivan said. "That's his choice to do that."

When pressed by reporters on the security threat, Sullivan said he personally reached out to the Gang of Eight to set up the meeting and that it was "highly unusual" for a national security advisor to do so.

In April 2023, a report by the Center for Strategic & International Studies highlighted that Russia is likely developing weapons that can temporarily or permanently turn off satellites.

Moscow has not deployed these in its war on Ukraine, which has largely been relying on Starlink satellites, the report said.

It's not immediately clear if the Russian space weapon in question is nuclear-powered or uses nuclear arms.

The Outer Space Treaty of 1967, which Russia still participates in, bans the stationing of weapons of mass destruction in outer space. However, Moscow has been pulling out of other nuclear weapon treaties in recent years, raising fears that the world could enter another Cold War-like environment.

Warning of new ice age in Europe as currents in the Atlantic approach a catastrophic tipping point

Currents in the Atlantic are approaching a tipping point that if reached will have devastating consequences for the whole world.

 bne IntelliNews
By Ben Aris in Berlin 

February 14, 2024


The currents that circulate in the Atlantic are approaching a “tipping point” that will change the way water flows around the oceans of the world and could cause a return to ice age conditions in Europe, according to a new study released last week.

The currents of water, known as the AMOC, or Atlantic Meridional Overturning Circulation, determine the world’s weather patterns by moving huge volumes of warm or cold water around the globe that in turn drives the wind and rainfall.

If these currents change course, then monsoons could be permanently displaced, turning previously lush regions like the Amazon arid and bringing Russian-like winters to Europe. Changing the AMOC patterns will have far-reaching consequences and would probably cause a cascade of other environmental disasters, says the experts.

The AMOC has remained stable for thousands of years, but now the tell-tale appearance of a very warm concentration of water off the east coast of the US together with a “cold blob” in the sea to the south of Greenland, visible in the image, are ringing alarm bells.



The currents of the AMOC determine the whole world's weather

The way it works is warm salty sea water flows north where it meets fresh snow and ice-melt water. The heavier salt water sinks to the ocean floor creating a seabed current of cold water that flows south again.

“The AMOC has a tipping point beyond which it breaks down if the northern Atlantic Ocean is diluted with freshwater (by increasing rainfall, river runoff and meltwater), thus reducing its salinity and density. This has been suggested by simple conceptual models since Stommel in 1961,” Professor Stefan Rahmstorf at the Potsdam-Institute for Climate Science said in a blog.

With last year’s sea temperatures at highs not seen for thousands of years, this pattern is approaching a tipping point where the directions of the currents may change and once they have passed this tipping point the changes can’t be undone, even if the sea cools to its long-term average temperatures again.

The last AMOC breakdown occurred about 12,000 years ago and triggered the Younger Dryas cold event around the northern Atlantic, a rapid return to ice age conditions in parts of the Northern Hemisphere.

The new study provides much more detailed and higher resolution simulations of the impacts of an AMOC collapse on climate than in the past, albeit considered in isolation and not combined with the effects of CO2-induced global warming.

They show how particularly northern Europe from Britain to Scandinavia would suffer devastating impacts, such as a cooling of winter temperatures by between 10 °C and 30 °C occurring within a century, leading to a completely different climate within a decade or two. London’s climate could become that of Stockholm and Stockholm that of Siberia. In addition, they show major shifts in tropical rainfall belts that will radically change the biosphere of large swathes of major land masses in Africa, Asia and Latin America.

“These (and many more) impacts of an AMOC collapse have been known for a long time but thus far have not been shown in a climate model of such high quality," Rahmstorf said.

The idea of an AMOC tipping point has been around for a long time, but the research demonstrated for the first time in a state-of-the-art global coupled climate model that not only is it possible, but it has a 95% certainty of happening before the end of the century, according to another study by Peter Ditlevsen published in Nature last year.

“A forthcoming collapse of the Atlantic meridional overturning circulation (AMOC) is a major concern as it is one of the most important tipping elements in Earth’s climate system,” Ditlevsen said.

Van Western would not be drawn on predicting a more precise date for the tipping point as there are still too many variables and unknowns, but he and his colleagues were sufficiently alarmed to conclude their paper with strident calls for the global Climate Crisis to be addressed and the Paris Accord targets met.

The AMOC flows themselves have only been recorded in detail since 2004, but in that time noticeable changes in the flow of the currents is already very clear in what scientists say is a very worrying sign.

“The billion-dollar question is: how far away is this tipping point? Three recent studies, using different data and methods, have argued that we are approaching the tipping point and that it might be too close for comfort, even posing a risk of crossing it in the next decades,” said Rahmstorf.

UK government to pay TikTok stars to tell Albanians to stay away
Albania has a high level of emigration as Albanians seek better opportunities in the UK and other West European countries. / bne IntelliNews

By bne IntelliNews February 15, 2024


The UK government is revealed to be planning to pay TikTok influencers to dissuade migrants from crossing the Channel, with a particular focus on Albania and other countries known for contributing to illegal migration to the UK.

The initiative, revealed by The Times, aims to target migrants in conflict-free countries, particularly young working-age men and their families, encouraging them to consider the risks associated with illegal migration to the UK.

There are plans to offer substantial sums of money to social media influencers in regions with high levels of illegal migration, aiming to dissuade potential migrants from undertaking perilous journeys via small boats. The influencers will also be tasked with highlighting the risks of deportation to Rwanda, according to the report.

The scheme would circumvent a ban on direct government advertising on TikTok, which was implemented last year due to security fears.

According to The Times, the campaign is budgeted at £1mn (€1.2mn) in total. It will include mass campaigns in countries such as Albania, Iraq, Egypt and Vietnam, with potential expansion to Turkey and India.

A significant portion of the budget, approximately £380,500, would be allocated to an extensive advertising campaign in Albania.

Additional funds of £15,000 are earmarked for influencers in Egypt and Vietnam. Allocations for Turkish, Iraqi, and Indian influencers are yet to be determined, although there is a total budget of £576,500 for these regions.

Multicultural Marketing Consultancy (MMC) has reportedly been contracted by the Home Office to identify suitable candidates.

According to the report, in Albania influencers like rapper Omg Dioh and comedian Roxhi Dibrani have been identified as key figures. Dioh, with 100,000 followers, and Dibrani, with an audience of 150,000, would be paid to leverage their influence to dissuade potential migrants.

However, some influencers have already said they have no intention of participating.

Fabio Daja, an Albanian TikToker with a significant following, denied any involvement in the campaign when contacted by i. "I find it a very sensitive issue when it comes to refugees trying to cross the border," he said.

Similarly, travel blogger Ben Washburn, another figure mentioned in the report, told i he had not been approached by the British government and was not interested in participating.

Albania and the UK have been working together to reduce the number of Albanian citizens illegally entering the UK.

A joint communiqué on the issue was signed by the prime ministers of the two countries in December 2022. Five months later, more than 1,000 Albanian nationals had been repatriated.

In May 2023, the two countries reached an agreement resulting in the transfer of hundreds of Albanian prisoners back to their home country. In exchange, the UK is providing support to modernise the Albanian prison system.

Despite the agreements, migration has been a contentious issue between London and Tirana. Albanian Prime Minister Edi Rama has strongly criticised the British government for scapegoating Albanians for what he said were political purposes.