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| Here's your daily business briefing. - 💰 Saudi Aramco raises dividend to $100B
- 🔍 Deep Dive: Pfizer's cancer drugs pivot post-COVID
- 🍇 Aussie farmers cut vines amid wine glut
Thanks for reading! Shriram
p/Shriram | |
| 1 | | In 2023, Saudi Aramco raised its dividend to nearly $100B, even as annual profit declined to $121B from $161B in 2022. The total 2023 dividend, with a 30% YoY increase to $97.8B, was boosted by additional performance-linked payments introduced in May, contributing to a 1.6% rise in Aramco's shares in Sunday trading on the local Tadawul exchange. More: - The Saudi government, holding an 82% stake in Aramco and managing an additional 16% through the sovereign wealth fund, heavily depends on dividends as a key revenue source.
- Mohammed bin Salman, the crown prince, wants to modernize and diversify the Saudi economy with the money made from oil.
- Even though Aramco is working to move away from fossil fuels, by 2027, it wants to increase production capacity from 12 million barrels per day to 13 million.
- In January, Aramco halted its growth plan to give itself more leeway over capital expenditure and concentrate on growing its petrochemicals and domestic gas production.
- In addition to looking at LNG projects and lithium extraction from oil project brines, the company wants to raise gas output by more than 60% by 2030.
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What the numbers say: Pfizer's oncology division, fueled by the Seagen acquisition, strives to boost the percentage of biologic drugs in its pipeline from 6% to 65% by 2030. With the acquisition of Seagen, Pfizer anticipates the development of at least eight blockbuster medicines in its oncology pipeline by 2030, marking a strategic shift toward biologics for long-term revenue growth. Relevance: Pfizer's move to cancer drugs, prompted by a decline in its COVID-related business, seeks to reassure investors amid a share price drop. The Seagen acquisition significantly expands Pfizer's oncology pipeline, offering growth opportunities amid competition and aligning with a strategic focus on biologics for long-term success. More data: Pfizer ($PFE), with a 40% share decline in 2023, targets revenue growth by 2030 by focusing on specific cancers like breast and genitourinary. Despite challenges, Pfizer is optimistic about oncology and diversification into vaccines, metabolic, and inflammatory conditions. | | | |
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| 3 | | Australian farmers are removing millions of vines due to overproduction, endangering the incomes of growers and winemakers. Declining global wine consumption, especially for lower-priced red wines, has significantly impacted Australia, worsened by decreased demand in China, leading to a surplus of over 2 billion liters of wine in storage by mid-2023, resulting in price declines. More: - Grape prices in areas such as Griffith fell to A$304 ($198) per tonne in 2023 from A$659 ($435.58) in 2020, according to data released by industry association Wine Australia.
- In Griffith, up to 25% of the vines must be taken down to stabilize the market and raise prices.
- Worldwide wine consumption is dropping due to health concerns and a desire for more expensive wines.
- Australia's oversupply issue persists despite the expected resumption of imports to China, with two-thirds of wine exports priced under A$10 per liter.
- Many growers are shifting away from traditional grape farming practices, opting for alternative crops like citrus and nuts.
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| 4 | | Restaurants are embracing dynamic pricing, akin to industries like airlines and ride-hailing, flexibly adjusting menu prices based on demand and sales trends. Adopting variable pricing technology helps restaurants cope with rising costs, allowing them to tweak prices weekly or monthly, ranging from a few cents to several dollars, depending on demand. More: - Variable pricing for Cali BBQ's pulled pork sandwich resulted in a $1,500 increase in monthly delivery sales, translating into a $30,000 increase in monthly sales.
- After revealing intentions to test surge pricing, Wendy's encountered criticism; as a result, the business decided to concentrate on providing discounts during slower hours.
- Businesses that offer dynamic pricing, such as Juicer, can see average price fluctuations of up to 15% in response to demand patterns.
- Some eateries, such as Bartaco, Gene, and Georgetti, have effectively used dynamic pricing to boost sales and offset growing expenses.
- Younger consumers tend to favor variable pricing, but some individuals may object to surge pricing, expressing a preference for discounts during off-peak hours.
Zoom Out: - According to Labor Department data, prices for meals consumed outside the home in January were 30% higher than in the same month in 2019.
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| 5 | | Prada's ($PRDSY) market value soared by around $2.70B after outperforming annual profit and sales expectations. The surge in its Hong Kong-listed shares, up nearly 15% to HK$63.90, resulted in a market value of almost HK$163.51B ($20.91B), driven by a 17% increase in 2023 revenue and a 44% rise in net profit compared to 2022. More: - Retail sales, which comprise most of Prada's revenue, grew by 17%, with the Asia-Pacific area seeing a 24% spike and Japan reporting a 44% jump.
- An increasingly affluent clientele is helping other European luxury goods companies such as Hermes, Richemont, and Brunello Cucinelli, all witnessing positive developments.
- Conversely, Hugo Boss was let down by releasing lower-than-expected estimates for 2024, while several brands, including Burberry and Salvatore Ferragamo, reported mediocre performance.
- The primary reason for Prada's impressive performance is the rebound in Chinese traveler expenditure to both domestic and neighboring Asian destinations.
- According to Prada CEO Andrea Guerra, the company's top goal for 2024 is to significantly elevate retail excellence and brand attractiveness.
Zoom Out: - Prada plans to invest $1.09B over five years in a retail push, responding to rising global demand and a shift among luxury consumers towards "experiential shopping," according to Chairman Patrizio Bertelli.
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| 6 | | Ōura, a health technology company specializing in wearables, has launched its products on Amazon following an earlier collaboration with Best Buy, including the Ōura Ring Horizon, Ōura Ring Heritage, and the Ōura Ring Sizing Kit. Customers buying the sizing kit on Amazon receive a $10 credit toward purchasing a Ōura Ring, which monitors sleep cycles, temperature trends, and heart rate variability. More: - Rivals in the wearable health tech sector, such as Google, Apple, Garmin, and Samsung (gearing up for competition with the imminent launch of the Galaxy Ring).
- Previously, Ōura has forged alliances with companies like Gucci and Therabody, broadening its market penetration beyond conventional retail avenues.
- Amazon's prior attempt to enter the health tech space with the Halo tracker was abandoned in 2023 as a result of business reorganization and competition.
- Ōura's shift to Amazon aligns with a broader trend, as health tech firms like Peloton entered Amazon's marketplace in 2022, and Tonal collaborated with Nordstrom in 2021 for a demo concept in 40 stores.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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