Tuesday, September 04 08:24:58
There were further signs yesterday that the domestic economy is picking up. A closely watched indicator showed the manufacturing sector expanded for the sixth straight month, other data showed industrial production rose again in July and Ulster Bank upgraded its economic forecasts for this year because exports are booming. The bank now expects gross domestic product to expand by 0.5pc this year, which is more than double the rate forecast in the bank's last quarterly report. GDP is seen rising 1.5pc next year. The forecast was bolstered after better-than-expected exports and recent revisions to last year's growth figures by the Central Statistics Office which suggest that things are not as bad as the agency initially calculated.
"Domestic demand is still contracting but an end to the slump may be coming into view," economists Simon Barry and John Fahey said in their report. Their upgrades came on the same day that the Central Statistics Office reported industrial production advancing 1.2pc in July from the previous month. Production was 6.4pc higher when compared with the previous July. Industrial production for the three-month period from May to July 2012 was 4.4pc higher than the preceding three months, the CSO added. Most of the improvement in industrial production came from the so-called modern sector, which has seen production jump 7.2pc since the beginning of the year. Production in the indigenous sector -- which is mostly Irish-owned -- was 1.9pc higher in the year, helped by the strengthening of sterling versus the euro. The Irish Independent
Tropical fruit supplier Fyffes has warned of further rises in fruit prices, as the company posted better-than-expected results for the first six months of the year, prompting an upgrade to its full-year guidance. Fyffes increased its full-year target Ebitda (earnings before interest, tax and amortisation) estimate to between E28 million and E33 million. This is up from E25 million to E30 million previously, as the company reported a sharp increase in revenue and profits.
The 11 per cent rise in earning guidance in the six months to the end of June gave a strong boost to its share price, with Fyffes closing up almost 6.5 per cent higher at E0.50. Revenue was up 20 per cent on the year, reaching E550 million for the period, aided somewhat by favourable exchange rates on translation of sales in the group's sterling and dollar denominated operations. Adjusted Ebitda was 36 per cent higher at E28.1 million, while pretax profits grew by 30 per cent to E22.4 million.
The strong performance reflected organic growth across all Fyffes's product categories, the company said, despite the impact of adverse currency movements and higher fuel costs. The Dundalk-headquartered business imports and sells melon, pineapples and bananas to markets across the world. The company's melon business continued to perform well, Fyffes said yesterday, being boosted by the expansion of operations in Guatemala and the opening of a sales office on the west coast of the US. Its banana business achieved a E3.9 million increase in operating profit year on year, while the company's pineapple operations benefited from an 8 per cent increase in volume and from lower shipping costs.
Commenting on its current trading position, Fyffes said it "continues to pursue necessary increases in selling prices in all markets to offset the impact of adverse exchange rate movements and the higher cost of fuel and fruit". The Irish Times
US bond guru Michael Hasenstab is now the biggest single private investor in Irish government bonds after raising his massive bet on an Irish recovery to E6bn. Mr Hasenstab is a top money manager with US investment house Franklin Templeton, which manages $158bn (E125bn) of American pension and savings funds. In February, the Irish Independent reported the E750m profit made by Mr Hasenstab on his punt on the Irish bonds, which at the time stood at E4bn.
Mr Hasenstab and his investors made the huge profit in a matter of months after buying the Irish bonds in the secondary markets at bargain basement prices at the height of the debt crisis. Franklin Templeton has now raised its investment in Irish government debt to E6.1bn, up nearly 50pc in little more than six months, according to a report in the 'Financial Times'. It makes the US investment house the biggest lender to Ireland after the IMF and the eurozone rescue funds.
Unlike those "official" lenders, the funds managed by Mr Hasenstab chose to lend to the country, and with no strings attached other than price. The massive E6bn investment in Irish bonds is a vote of confidence in Ireland. The stake now includes bonds bought when the National Treasury Management Agency (NTMA) issued debt for the first time in two years in July. Mr Hasenstab paid full price for those bonds, unlike the big discounts seen in the second half of 2011. The Irish Independent
Dublin hotel room prices rose by 3pc in the first half of 2012 driven on by major events and a resurgent conference market, according to the latest Hotels.com Hotel Price Index (HPI), which shows the capital's hotel market pulling away from the rest of the country. According to the survey, the average Irish hotel room price stood at E81 in the first half of 2012, the exact same as last year.
The figure makes Irish hotels the cheapest in Europe aside from Portugal and Malta and cheaper even than Greece -- which saw its hotel prices increase from E81 to E89 over the same period. Hotels.com says the continued stabilisation of the Irish hotel sector in general -- but the rise of the capital's fortunes in particular -- comes on the back of increasing events and conference business. Advance bookings for festivals and concerts have also played a role.
At E79 per room, Dublin is not only cheaper than the national average but also the best value western European capital -- sharing the bottom of the HPI table with Athens and Lisbon. Kilkenny, where the average room price is E96 -- even after an 8pc drop in rates -- was the most expensive hotel destination in Ireland while the cheapest was Limerick where the average room price stood at just E64.
Globally hotel prices rose by 4pc which means that Ireland is slightly trailing the rest of the world. Last year Ireland's hotel industry managed a 4pc rise across the board helped along by two major state visits. The Irish Independent