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McDonald’s, Starbucks, Coke and Pepsi all halt sales in Russia

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McDonald’s, PepsiCo, Coca-Cola and Starbucks stopped sales of their best-known products in Russia on Tuesday, offering a united rebuke of the war on Ukraine by companies that define America for much of the world.

Pepsi and McDonald’s were corporate pioneers whose work with the Soviet Union and the post-Soviet Russian state decades ago were seen as improving international relations.

All four companies have major operations in Russia.

McDonald’s said it would go on paying salaries to its 62,000 employees in Russia as it closed 847 restaurants. The first location to open in Russia, in central Moscow’s Pushkin Square in 1990, became a symbol of flourishing American capitalism as the Soviet Union fell.

“I’m glad they came around and made the right decision,” Jeffrey Sonnenfeld, a professor at the Yale School of Management who is tracking major companies’ stances on Russia, said after the move by McDonald’s. “It’s a really important impact, and it’s symbolic as much as it is substantive.”

Starbucks Corp is temporarily closing hundreds of stores. PepsiCo Inc will suspend all advertising in Russia and stop the sale of its drinks brands, while continuing to sell essentials such as milk and baby food. Rival Coca-Cola Co said it will suspend its business there.

Coca-Cola was the official drink of the 1980 Olympic Games in Moscow, despite the United States boycotting the event in protest of the Soviet invasion of Afghanistan.

Scores of other companies also have rebuked Russia, and Amazon.com Inc said on Tuesday it would stop accepting new customers for its cloud services in Russia and Ukraine. Universal Music suspended all operations in Russia, and online dating service Bumble Inc will remove its apps from stores in Russia and Belarus.

Earlier, Royal Dutch Shell Plc stopped buying oil from Russia and said it would cut links to the country entirely while the United States stepped up its campaign to punish Moscow by banning Russian oil and energy imports.

Moscow has termed the attack a “special military operation” aimed not at occupying territory but at destroying Ukraine’s military capabilities.

The West’s moves to isolate Russia economically for attacking its neighbour have hit hard global commodity and energy markets, sending prices soaring and threatening to derail the nascent recovery from the COVID-19 pandemic.

Britain too said it would ban imports of Russian oil but only by gradually phasing them out during 2022 to give businesses time to find alternative sources of supply.

The London Metal Exchange (LME) halted trade in nickel on Tuesday after prices of the metal, a key component in electric vehicle batteries, doubled to more than $100,000 a tonne.

Shell’s decision to abandon Russia comes days after it faced a barrage of criticism for buying Russian oil – a transaction that two weeks ago would have been routine.

“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one, and we are sorry,” Chief Executive Ben van Beurden said.

Shell and rivals BP Plc and Exxon Mobil Corp have all announced plans to sell holdings in Russia and exit the country, leaving France’s TotalEnergies relatively isolated in hanging on to its investments there.

HYBRID DELAYS

Mining group BHP warned the surge in commodity prices could spill over into already-skyrocketing inflation and potentially affect global growth.

Nickel prices soared when China’s Tsingshan Holding Group, one of the world’s top nickel and stainless steel producers, bought large amounts of nickel to reduce its bets that prices would fall, three sources familiar with the matter said.

Tsingshan and the LME declined to comment.

As well as high-grade nickel, the price of other metals used in car production, from aluminium in bodywork to palladium in catalytic converters, has soared, and industry supply chains have been broken.

Volkswagen AG said it would stop taking orders for numerous plug-in hybrid models from Wednesday, as supply-chain troubles exacerbated the production delays caused by chip shortages.

The carmaker had already halted production in Russia and has also suspended production at several factories in Germany as it has struggled to obtain components.

Orders for the plug-in hybrid versions of Volkswagen’s Golf, Tiguan, Passat, Arteon and Touareg models would be halted until further notice and delivery of already-placed orders might not happen this year, the company said.

(Reporting by Yadarisa Shabong, Ahmad Ghaddar, Uday Sampath Kumar, Eric Onstad, Jan Schwar, Jessica DiNapoli and Victoria WalderseeWriting by Paul Sandle, David Clarke, Anna Driver and Peter HendersonEditing by Nick Zieminski and Matthew Lewis)

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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