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Puma sales hit from China backlash and freight delays

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By Emma Thomasson

BERLIN (Reuters) -German sportswear company Puma expects a consumer backlash against Western brands in China and congestion at ports to hit its sales though it gave an upbeat outlook for 2021 following a strong first quarter.

Brands including Puma and rivals Nike and Adidas faced online attacks in China last month over statements about their sourcing of cotton from Xinjiang after reports of human rights abuses against Uyghur Muslims.

“We can still see that trend is continuing. There is less activity in the Western brand stores than there would have been if tension wasn’t there,” Puma Chief Executive Bjorn Gulden told reporters.

Before the backlash, Puma’s sales in greater China had been growing strongly, rising 40% in the first quarter.

Western governments and rights groups have accused authorities in the western region of Xinjiang of detaining and torturing Uyghurs in camps. Beijing denies the accusations.

Puma has previously said it has no direct or indirect business relationship with any manufacturer in Xinjiang.

Overall, Puma reported a 26% rise in first-quarter sales to 1.549 billion euros ($1.9 billion) after adjustments for currency fluctuations, while net profit jumped to 109 million euros, both beating average analyst estimates.

Puma’s shares, up two-thirds in the last year, were down 2.9% at 0940 GMT.

It expects full-year sales to increase by a “mid-teens” percentage and significantly better profitability than last year.

Puma is benefiting from people doing more sport as they try to lose weight after coronavirus lockdowns, a trend it hopes will get another boost after the Tokyo Olympics and the European soccer championships, Gulden said.

However, Puma faces problems getting products made in Asia to key markets due to container shortages and port congestion, especially in North America, following COVID-19 outbreaks among dockworkers and safety restrictions.

While the situation has improved somewhat in the last month or so, Gulden said Puma was still seeing delays of two to three weeks on many shipments, while the cost of freight had doubled and prices were locked in for the next 12 months.

Nike last month reported quarterly sales below estimates due to shipping issues and the pandemic-related slump at stores, forecasting “low-to-mid-teens” full-year revenue growth.

Puma said the pandemic would continue to weigh on its business throughout 2021 with about 30% of stores selling its products in Europe and Latin America still closed and new restrictions expected in India, Canada and Turkey.

($1 = 0.8284 euros)

(Reporting by Emma Thomasson; Editing by Maria Sheahan, Louise Heavens and David Clarke)

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Colonial Pipeline hackers stole data on Thursday

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The hackers who caused Colonial Pipeline to shut down on Friday began their cyberattack against the top U.S. fuel pipeline operator a day earlier and stole a large amount of data, Bloomberg News reported citing people familiar with the matter.

The attackers are part of a cybercrime group called DarkSide and took nearly 100 gigabytes of data out of Colonial’s network in just two hours on Thursday, Bloomberg reported late Saturday, citing two people involved in the company’s investigation.

Colonial did not immediately reply to an email from Reuters seeking comment outside usual U.S. business hours.

Colonial Pipeline shut its entire network, the source of nearly half of the U.S. East Coast’s fuel supply, after a cyber attack that involved ransomware.

 

(Reporting by Aakriti Bhalla in Bengaluru; Editing by Himani Sarkar)

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TC Energy posts C$1 billion quarterly loss on Keystone XL suspension

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By Nia Williams and Shariq Khan

CALGARY, Alberta (Reuters) -TC Energy Corp swung to a loss in the first quarter, hit by C$2.2 billion ($1.81 billion) impairment charges related to the suspension of its Keystone XL project, the Canadian pipeline operator said on Friday.

The KXL pipeline was planned to carry 830,000 barrels per day of heavy crude across the border from Alberta to Nebraska, but U.S. President Joe Biden revoked a key permit for the project on his first day in office.

TC Energy said the impairment charge was related to halting work on KXL and a reassessment of related projects like the Heartland Pipeline.

“We were very disappointed with the decision in January to revoke the presidential permit,” Chief Executive Francois Poirier said on an earnings call, adding the company was “opportunity-rich” in other parts of its business.

Calgary-based TC Energy owns the largest network of natural gas pipelines in North America as well as the existing Keystone oil pipeline and power and storage assets.

The company posted a C$2.51 billion loss from its oil pipelines, of which Keystone is the biggest contributor, compared with a C$411 million profit in the same period last year.

It reported net loss attributable to shareholders of C$1.1 billion, or C$1.11 per share, in the three months ended March 31 compared with a profit of C$1.1 billion a year earlier.

Excluding items, the company earned C$1.16 per share, slightly better than analysts’ average estimate of C$1.10, according to Refinitiv IBES data.

TC Energy shares closed up 0.2% on the Toronto Stock Exchange at C$61.94.

($1 = 1.2176 Canadian dollars)

(Reporting by Shariq Khan in Bengaluru and Nia Williams in Calgary; Editing by Arun Koyyur and Marguerita Choy)

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Lion Electric says it will build new plant in Illinois, create 750 jobs

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By Tina Bellon

(Reuters) – Canadian electric vehicle company Lion Electric on Friday said it had selected Illinois as the location for its new U.S. manufacturing plant, promising to invest at least $70 million and create about 750 jobs over the next three years.

Lion, known for its electric yellow school buses, said it will build the 900,000 square foot facility in Joliet near Chicago to produce 20,000 electric buses and medium and heavy-duty trucks per year.

The company said it expected the facility to come online in the second half of 2022. Lion Chief Executive Marc Bedard said in an interview that while the Illinois factory would focus on vehicle manufacturing initially, the company might later add battery production. Lion is building a battery production facility in Canada.

Bedard said Lion is expanding in the United States when there is growing demand among school districts and companies to switch to electric transportation. Nearly 400 of the company’s electric school buses are on the road and Amazon.com Inc has said it will buy up to 2,500 trucks from Lion by 2025.

Lion’s expansion also coincides with a favorable regulatory environment under U.S. President Joe Biden, who has pushed for providing generous subsidies to the EV industry.

“We’re looking for regulatory tailwinds that will be favorable to electric,” Bedard said of his decision to build the factory in Illinois. State-funded tax credits for the plant were being negotiated, Lion said.

Lion on Friday also is expected to start trading publicly on the New York and Toronto stock exchanges following a merger with special purpose acquisition company Northern Genesis Acquisition Corp in November.

The deal was valued at $1.9 billion and Lion received nearly $500 million in net cash proceeds, the majority of which it said it plans to invest in battery technology and the new U.S. plant.

 

(This story corrects to show that investment and job creation is over a three year, not two year period in first paragraph)

 

(Reporting by Tina Bellon in Austin, Texas; editing by Grant McCool)

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