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Regulators probe engine blow-outs as older Boeing 777s suspended – Reuters

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(Reuters) – Showers of jet engine parts over residential areas on both sides of the Atlantic have caught regulators’ attention and prompted the suspension of some older Boeing planes from service.

The Saturday incidents involving a United Airlines 777 in Denver and a Longtail Aviation 747 cargo plane in the Netherlands have put engine maker Pratt & Whitney in the spotlight – although there is as yet no indication that their causes are related.

Raytheon-owned Pratt & Whitney said it was coordinating with regulators to review inspection protocols.

Following the Colorado engine failure, when United Flight 328 dropped debris on a northern Denver suburb before landing safely, Boeing recommended the suspension of 777s with the same PW4000 turbine, and Japan made it mandatory.

The European Union Aviation Safety Agency (EASA) weighed in on Monday, requesting more information on the Pratt engines in light of both events. A woman sustained minor injuries in the Dutch incident, which scattered turbine blades on the town of Meerssen. One was found embedded in a car roof.

The U.S. Federal Aviation Administration (FAA) said it would soon issue an emergency airworthiness directive.

Both incidents involve the PW4000 engine type that equips a relatively small number of older planes, some grounded by the pandemic, limiting the likely repercussions.

They nonetheless bring a new headache for Boeing as it recovers from the much more serious 737-MAX crisis, which saw its flagship narrowbody jet grounded after two deadly crashes.

“This is certainly an unwelcome situation for both Boeing and Pratt, but from time to time issues will pop up with aircraft and engines,” said Greg Waldron, a managing editor at industry publication Flight Global.

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“The PW4000-powered 777-200 is slowly fading from service,” he said, and the COVID-19 slump means that airlines forced to suspend it “should be able to fill any network gaps” with 787s or other 777s equipped with General Electric engines.

EARLY FINDINGS

The 777-200s and 777-300s affected are older, less fuel-efficient models still flown by five airlines: United; Japan Airlines; ANA Holdings Inc; Asiana Airlines Inc and Korean Air. Most are in the process of being phased out.

Boeing said 69 of the 777s operating globally with PW4000s had been in recent service, with another 59 stored. Pratt & Whitney engines power less than 10% of the delivered 777 fleet of more than 1,600 planes.

United suspended 24 of its 777s, pre-empting Boeing’s advice, after the Saturday blow-out that dropped the right engine’s protective outer casing near homes.

In the Dutch case, the Longtail pilot was informed of an engine fire by air traffic control after taking off from Maastricht bound for New York, and diverted to Liege, Belgium.

The Dutch Safety Board said on Monday it was investigating the incident.

Examination of the 26-year-old United jet showed damage was mostly confined to the right engine, the U.S. National Transportation Safety Board (NTSB) said. Its inlet and casing became detached and two fan blades were fractured, with others exhibiting damage.

FILE PHOTO: United Airlines flight UA328, carrying 231 passengers and 10 crew on board, returns to Denver International Airport with its starboard engine on fire after it called a Mayday alert, over Denver, Colorado, U.S. February 20, 2021. Hayden Smith/@speedbird5280/Handout via REUTERS/File Photo

The FAA said early findings suggested that “inspection interval should be stepped up for the hollow fan blades that are unique to this model of engine, used solely on Boeing 777 airplanes”.

Earlier in-flight PW4000 engine failures have previously been examined by authorities.

Another United 777 of the same vintage suffered an engine failure in February 2018, when a cowling fell off about 30 minutes before the plane landed safely. A full-length fan blade fracture was behind the incident, the NTSB determined.

After a malfunction forced a Tokyo-bound JAL 777 to return abruptly to Naha airport in December, Japan’s Transport Safety Board reported finding two damaged fan blades, one with a metal fatigue crack. Its investigation is ongoing.

JAL, which operates 13 of the planes, said they were scheduled for retirement by March 2022.

Reporting by Jamie Freed in Sydney, David Shepardson in Washington and Laurence Frost in Paris; additional reporting by Eimi Yamamitsu and Maki Shiraki in Tokyo, Joyce Lee in Seoul, Tim Hepher in Paris and Anthony Deutsch in Amsterdam; Editing by Sam Holmes, Christopher Cushing and Emelia Sithole-Matarise

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Barrick Gold profit beats expectations as copper, gold prices surge

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JOHANNESBURG (Reuters) -Barrick Gold Corp reported a 78% jump in first-quarter profit on Wednesday, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.

Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia.

Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.

Adjusted profit surged 78% to $507 million in the quarter ended March 31, from $285 million a year earlier, and Barrick announced a 9 cent per share quarterly dividend.

Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.

“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.

POTENTIAL FOR SOUTH AFRICA MERGER

Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.

Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger in March.

“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.

Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.

Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900 million belonging to its Kibali mine joint venture out of the country.

“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.

(Reporting by Helen Reid in Johannesburg and Arundhati Sarkar in Bengaluru; editing by Shounak Dasgupta and Bernadette Baum)

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Loblaw gets quarterly sales, profit boost from online demand surge

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Retailer Loblaw Cos Ltd beat market estimates for quarterly revenue and profit on Wednesday, as its online sales more than doubled on soaring demand from homebound buyers for groceries and other essentials during the COVID-19 pandemic.

Lockdowns and other virus-related restrictions in Canada, including reduced store capacity, during the first three months of the year pushed consumers to stockpile groceries and other essential items.

Loblaw, one of the biggest retailers in Canada, said that the momentum from the first quarter has continued into the current quarter, adding that it expects to exceed its own full-year profit expectations.

However, the company has warned that its food retail unit, which saw a surge last year at the peak of stockpiling, would not be as robust in the current quarter. In the first month of the ongoing quarter, food same-store sales have declined slightly, Loblaw said.

For the second quarter, the company expects to incur pandemic-related costs of about $65 million to $75 million, compared with $282 million a year earlier.

Net earnings available to its common shareholders rose to C$313 million, or 90 Canadian cents per share, in the quarter ended March 27 from C$240 million, or 66 Canadian cents per share, a year earlier.

Excluding one-time items, the retailer earned C$1.13 per share, beating the average analysts’ estimate of 87 Canadian cents per share.

Its revenue rose to C$11.87 billion ($9.67 billion) in the first quarter from C$11.80 billion a year earlier, surpassing analysts’ estimate of C$11.72 billion, according to IBES data from Refinitiv.

($1 = 1.2277 Canadian dollars)

(Reporting by Mehr Bedi in Bengaluru; editing by Uttaresh.V)

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Bombardier in talks to amend bondholders’ agreement after breach claim on asset sales

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(Reuters) – Bombardier on Monday contested a bondholder’s claims that its recent sales of non-core assets breach the terms of certain notes, and said it would seek bondholders’ consent to amend terms on eight bond issues.

Bombardier has emerged as a pure play business jet maker after divesting assets including the sale of its transportation business to Alstom, which it completed in January, to pay down debt and boost earnings.

The company said it launched consent solicitations with respect to outstanding senior notes or debentures, following the claims by the unnamed bondholder that the asset sales constitute a breach of certain covenants under the indenture governing the 2034 notes.

Bombardier said in a statement these claims are without merit and it has not breached any covenant, adding that after evaluating various options it had determined requesting bondholders to amend the terms of the bonds was the most “expedient and efficient path” to maintain value and protect itself and its stakeholders.

If the amendments are approved, Bombardier will make a consent payment of $1.25 per $1,000 principal amount for applicable series of notes, and C$1.25 per C$1,000 principal of Canadian dollar-denominated 7.35% debentures due 2026, the statement said.

Bombardier also flagged early first-quarter revenue that would beat analysts’ estimates, as rising vaccinations encourage wealthy travelers to return to flying.

Bombardier reports earnings on Thursday.

The jet maker said it expects first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations of $123 million, above analysts’ average estimate of $89 million, according to IBES data from Refinitiv.

The company expects business jet revenue to rise by 18% to $1.3 billion in the first quarter, from a year ago, beating Wall Street’s estimate of $1.18 billion.

Bombardier stock closed up 3.3%.

While deliveries are roughly the same, Bombardier’s product composition is shifting toward its flagship Global 7500 jets, a revenue driver.

Bombardier said it remains on track to deliver between 110-120 business aircraft in 2021. The company’s full-year deliveries fell 20% to 114 jets in 2020.

 

(Reporting by Ankit Ajmera in Bengaluru and Allison Lampert in Montreal; Editing by Shailesh Kuber and Karishma Singh)

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