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On the rise

Shares of Toronto-based Inc. (PTS-T) soared after it announced that it has agreed to be acquired by Plusgrade Parent L.P. for US$25 per common share in a deal valued at US$385-million.

The stock closed at US$17.17 on Friday on the Nasdaq.

“We are thrilled to be joining forces with Plusgrade in what will become a truly global leader and provider of value-adding and revenue-generating services for partners in the airline, hospitality, rail and financial services industries,” said Points CEO Rob MacLean

The transaction will be subject to the approval of at least two-thirds of shareholders at a meeting expected to be held in late June.

BioNTech (BNTX-Q) increased as its first-quarter sales and earnings more than tripled thanks to demand for the COVID-19 vaccine it developed with Pfizer, but the German biotech firm is still forecasting a full-year decline in vaccine sales.

Quarterly revenues more than tripled from a year earlier to 6.37 billion euros (US$6.73-billion), as did net income, to 3.70 billion euros, the company said on Monday.

“As a result of an increased order volume initially placed in late 2021 following the then-emerging Omicron variant, we began the year 2022 with strong revenues and earnings, leaving us well-positioned to achieve the 2022 financial guidance,” finance chief Jens Holstein said.

BioNTech stood by its 2022 vaccine revenue guidance of 13 to 17 billion euros, down from 19 billion last year, implying a decline during the rest of the year.

As previously, BioNTech based its guidance only on firm 2022 orders, which were unchanged at about 2.4 billion doses from a March estimate.

Partner Pfizer (PFE-N) last week also only considered the current order backlog for its 2022 COVID vaccine sales forecast of $32 billion, down from $36.8 billion last year.

Rival Moderna (MRNA-Q) was more bullish last week, forecasting higher vaccine sales for the second half of the year than in the first, as it expects demand for booster shots in the autumn.

Demand for established COVID vaccines has waned in North America and Europe as those willing to get the shot have mostly had their three-shot course and more shots are only recommended for a small group of most vulnerable seniors.

On the decline

Rogers Communications Inc. (RCI.B-T) was down as it scrambled to rescue its $26-billion takeover of Shaw Communications Inc. (SJR-B-T) by lining up a suitable buyer for Shaw’s wireless carrier Freedom Mobile after Canada’s competition watchdog vowed to take steps to block the merger of the country’s two largest cable networks.

The Competition Bureau notified Rogers on Friday that it plans to oppose the Toronto telecom giant’s takeover of Calgary-based Shaw, prompting the two companies to push back the deadline for closing the deal from June 13 to July 31.

The companies said in a statement early Saturday morning that they remain committed to the deal and plan to oppose the application by Matthew Boswell, the Commissioner of Competition.

The bureau will file its reasons for blocking the deal as early as Monday, according to analysts. They said the regulator’s major issue is ensuring Rogers sells Shaw’s Freedom Mobile division to a new owner that will make a long-term commitment to ensuring competition in cellphone markets. Freedom is the country’s fourth largest wireless carrier with roughly two million customers in Ontario, Alberta and B.C.

See also: Willis: Rogers failed to listen to Ottawa, and now its Shaw deal is in jeopardy

- Alexandra Posadzki and Andrew Willis

Ensign Energy Services Inc. (ESI-T) slid after it reported first-quarter revenue of $332.7-million up from $218.5-million a year ago and ahead of expectations of $330.1-million.

Funds flow from operations for the first quarter increased 65 per cent to $76.7-million from $46.5-million in the first quarter of last year, the company stated.

Net income was $6.6-million or 4 cents per share compared to a net loss of $43.6-million or 27 cents per share a year ago.

In a research note, ATB Capital Markets analyst Waqar Syed said: “I has been an outperformer year-to-date (up 150 per cent), and we believe that the underlying fundamentals in the drilling business are very strong, with pricing/margin momentum ahead. Margins improved quarter-over-quarter by about 130 basis points, which is indicative of improved pricing in the US and Canada, and, excluding the seasonal impact in the Canadian business in Q2/22, margins should continue to improve in the US and International markets in Q2/22. While in-line results may not excite the market following superior YTD performance, we encourage investors to look at the strong underlying improvement in liquidity and positive FCF generation in Q1, which is typically a quarter of negative FCF for the service sector. Improvement in net debt is a clear positive.”

First Quantum Minerals Ltd. (FM-T) was down after it said on Sunday that its board has approved plans for a US$1.25-billion expansion of the company’s Kansanshi copper mine in Zambia, first floated in January 2020, a decision the miner said was prompted by “renewed confidence” in Zambia’s investment climate.

Since President Hakainde Hichilema’s election last August, Zambia has implemented business-friendly reforms including allowing mining companies to deduct mineral royalties from their income tax assessments.

First Quantum pointed to that reform in particular as key to unlocking approval for the Kansanshi expansion, saying it “realigned Zambia with international best practice.”

FQM also said it approved a further US$100-million investment in its Enterprise nickel project in Zambia, which it expects to start producing in 2023, ramping up to annual production of 30,000 tons of nickel in concentrate.

FQM said the US$1.35-billion package overall represents the largest investment in Zambia since its Sentinel project was approved in 2012.

FQM and the government have also reached agreement on outstanding value-added tax repayments owed to it and an approach for repayments based on offsets against future mining taxes and royalties, the company said.

The announcement came just ahead of the Mining Indaba conference in Cape Town where Hichilema was set to speak on Monday, aiming to draw new investment into the country’s mining sector.

Africa’s second-biggest copper producer, Zambia aims to increase production to 3 million tons of copper a year within the next decade. The country produced 800,696 tons of copper in 2021.

Palantir Technologies Inc. (PLTR-N) forecast second-quarter revenue below Wall Street expectations on Monday, indicating slowing sales growth, and missed first-quarter profit estimates, sending shares plummeting.

The company, known for its work with the U.S. Army and the Central Intelligence Agency, said it still sees a “wide range” of potential upside to its forecast from “developing geopolitical events”.

But slowing revenue growth at the software maker’s government business, which rose 16 per cent in the first quarter, also raised concerns.

Palantir forecast adjusted operating margin of 20 per cent for the current quarter, compared with 31 per cent a year earlier, as it ramps up spending on its salesforce to help the company close more deals.

The company expects second-quarter revenue to be US$470-million, implying a growth of just 25 per cent year-over-year, compared with 49-per-cent growth a year earlier. Analysts on average expected a revenue of US$483.9-million.

Palantir’s Chief Operating Officer Shyam Sankar said the Ukraine war had no incremental impact on its first quarter, but the company has been working and investing in anticipation of contract awards from governments and expects “marginal impact” in the second quarter and more growth beyond that.

But RBC Capital Markets analyst Rishi Jaluria said some of that impact should realistically start to show up as backlog. He added that not getting immediate government business by now despite the war in Ukraine was not a good sign.

Palantir reported first-quarter revenue of US$446.4-million, above Refinitiv IBES estimates of US$443.4-million, driven by strength in its U.S. commercial business.

Excluding items, it earned 2 US cents per share, missing estimates of 5 US cents per share. COO Sankar said the company saw 2 US cents of loss per share related to Palantir’s investments.

Rivian Automotive Inc. (RIVN-Q) dropped following a CNBC report Ford Motor Co. (F-N) plans to sell 8 million shares.

The automakers post-IPO lock up period expired on Sunday. Its shares are trading at their post-IPO low, down about 84 per cent since the peak on Nov. 16

As of Dec. 12, Ford owned 102 million shares, or 11.4 per cent, making it its fourth-largest holder

According to the report, JPMorgan Chase also plans to sell a Rivian share block of between 13 million and 15 million for an unknown seller.

Cosmetics maker Coty Inc. (COTY-N) raised its full-year profit outlook on resilient demand for its high-end fragrances and skincare products even at a time inflation in most countries has soared to multi-year highs.

The company’s shares fell in trading on Monday.

Demand for luxury goods has held up as higher prices of everyday essentials have not affected the spending power of the affluent, updates from cosmetics group L’Oreal and Birkin bag maker Hermes have shown in recent days.

Revenue at Coty’s prestige division, that houses cosmetics and fragrances from the Hugo Boss, Gucci and Burberry brands, rose 21 per cent to US$726.4-million for the third quarter ended March 31.

“(Coty’s) prestige brands are seeing phenomenal growth, which means that consumer confidence to buy our brands is intact,” Chief Executive Officer Sue Nabi said.

Coty, which has also raised prices to combat higher costs, saw its gross margin rise to 64.3 per cent.

On an adjusted basis, the company earned 3 US cents per share in the reported quarter, beating estimates of a profit of 1 US cent per share, according to Refinitiv IBES data.

Electric vehicle startup Lordstown Motors Corp. (RIDE-Q) said on Monday it needed US$150-million in addition to the proceeds from its sale of assets to Taiwanese contract manufacturer Foxconn to put its Endurance pickup truck into the hands of customers.

The company’s stock was set for its worst day in over two months.

Supply chain woes and rising material costs are limiting the industry’s capability to produce sufficient electric vehicles to meet soaring demand.

In November last year, Lordstown Motors said it had entered an agreement with Foxconn for the sale of its Ohio facility for US$230-million excluding certain assets such as the hub motor assembly and battery pack lines.

Lordstown Motors said it needed additional capital, apart from the proceeds from the deal with Foxconn, to scale up the production of the electric pickup truck, complete testing, purchase materials and vehicle components.

The company, which also reported first-quarter results, said it had a cash balance of US$204-million, compared with US$587-million a year earlier.

With files from Brenda Bouw, staff and wires

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