The fear of an imminent rate hike, raised by the words of Janet Yellen, dissolved on Tuesday evening, leaving no impact on the stocks already racing to recover lost ground. And it matters little that signs of caution emerge here and there, to temper the excesses of euphoria. For example, Canada, first among the G7 countries, has cut a part of the purchases of securities on the market, giving way to the so-called tapering.
To feed the feeling that the recovery has now taken off although the pandemic continues to bite, however, it is above all the leap forward in raw materials, not only oil and ferrous materials, but also agricultural soft commodities, for which someone is already talking about a supercycle. This morning, corn broke through the 7-dollar-a-bushel barrier that had been resisting for eight years, soybeans were also in great shape (+20% since the beginning of the year), together with sugar, dairy products and other raw materials of agricultural origin.
The commodities rally is great news for one of the day's leading stocks: Cnh Industrial, the multinational which, among other things, occupies leading positions in many agribusiness markets, a market already suffering from the customs wars waged by Trump. CNH Industrial advanced by 5,4% in the mid-afternoon driven upwards by the publication of the first quarter accounts, which closed with consolidated revenues up 37% to 7,473 billion dollars (+41% to 7,043 billion those of industrial activities) and a net income of $425 million, $0,32 per adjusted share, versus a loss of $54 million in the same period last year (net income attributable to CNH Industrial was $408 million, versus a previous loss of $65 million). The company has revised upwards its 2021 estimates: net sales revenues are expected to grow between 14% and 18% year over year, free cash flow is expected to be positive between $0,6 billion and $1 billion, and R&D and capital expenditures will amount to approximately US$2 billion.
The operators were waiting for clarifications from the management on Iveco and on the inclusion of the defense and vehicle businesses Special among those object of the spin-off. The explanations came during the conference call following the publication of the accounts, the CEO of CNH, Scott Wine also spoke of Iveco, announcing that the company has "come to the conclusion that focusing only on the execution of the spin-off represents the path more certain and faster towards a separation”. The spin-off was expected in 2020 and was postponed due to the outbreak of the Covid pandemic. In the meantime, negotiations have begun for a possible transfer to Faw Jiefang, which were skipped last month. Wine stressed that "now all the necessary resources are dedicated to our original strategy to spin off the On-highway business, or NewCo, from CNH Industrial by the beginning of 2022". The Defense, Firefighting and Fpt businesses will be included in this spin-off, Wine added, explaining that they "are closely aligned with the types of products designed and manufactured by our commercial vehicle business."
Furthermore, the FinCo (financial services) will be divided into two parts so that both CNH Industrial and the NewCo "are able to grant the best financing to our dealers and customers", said the CEO, underlining that investors and all parties involved will be kept informed of developments. In particular, an investor roadshow is expected in the fourth quarter of this year, followed by an extraordinary general meeting. Then the authorizations of the regulatory authorities will have to arrive, with the aim precisely of arriving at the spin-off in the first quarter of 2022.
The manager did not speak instead of the stake in Nikola, the Arizona start-up (with high volatility) that wants to beat the road already marked by Tesla in trucks as well as launch a hydrogen truck later. It's not the only hi-tech jewel: it exists the Australian AgDna, acquired in 2019 that operates in farm management information systems – an open platform that works without barriers between data segments and brands – but also, more recently, the landing with a minority stake in Augmenta, a company specializing in agricultural technologies, in particular systems for the automation of agricultural operations based on computer vision (Computer Vision) and artificial intelligence.
Both companies will be listed, with registered office in Amsterdam and taxation in Great Britain and assigned equally to the shareholders. And for both, Exor will continue to be the reference shareholder.
(Last update: 17.01 pm on 5 May).
