Arrival, an electric car startup founded in Great Britain by former deputy head of the Russian Ministry of Communications Denis Sverdlov, which is restructuring its business amid a set of problems, posted a $1 billion net loss in 2022, according to a company report.
Arrival’s fourth-quarter loss rose to nearly $600 million from $67 million in the same period in 2021, according to preliminary unaudited filings. The figure includes non-cash impairment charges and write-downs of more than $400 million. For all of 2022, the company estimates a loss of about $1 billion, compared with a loss of $1.3 million in 2021, which included a one-time non-cash charge of $1.2 billion related to the merger of Arrival and CIIG.
Adjusted negative EBITDA for the fourth quarter will be up to $172 million compared to $85 million in the same period of 2021. The company attributes the increase to about $70 million more in payroll and contractor costs and about $25 million more in component spending. Expected adjusted negative EBITDA for 2022 is about $380 million versus $203 million in 2021.
The company’s cash balance decreased by $126 million in the fourth quarter to $205 million by year-end. The money was used for working capital ($104 million), interest payments on loans and lease obligations ($11 million), capex expenses and other operating expenses.
Sverdlov (formerly head of operator Yota, and in 2012-2013, deputy minister of telecommunications of the Russian Federation. – Sverdlov (formerly the head of Yota, and Deputy Minister of Communications of the Russian Federation from 2012 to 2013) created Arrival in 2015. The startup raised funds from international investors and planned to roll out mass production of electric vehicles for large cities, proposing the concept of assembly in so-called “microfactories” as an alternative to conveyor car production.
In March 2021 Arrival went public on the Nasdaq exchange through a merger with SPAC. The company’s capitalization immediately after the IPO was valued at $13.6 billion, and Sverdlov, who controls 75% of Arrival through Kinetik Sarl, broke into the top 20 of Forbes Russia last spring. The magazine estimated his fortune as of April 2021 at $10.6 billion.
However, the full-scale war unleashed by Russia against Ukraine, as well as the adjustment of the company’s ambitious production plans, the rejection of the European market and the layoff of some employees led to the fact that the share price of Arrival by the end of November 2022 collapsed by almost 99% – from $22 when it was placed to just over $0.3. The price of the securities below $1 caused Arrival to receive a warning about possible delisting from Nasdaq back in early November. The exchange gave the startup six months, during which its shares must rise above $1 and stay there for at least 10 days in a row.
Amid the problems, Arrival announced plans to focus resources on developing US Van vans for the U.S. market. The company hopes to begin producing them in the U.S. city of Charlotte in 2024 “subject to raising additional capital.” “We will use $330 million in funds to achieve our U.S. goals and look to raise additional funds,” Sverdlov was quoted by Arrival’s press office as saying in a press release for its Q3 2022 reporting.
In early November, Arrival reported that the company may not have its first revenue until 2024, rather than 2023 as previously planned. The company reported a tenfold increase in net loss in Q3 (to $310.3 million) and a $330 million cash reserve, noting that the reserve would fund the business for the next 12 months.
Sverdlov stepped down as CEO of Arrival in late November 2022 to head the board of directors. By the end of January, Peter Cuneo, the company’s acting head, had already handed over the CEO position to Igor Torgov, the former head of telecom operator Skartel (Yota brand), who had previously worked with Sverdlov at Yota.
“After a detailed evaluation of Arrival and the electric car market over the past two months, the company’s management and board of directors have taken decisive action to make better use of current resources and optimize the business. These actions reaffirm our commitment to becoming a leader in innovative products and new, more efficient methods of producing vehicles, especially in the important U.S. commercial electric car market,” Arrival’s press office quoted Torgov as saying in a January announcement.
In the same announcement, the startup confirmed its intention to cut up to 800 people — about half of its staff — to optimize costs. “Combined with other real estate and third-party cost-cutting measures, the company expects to halve its current business spending, to about $30 million per quarter,” the press release said.
Naftogaz of Ukraine on Friday improved a month-old proposal to restructure Eurobonds it defaulted on last summer, with the main changes affecting bonds maturing in 2022.
According to the presentation on Naftogaz’s website, it is proposed to increase the interest rate on Eurobonds-2022 from the date of approval of the proposal from 7.375% to 7.65% per annum, and also around April 15, together with overdue interest pay 5% of the principal amount of debt.
At the same time, Naftogaz offers to defer the payment of 50% of the principal debt for two years – until July 19, 2024, and the remaining 50% – until July 19, 2025, while in February it proposed to repay the entire issue on July 19, 2024.
As for the postponement of the redemption of Eurobonds-2026, the proposal remained the same: 50% for one year, until November 8, 2027, and another 50% until November 8, 2028.
Payment of interest on Eurobonds-2022 due on January 19, 2023, July 19, 2023, and January 19, 2024 is proposed to be postponed until July 19, 2024. For Eurobonds-2026 from November 8, 2022, May 8, 2023, November 8, 2023 and May 8, 2024 to November 8, 2024.
“Naftogaz wants to reserve the right to both early repayment of the overdue ones and to capitalize them.
PJSC Krukiv Wagon Works (KVSZ, Poltava oblast) finished 2022 with a net profit of UAH 37.25 mln, while in 2021 it posted a net loss of almost UAH 230 mln.
According to the company’s information for the April 11 general meeting of shareholders, published in the information disclosure system of the National Commission on Securities and Stock Market (NSCM), by January 1, 2023 the uncovered loss of KVSZ was 108.9 million UAH – a third less than a year earlier.
“At the end of the company for 2022, the profit is 37.353 million UAH. Taking into account income from revaluation of actuarial liabilities, according to calculation of an independent actuary in the amount of UAH 16.77 million, to approve total profit in the amount of UAH 53.53 million”, – is said in the draft decision of the meeting on the approval and distribution of profits.
According to the document, the profit of UAH 53.53 mln is planned to be used for repayment of losses of previous years.
According to the information of the enterprise, its current liabilities at the beginning of 2023 were UAH 1 billion 022.5 million – 29.7% less, long-term liabilities decreased slightly, amounting to UAH 216.94 million.
The assets of PJSC “KVSZ” amounted to 4 bln 476 mln UAH (7.2% less), including the total accounts receivable almost twice – to 1 bln 938 mln UAH, and the money and equivalents decreased 2.7 times to 559.27 mln UAH.
The equity capital of PJSC by the beginning of this year amounted to UAH 3 bln 2366 mln, including authorized capital – UAH 86.01 mln.
According to the NCCFM, as of the 4th quarter of 2022, Estonian AS Skinest Finants and Osauhing Delantina own 25% each, and Transbuilding Services Limited, registered in England, owns 20% each.
At the same time, as reported, 25% of PAO’s shares (worth over 21.5 million hryvnias) owned by Austrian OW Capital Management GmbH, which is under the control of Stanislav Gamzalov, head of the board of directors of the Russian railcar manufacturer Metalware Plant, were transferred to ARMA by a court decision of July 13, 2022.
In January of this year, the head of Ukrzaliznytsia, Oleksandr Kamyshyn, announced that UZ intended to participate in the ARMA tender for the selection of a manager of the seized stake in KVSZ.
Volodymyr Prikhodko, its president, names KVSZ as the main owner.
KVSZ, Ukraine’s largest railcar building company, produces passenger and freight cars, regional diesel trains, high-speed interregional trains of locomotive traction, and spare parts and bogies for freight cars.
By March of this year KVSZ had completed the delivery of 100 passenger cars to UZ for more than 3 billion UAH. The company did not disclose the number of freight cars produced in 2022.
In 2021, its net income decreased by 23.2% YoY to 2 bln 561 mln hryvnia, and its loss was 230 mln hryvnia against a net profit of 71.8 mln hryvnia.
Meta is exploring the possibility of creating a new social network in which information can be shared, CNN reported, citing a company spokesperson.
“We believe there is an opportunity for a separate space where content creators and public figures can share timely information on their interests,” a Meta spokesperson said in a statement to CNN.
The network notes that the envisioned social network is similar in concept to Twitter.
It is planned that this platform will be decentralized, that is, users will be able to create different servers or communities, each with its own rules, but not one central platform.
U.S. billionaire Ilon Musk bought Twitter for $44 billion last year. The deal, announced in April, was not closed until late October after lengthy litigation between the parties over the disclosure of fake accounts. Since buying the company, Musk has repeatedly stated his intention to respect free speech on the platform.
A number of media outlets have noted that the new platform will be linked to Instagram, allowing users of that social network to access it from their existing accounts.
In January this year, Ukrainian by-product coke plants (COKE) reduced production of bulk coke with 6% moisture in 3.3 times compared to the same period last year – up to 245 thousand tons from 807 thousand tons.
As reported to Interfax-Ukraine by Anatoliy Starovoyt, director general of Ukrkoks association of coke-chemical enterprises (Dnipro), 198,000 tonnes of gross coke, including 171,000 tonnes of metallurgical coke, were produced in December 2022.
According to him, in January-2023 the production of metallurgical coke in the whole country amounted to 212 thousand tons.
Currently, Yuzhkoks, Kametstal (formerly DKHZ), DMZ (Dniprokoks), Zaporizhkoks, and coke-chemical production at ArcelorMittal Kryvyi Rih are operating.
As reported, in 2022, Ukrainian coke plants reduced the production of gross coke 6% moisture by 59% compared with the previous year, to 3.91 million tons, and metallurgical coke – 3.354 million tons.
In 2022, 4.594 million tons of coal concentrate was supplied to domestic CCPs (11M-2021 – 11.834 million tons), including Ukrainian production – 3.158 million tons, imported from Russia (before war) 623.9 thousand tons, from Kazakhstan (before war) – 65.4 thousand tons, Poland – 57.1 thousand tons, Czech Republic – 38.8 thousand tons, USA – 459.5 thousand tons and Australia – 191.5 thousand tons. Including 340.3 thousand tons of concentrate was supplied in December, including 304.6 thousand tons of Ukrainian production, from Poland – 20.7 thousand tons, Australia – 4.2 thousand tons.
Ukraine in 2021 decreased the output of coke by 1.3% compared with 2020 – to 9.543 million tons.
The average value of top models of Rolex, Patek Philippe and Audemars Piguet watches in the secondary market from August 2018 to January this year showed an average increase of 20% per year.
This surpasses the growth rate of the U.S. S&P 500 stock index, which averaged 8 percent annually, according to a Boston Consulting Group report.
Luxury watches are in demand as an alternative investment, the report said. Buyers are willing to pay for watches from the world’s best-known brands as well as leading independent manufacturers, including F.P.Journe and De Bethune, expecting their value to continue to rise. Indeed, luxury watches are performing well, especially in the long term, compared to traditional investment categories, analysts say.
Sales of high-end watches on the secondary market reached $22 billion in 2021, up from $18 billion a year earlier. New watch sales increased to $53 billion from $38 billion.
According to preliminary estimates, in 2022, the former is up about 9% to $24 billion and the latter is up less than 4% to $55 billion.
The average annual growth rate (CAGR) for sales between 2019 and 2026 is projected to be in the neighborhood of 10% for the secondary market, 7% for new watches.
From 2013-2022, the rate of price growth for luxury watches also exceeded the rate of appreciation for other “collectible” assets such as jewelry, handbags, wines, art and furniture, according to the report.
