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Basch Report
Jax Daily Record Thursday, Jun. 25, 202005:10 AM EST

Deutsche Bank official: U.S. cuts complete

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The company hasn’t said how the cuts impacted its offices in Jacksonville.
by: Mark Basch Contributing Writer

Deutsche Bank, which is eliminating thousands of jobs globally as part of a restructuring, has completed making cuts in the U.S., according to its top official in the Americas.

However, the company hasn’t said how the cuts affected its offices in Jacksonville, which has the second-largest U.S. operation outside of New York for the Germany-based bank.

In an interview with the Financial Times, Christiana Riley, CEO of the Americas for Deutsche Bank, said job cuts in the U.S. were completed ahead of target. 

Riley also told the newspaper Deutsche Bank remains committed to keeping operations in the U.S. despite pressures from some shareholders to pull out of the country.

The company said a year ago it planned to cut about 18,000 jobs in its restructuring, bringing its total global employment down to 74,000 by 2022.

At the time, Deutsche Bank said it employed about 2,000 in Jacksonville, where it opened its operations center in 2008 in Southside.

The company’s first-quarter report said it had 86,667 employees worldwide at the end of the quarter.

During Deutsche Bank’s virtual annual meeting last month, CEO Christian Sewing said the reorganization plan remains on track.

“Not only is it working but it’s working better than we originally expected,” he said, according to a transcript posted by the company.

Sewing also said job cuts will continue companywide, but not during the COVID-19 pandemic.

“Since March 26, in the light of the coronavirus crisis, we have refrained from contacting individual employees whose jobs are to become redundant,” he said.

A Deutsche Bank spokeswoman said by email the bank declined to comment on job cuts in Jacksonville.

Pandemic doesn’t impede JinkoSolar

Another international company with a major operation in Jacksonville said last week its business has not been impeded by the pandemic.

Solar-panel manufacturer JinkoSolar Holding Co. Ltd. operates seven plants. Its only facility outside of Asia opened last year at AllianceFlorida at Cecil Commerce Center in West Jacksonville.

As the Shanghai-based company reported first-quarter earnings, CEO Kangping Chen said the company implemented new safety measures in its Malaysia plant that brought production back to normal in April.

“We replicated these health and safety measures for our employees in the U.S., and were able to keep production running smoothly throughout the pandemic,” Chen said through a translator during JinkoSolar’s conference call with analysts.

“With the global demand falling significantly and the price of raw materials declining as a result of the pandemic, we focused our attention on coordinating production logistics and sales to ensure we  could fulfill new orders while carefully controlling inventory levels,” he said.

Chen said he expects global solar installations to drop by about 25% this year because of the pandemic. But he sees growth opportunities for JinkoSolar as the market consolidates.

JinkoSolar reported adjusted first-quarter revenue of $1.03 billion, 25.1% higher than the first quarter of 2019 but 23.5% lower than the fourth quarter. 

The company said the decrease from the fourth quarter reflects a delay in shipments caused by the pandemic.

The company’s earnings per American Depositary Share of 38 cents were 64 cents lower than the first quarter of 2019.

Black Knight stock sale raises $484M

Black Knight Inc. sold 7.13 million additional shares of stock last week at $70.25 each, taking in net proceeds of $484.2 million.

The Jacksonville-based mortgage technology company said it will use the proceeds to pay off debt and for other purposes that could include acquisitions and investments.

Black Knight was spun off from Fidelity National Financial Inc. and like other companies tied to the Jacksonville-based title insurance company, it has become active in deal-making. 

Black Knight was part of an investment group that bought business data firm Dun & Bradstreet Holdings Inc. last year. 

Black Knight owns 18.1% of Dun & Bradstreet and CEO Anthony Jabbour took on the additional role of CEO of Dun & Bradstreet after the buyout.

Dun & Bradstreet two weeks ago filed for an initial public offering.

Meanwhile, a blank check holding company with ties to Fidelity completed its IPO last week. 

Trebia Acquisition Corp. sold 51.75 million units, consisting of one share of stock and a warrant to buy additional stock, for $10 each.

Trebia was formed by Fidelity and Black Knight Chairman Bill Foley and Frank Martire, former CEO of Fidelity National Information Services Inc., another company spun off from Fidelity National Financial.

Trebia was formed to seek acquisition opportunities.

Analyst raises CSX price target

After hosting an investor conference session with CSX Corp. Chief Executive Jim Foote, Deutsche Bank analyst Amit Mehrotra lowered his second-quarter earnings estimate last week.

However, he raised his price target for the Jacksonville-based railroad company’s stock.

Mehrotra expects second-quarter earnings of 65 cents a share, 5 cents lower than his previous estimate, because of a drop in freight traffic.

However, Mehrotra said in his report last week he is “neutral to positive” on the stock and raised his price target from $71 to $80. CSX was trading close to $70 for most of last week.

Mehrotra has a positive outlook for the transportation industry as the economy rebounds from the pandemic.

“At a high-level, the outlook for transportation equities remains favorable. Demand for freight capacity bottomed in late April and is on a slow-and-steady recovery path,” he said.

Rayonier AM gets two-notch upgrade

Rayonier Advanced Materials Inc. got a rare two-notch upgrade last week from Bank of America analyst John Babcock.

He upgraded the Jacksonville-based maker of cellulose specialties products from “underperform” to “buy,” skipping the “neutral” rating in between.

Bank of America generally doesn’t provide analyst reports to the media but investment website Seeking Alpha said Babcock’s upgrade was tied to a new credit agreement in which lenders relaxed financial covenants for Rayonier AM through 2020.

Rayonier AM’s stock rose 42 cents to $2.87 on June 19 after the upgrade, a 17.1% gain.

International Baler reports loss

International Baler Corp. reported a net loss of $63,590, or 1 cent a share, for its second quarter ended April 30, according to its quarterly report filed with the Securities and Exchange Commission.

Sales for the Jacksonville-based maker of balers used for waste disposal and recycling fell 31% to $2.01 million.

International Baler’s report said the pandemic “has not materially adversely impacted our capital and financial resources” so far. 

However, the “economic uncertainty” of the pandemic leaves it unable to predict any future impact on the business, it said.

Analyst says ‘sell’ Kraft Heinz

Sales of Maxwell House coffee made in Jacksonville surged during the COVID-19 lockdown as more consumers ate at home, but one analyst thinks sales gains at parent company Kraft Heinz Co. are likely to be fleeting.

“We downgrade shares of Kraft Heinz to Sell, from Neutral, as we expect the company to suffer outsized sales and earnings declines over the next year as recent sales gains recede, private label share pressure resumes and commodities (which had screened favorable two months ago) pressure margins,” Goldman Sachs analyst Jason English said in a June 22 report.

English expects the “robust” sales growth for Kraft Heinz brands in the first half of this year will moderate in the second half before declining next year. 

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