World

Argentina’s 100 percent inflation is wearing down its top companies

Inflation of more than 100 percent in Argentina is erasing the advantage the country’s top companies used to have by booking revenue in US dollars.

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Investor darlings in the energy sector — natural gas and power producer Pampa Energia SA, pipeline operator TGS SA, and state-run oil driller and refiner YPF SA — are struggling with costs that are coming under pressure from rising prices, which surpassed 100 percent on an annual basis last month.

In the past, Argentine energy companies could compensate for inflation on their balance sheets through revenues linked to the US dollar. But with the national peso currency strongly controlled by the government, these days depreciation of the exchange rate is no match for the pace of price increases affecting everything from machinery to wages.

“We do see dollar inflation in our costs and there’s not much that we can do against these movements of the macro environment,” Pampa CEO Gustavo Mariani said on a March 13 earnings call. The company’s adjusted earnings in the fourth quarter were $183 million, down 26 percent from the previous quarter, in part because of the inflation trend.

Investor relations officer Lida Wang said on the call that the company was especially grappling with the need to increase wages to retain talent.

TGS’s biggest business line — selling natural gas liquids whose prices are tied to dollars — is suffering.

Earnings from its liquids segment were negatively impacted in the fourth quarter as inflation last year outstripped peso depreciation by 23 percentage points, CFO Alejandro Basso told analysts.

YPF, which is leading development of Argentina’s shale riches, has been combating a similar problem exacerbated by global inflation in oil services.

The company’s operating expenses throughout 2022 in dollar terms grew by nearly a third, “mainly explained by the continued overall accelerated inflationary environment and a slower-than-expected pace of the currency depreciation,” according to an earnings report. Adjusted earnings fell 38 percent in the fourth quarter from the prior three-month period.

While new power contracts and natural gas sales have an automatic correlation with the exchange rate, it’s an uphill battle for state-run YPF to ensure gasoline and diesel prices do likewise, especially in an election year. That can hurt its shale-drilling investments.

“That’s the million-dollar question,” CFO Alejandro Lew said at a March 10 earnings event at the New York Stock Exchange. “How we are going to tackle price adjustments.”

Outside of the energy industry, food producer Arcor SAIC is struggling to make revenue match inflation because of concerns about stifling demand and the risk of government regulation, according to a March 16 note by Esteban Arrieta and Ezequiel Fernandez of Balanz Capital Valores.

Arcor’s price increases lagged 2022’s inflation by about 28 percentage points, Arrieta and Fernandez estimated.

Argentine media conglomerate Grupo Clarin blamed the mismatch between inflation and the exchange rate for a 27 percent decline in adjusted earnings in the fourth quarter from a year prior.

“Argentina enters 2023 with no tailwind,” Samantha Lee Olivieri, investor relations officer at Grupo Clarin, said on a March 15 earnings call. Inflation “acceleration took place with no correlation to the official exchange rate parity.”

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World

Saudi Fund for Development Celebrates 50 Years of Global Impact with Over $20 Billion in Development Contributions

The Saudi Fund for Development (SFD) celebrated its 50th anniversary in Riyadh today, under
the theme “50 Years of Global Impact.”The event brought together key development partners to
reflect on the SFD’s significant contributions to sustainable development worldwide. Over the
past five decades, the SFD has allocated over $20 billion, financing more than 800 development
projects and programs in vital sectors, including social infrastructure (education, healthcare,
water and sewage, and housing and urban development), communication and transportation
(roads, railways, airports and seaports), energy, agriculture, mining and industry, and others.
Since its inception in 1974, the SFD has been the international development arm of the Kingdom
of Saudi Arabia and has provided critical support to over 100 developing nations around the
world. With a strong focus on supporting countries to achieve the Sustainable Development
Goals (SDGs), the SFD has played a pivotal role in driving sustainable development in Least
Developed Countries (LDCs) and Small Island Developing States (SIDS).
During the event, SFD Chairman H.E. Ahmed Al-Khateeb emphasized the importance of
collaboration in driving global development. He highlighted that SFD’s success is deeply rooted
in its partnerships, with 27 development projects and programs in 23 developing countries in
2023 co-financed with other funders. He also underscored the need to forge new partnerships and
strengthen existing ones to create a world where every individual has the opportunity to reach
their full potential.
Reflecting on this significant milestone, the SFD CEO , Mr. Sultan bin Abdulrahman Al-
Marshad, stated: “As we celebrate five decades of impactful work, we are committed, now more
than ever, to supporting developing countries on their journey to economic self-reliance and
resilience. Our goal is to ensure that all children can go to school, that education is not a
privilege but something every child should have access to, and that families have access to
healthcare and basic vital services. Equally, we focus on critical infrastructure development, like
building roads and enhancing airports and sea ports, so that countries can thrive and engage in
economic activities and trade. This work is not just about financing; it’s about tangibly
improving lives, creating opportunities, empowering communities, and building a more
prosperous future.”
On the sidelines of the 50 th Anniversary Gala, the SFD and the Asian Development Bank (ADB)
signed a new $25 million agreement to co-finance a renewable energy development project in the
Solomon Islands. This marks the first project for SFD in the Solomon Islands. The primary aim

of the project is to develop renewable energy infrastructure, reduce dependency on fossil fuels,
and promote sustainable development in the region.
This agreement builds on SFD’50 years of transformative impact through development projects
that have spanned Africa, Asia and the Pacific, Latin America and the Caribbean, and Eastern
Europe.
This includes key projects such as the Metolong Dam in Lesotho, which received $25 million in
funding and now provides potable water to 280,000 people, enhancing water security and public
hygiene and health in the region. This is just one of the 433 projects across Africa, with a total
funding of $11.5 billion, which focuses on critical areas such as infrastructure and water security.
In Asia, the SFD has funded 271 projects with a total funding of $7.8 billion. One notable
example is the SFD’s contribution to the Mohmand Dam Hydropower Project in Pakistan, which
has an overall project cost of $240 million. The projects contributes to the country’s energy
security and flood resilience by generating 800 megawatts of renewable energy and storing 1.6
million cubic meters of water.
In Latin America and the Caribbean, the SFD has financed 21 projects, totaling $951 million
USD. This includes rehabilitating the Water and Sewage System in Havana, Cuba, where the
SFD has allocated $35 million to enhance public infrastructure. Another significant initiative is
the rebuilding of St. Jude Hospital in Saint Lucia, supported by $75 million funding, which will
contribute to providing high-quality health services to citizens in a modern and sophisticated
facility and providing sufficient medical supplies and equipment to support the effective
operation of the hospital.
In Eastern Europe, the SFD has contributed to 14 projects with a total investment of $303
million. A key initiative is the construction of the Tirana-Elbasan-Chokos-Chalf-Ploce Road,
where the SFD provided $73.8 million to rebuild essential roads and bridges, thereby boosting
regional economic activities.
During the celebration, esteemed speakers shared insights on the SFD’s pivotal role in global
development, and in championing critical partnerships and collective action and response.
Keynote speakers included:

 HRH Prince Turki bin Faisal Al Saud, Founder and Trustee of the King Faisal
Foundation
 H.E. Ahmed bin Aqeel Al-Khateeb, Chairman of the Board of Directors of the SFD
 H.E. Akinwumi Adesina, President of the African Development Bank Group
 H.E. Muhammad Al Jasser, Chairman of the Islamic Development Bank

These global development leaders emphasized the SFD’s commitment to fostering sustainable
growth in countries and communities with the most pressing developmental needs. The gala was attended by more than 500 people, including ministers, heads of regional and international organizations, ambassadors, representatives of the United and other distinguished
guests. As the SFD looks to the future, it reaffirms its mission and pledge to drive international
development efforts, on behalf of the Kingdom of Saudi Arabia, and to contribute to global
stability, social progress, and economic prosperity for future generations.

World

Jordan warns of escalation in southern Lebanon

Jordan warned on Sunday of the increasing escalation in southern Lebanon and a potential regional war in light of the ongoing Israeli aggression in Gaza, Jordan News Agency (Petra) reported.

Foreign Ministry spokesperson Sufian Qudah discussed supporting Lebanon, its security, stability and the safety of its people and institutions, noting the need to adhere to Security Council Resolution 1701 to reduce and prevent further escalation and protect the region from the risk of slipping into a regional war.

Qudah added that the Israeli war on Gaza and the failure to reach an exchange agreement that leads to an immediate and permanent ceasefire puts the entire region at risk of the conflict expanding.

He discussed launching an effective international movement that imposes an immediate cessation of the aggression on Gaza.

World

China issues guidelines for coordinated digital, green transformation

China’s Office of the Central Cyberspace Affairs Commission and nine central departments have issued new guidelines for the coordinated transformation toward digital development and green growth, Xinhua News Agency reported.

Published on Saturday, the guidelines focus on two main areas: promoting the green, low-carbon development of digital industries and accelerating the green transformation of various sectors through digital technology.

They aim to accelerate the coordinated transformation toward digital development and green growth, promote the integration of emerging technologies with green, low-carbon industries, and enhance traditional industries using digital and green technologies.

Outlining fundamental principles, the guidelines specify the roles of authorities, industry associations, universities, research institutes and businesses in driving this transition.

They provide a three-part framework covering the basic capacity, technological systems and industrial systems for digital-green integration.

Regions are encouraged to focus on high-quality development, develop new quality productive forces, leverage local resources and create specialized industries and functional advantages to accelerate coordinated digital and green development.