1. How come Ikea is now profitable?

Ikea started here in 1975 and has endured years of losses in its 10 local big box stores, but 2022 is the most profitable year ever! Eli Greenblat, writing in the Tele explains why and this is what I’ve learnt from him. The profit in 2021 was $7.89 and it became $82m in 2022, on sales of $1.7 billion versus $1.62 billion in 2021.

And believe it or not, but 2020 saw a 4^th loss in a row but Ikea, surprisingly, says the pandemic had no material impact on profits! Despite big sales, Ikea made losses and paid low taxes until 2022. In 2021 it paid $18.22m in taxes but handed over $153.9m this year. So what gives? Eli explained that its profit has been reduced because of what it pays its parent! Like what? Here's Eli again: [Ikea] “…reduced its taxable income by paying more than $2bn in franchise fees, license fees and royalties to its European parent.” And he added: “It’s not illegal!” (That’s my exclamation point, not his, but it deserves one!)

2. Business leader of the year

The AFR has named Macquarie CEO, Shemara Wikramanayake Business Person of the Year. “With this award, she will become the third Macquarie bank person, after Nicholas Moore and David Clarke, on The Australian Financial Review’s list of leaders, builders, pioneers and stirrers who have most shaped Australia’s business landscape since 1963, when the Financial Review became a daily publication,” Tony Boyd reported. “Ms Wikramanayake has positioned Macquarie’s banking, funds management and energy trading businesses to capitalise on the estimated $US2 trillion ($2.95 trillion) of inflows into renewables infrastructure over the next five years.”

3. It's still raining jobs!

“Despite a surge in employment, the unemployment rate was unchanged at 3.4% (still at its lowest level in 48 years) because the participation rate lifted to 66.8% from 66.6% last month (which means that more employed persons are required to keep the unemployment rate unchanged) which is a new record high (the participation rate previously reached 66.77% in June),” AMP’s Diana Mousina tells us. “The pace of jobs growth lifted in November, with the number of jobs up by 64K, following an average of 34K over the prior three months and well above consensus estimates of a 19K rise. Full-time jobs rose by 34.2K and part-time jobs lifted by 29.8K. Hours worked fell by 0.4% but were still 5.4% higher over the year. The ABS reported that a higher level of overseas arrivals (particularly temporary students) is helping to lift employment (note that non-residents who are in Australia for less than a year are not included in the labour force data).” This is not good for inflation and future interest rate rises.

4. ANZ versus climate change activists

The SMH reports that “The bank faced hours of questions from shareholders over its response to climate change on Thursday, amid broader pressure on the big banks to assess the corporate loans they provide to fossil fuel companies and other emitters.” As a consequence, the bank’s CEO Shayne Elliott has agreed to meet young climate activists after several teenagers showed up at the bank’s annual general meeting to question its policies around lending to businesses that are expanding fossil fuel projects,” Simone Fox Koob writes.

5. Sticker shocks will be electric for households

The Australian’s David Rogers talked to Yarra Capital’s Tim Toohey and his views on where energy prices are going because of our anti-carbon stance say it will be bad for hip pockets. This is how Rogers interpreted Toohey’s message: “Sticker shock from a looming spike in electricity and gas bills is set to compound an already dire cashflow situation for consumers.

And this is what Toohey insists is the true story: “Utility companies know this, politicians should know this, but households largely have no idea that they are ultimately on the hook if best intentions of a smooth energy transition turn to custard somewhere along the journey.”