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Coronavirus punishes Warren Buffett as Berkshire Hathaway takes big writedown

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(Reuters) – Berkshire Hathaway Inc on Saturday announced a $9.8 billion writedown and 10,000 job losses at its Precision Castparts aircraft parts unit, as the coronavirus pandemic caused widespread pain at Warren Buffett’s conglomerate.

Despite the writedown, Berkshire said second-quarter net income surged 87% because of gains in stock investments such as Apple Inc as markets rebounded.

Operating profit fell 10%, cushioned by a temporary bump at the Geico auto insurer, as the pandemic caused “relatively minor to severe” damage to most of Berkshire’s more than 90 operating businesses.

“The writedown was prudent,” said Cathy Seifert, an equity analyst at CFRA Research. “It’s a recognition of what the market has long believed, that the purchase price was rich, and the integration not as smooth as many would have hoped.”

Berkshire, which paid $32.1 billion for Precision in 2016 in its largest acquisition, and which Buffett at the time called a steep price, said COVID-19 caused airlines to slash plane orders, significantly curbing demand for Precision’s products.

Buffett himself soured on airlines during the quarter, selling $6 billion of their stock and telling shareholders on May 2 the industry’s future had become “much less clear to me.”

Berkshire said Precision, which also makes industrial parts, saw revenue fall by one-third and plans an “aggressive restructuring” to shrink operations. Precision ended 2019 with 33,417 employees, and has shed 30% of its workforce.

During the quarter, Buffett, who turns 90 on Aug. 30, also took advantage of Berkshire’s underperforming shares by repurchasing $5.1 billion of stock, even as the pandemic reduced other companies’ ability to buy back their own shares.

Berkshire’s stock has significantly underperformed broader markets since the end of 2018, and Seifert said investors should welcome the buybacks.

“Berkshire tends to go against the grain, and when so many companies suspended buybacks, Berkshire did the opposite,” she said. “The market should react positively, because it shows Berkshire is confident in its prospects.”

Those repurchases confirmed Berkshire’s hint in a July 8 regulatory filing it had become more aggressive with buybacks after loosening its buyback policy in 2018.

Pandemic damage

Berkshire businesses suffering from the pandemic also include the BNSF railroad, which saw lower shipping volumes, and retailers including See’s candies that temporarily closed stores.

Companies in which Berkshire recently made large investments have also been struggling.

Berkshire recorded a $513 million loss on its 26.6% stake in Kraft Heinz Co (KHC.O), after the food company took several writedowns including for Maxwell House and Oscar Mayer.

Meanwhile, Occidental Petroleum Corp, where Berkshire invested $10 billion last August, has also pummeled by sinking oil prices.

Berkshire’s overall quarterly net income rose to $26.3 billion, or $16,314 per Class A share, from $14.07 billion, or $8,608 per share, a year earlier. That followed a $49.75 billion first-quarter loss.

An accounting rule requires Berkshire to report unrealized stock gains and losses with net results, causing huge swings that Buffett considers meaningless.

Second-quarter operating profit fell to $5.53 billion, or about $3,463 per Class A share, from $6.14 billion, or $3,757 per share, a year earlier.

Revenue fell 11% to $56.8 billion, despite gains in some businesses including Duracell batteries, which rose 16%.

Geico’s pretax underwriting profit increased fivefold to $2.06 billion because people drove less, resulting in significantly fewer accident claims.

But Berkshire said Geico could suffer underwriting losses for the rest of the year, as it awards drivers $2.5 billion of credits on auto and motorcycle policy renewals.

Berkshire ended June with a record $146.6 billion of cash and equivalents, and bought just $797 million of equities in the quarter.

Buffett has since deployed some cash, agreeing to buy some Dominion Energy gas assets for $4 billion and adding more than $2 billion of Bank of America Corp stock.

Reporting and photo: Reuters

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BBM’s ‘Studio of Culinary Excellence’ opens at MNU to bridge classroom, industry

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The best way to secure the future is to create it.

Creating that future through specific, purposeful initiatives is what drives people of purpose—and, in turn, moves us all closer to the future we desire.

The Maldives is a compelling case study of a tourism-driven economy. Look around and ask why an event is being staged, what someone is working on, or where a new initiative is leading, and the answer will often point to the hospitality sector. Securing the future, therefore, is inextricably linked to strengthening and advancing that sector.

Here, “strengthening” means making the sector’s contribution more sustainable; ensuring that a greater share of its growth benefits the community; continuing to offer a compelling value proposition to the discerning global traveller; and ensuring that visitor experiences continue to generate an unparalleled reputation and valuable referrals.

To achieve these outcomes in the future, it is essential that current and future generations of the local community engage actively with the industry. Making hospitality appealing and aspirational, enhancing the quality of delivery and service, and building a pipeline of skills and talent into the sector are areas in which initiatives, inspiration, infrastructure and investment should be concentrated.

It is firmly in this context that Mr Ismail Hilmy, Chairman and Managing Director of BBM, initiated the establishment of a modern, exceptionally well-equipped and thoughtfully designed model kitchen, aptly named the Studio of Culinary Excellence. By donating the Studio to MNU, under whose auspices it will serve the Maldivian culinary community, Mr Hilmy is responding directly to the need for deeper community engagement. At the heart of BBM’s framework for industry-outreach initiatives— “Because tomorrows start today”—is Mr Hilmy’s ethos of fostering engagement and vibrancy in the industry.

“For our students, the gap between the classroom and a working resort kitchen has always been the hardest one to close,” said Dr Shehenaaz Adam, Vice Chancellor of the Maldives National University. “The Studio of Culinary Excellence closes that gap. Students can now train on the same equipment and to the same standards they will encounter on their first day in the industry. We are grateful to BBM for a partnership that goes well beyond a donation, and we look forward to the Studio becoming a place where the university and the industry learn from one another.”

The Studio therefore creates an opportunity to develop a pipeline of skills and talent in service of the industry.

“Embedding purpose in our work has been an ongoing endeavour at BBM. It keeps us connected to our stakeholders and builds insight, understanding and trust. Being a meaningful partner to academia as we move into the future gives us a great sense of fulfilment and guides our initiatives under the banner, ‘Because tomorrows start today,’” said AVS Subrahmanyam, Chief Operating Officer of BBM.

But what is the value of physical infrastructure without the corresponding spark of aspiration and ambition?

As Ali Afrah Hassan, Executive Representative at Chairman’s Office – BBM, aptly observed: “The Studio offers students and members of the community hands-on experience with world-class equipment, together with knowledge-sharing masterclasses. Who knows—in the not-too-distant future, a Michelin-starred Maldivian chef may fondly credit some of their inspiration to time spent at the Studio!”

Now that is the mind and heart in sync—working towards a future that is aspirational, ambitious and entirely attainable.

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BBM Hulhumalé Phase 2 opening promotion winner receives Honda Airblade

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Bestbuy Maldives (BBM) has presented a brand-new Honda Airblade motorbike to the winner of a lucky draw held to mark the opening of its newest wholesale outlet in Hulhumalé Phase 2.

The outlet, located at Lot 20286 on Nirolhu Magu, opened on 16 February 2026 as part of BBM’s expansion of its wholesale operations.

To celebrate the opening and thank customers for their continued support, BBM introduced a special lucky draw exclusively for customers who made purchases from the new outlet on its opening day.

Customers who purchased products during the opening were eligible to enter the draw, with a Honda Airblade motorbike offered as the grand prize.

The lucky draw was conducted on 13 August 2026, with Ibrahim Shifaz of Vagthun Vaguthah outlet selected as the winner.

Shifaz was recently presented with the ceremonial key to the Honda Airblade by AVS Subrahmanyam, Chief Operating Officer of Bestbuy Maldives.

The promotion formed part of BBM’s activities surrounding the opening of its Hulhumalé Phase 2 outlet, which provides customers with access to the company’s range of wholesale products from the growing residential and commercial area.

Bestbuy Maldives is a supplier and distributor serving businesses across the Maldives, including customers in the hospitality, food service and retail sectors.

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Football legends receive FIFA World Cup 2026 match balls signed by President Muizzu

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Male’ Aerated Water Company (MAWC), the authorised bottler of The Coca-Cola Company in the Maldives, on Thursday hosted the Official FIFA World Cup 2026™ Match Ball Handover Ceremony, presenting Football Legends of Maldives with official FIFA World Cup 2026™ match balls signed personally by Dr Mohamed Muizzu, President of Maldives.

Held in partnership with the Ministry of Youth Empowerment, Sports and Fitness, the ceremony recognised former national footballers whose achievements, service and influence have helped shape football in the Maldives and inspired generations of players and supporters.

The Coca-Cola Company has been an official partner of FIFA since 1974, making it one of the longest-standing partnerships in the global sport. For MAWC, the handover brought that global partnership to life locally by connecting the FIFA World Cup with people who have contributed to Maldivian football history.

As the sole authorised Coca-Cola bottler in the Maldives for over 35 years, MAWC has supported local sport through partnerships, campaigns and community initiatives. The ceremony continued that commitment by recognising the legacy of players who represented the Maldives and contributed to the growth of football in the country.

“Maldives’ football legends have given generations of supporters moments of pride and have played an important role in shaping the country’s sporting history. At MAWC, we believe recognising their contribution is as important as supporting the next generation. Through our partnership with Coca-Cola and FIFA, and in collaboration with the Ministry of Youth Empowerment, Sports and Fitness, we are honoured to celebrate their legacy. These match balls are a token of our appreciation for what they have given to Maldivian football,” said Milind Derasari, Chief Operating Officer, MAWC.

Adding to the excitement of the football season, MAWC ran a nationwide FIFA World Cup 2026™ consumer promotion from 21 March to 24 May 2026. Eight winners received an all-expenses-paid experience for two to attend a FIFA World Cup 2026™ match. Hundreds more won Coca-Cola branded merchandise and other prizes during the campaign, bringing the excitement of the world’s largest football tournament to consumers across the Maldives.

MAWC remains committed to building partnerships that support the development of sports across the Maldives, working with the Government of Maldives and other partners.

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