Company news in brief

31 January 2019 | Business

Absa seeks new blood after decade under Ramos

South African lender Absa plans to appoint an external candidate as its new CEO following the sudden departure of its boss of ten years, Maria Ramos, with analysts and investors hoping they will breathe new life into the lagging bank.

Absa's Tuesday announcement that Ramos, one of global banking's few female CEOs, would retire at the end of February took some analysts and investors by surprise and sent the bank's shares up by 4%.

Absa chair Wendy Lucas-Bull said Ramos had wanted to step down in 2016, but agreed to stay on after former parent Britain's Barclays said it wanted to sell down its stake, leaving Absa to chart its own course.

Jan Meintjes, a portfolio manager at Absa investor Denker Capital, said he was pleased the bank, which had been losing market share and top talent, was seeking an external candidate.

"More of the same thinking is probably going to get you more of the same results," he said, adding he wants the new boss to focus on getting the basics right and make sure Absa's products and services are competitive. – Nampa/Reuters

Vale to cut output, shut down dams

Vale SA, the world's largest iron ore miner, on Tuesday vowed to take as much as 10% of its ore output offline in order to decommission 10 more dams like the one that burst last week, killing scores of workers and nearby residents.

Chief executive Fabio Schvartsman said it would temporarily paralyse operations using those dams and spend 5 billion reais (US$1.3 billion) to decommission them over the next three years.

The move came as prosecutors began arresting Vale executives over the Friday collapse of a tailings dam in the Brazilian town of Brumadinho, which was hit by a torrent of mining waste that killed at least 84 people and left hundreds more missing.

The disaster raised fresh questions about the company's commitment to safety after a similar deadly dam burst just over three years ago at a nearby mine it jointly owned.

A corporate presentation seen by Reuters showed that the company had studied but did not implement several steps that could have prevented or lessened the damage from the Brumadinho disaster. – Nampa/Reuters

Apple lowers some iPhone prices outside US

Apple Inc plans to cut the price of some of its flagship iPhones for only the second time in the device's 12-year history, pegging its retail value to past prices in local currencies outside the United States instead of the rising US dollar.

The move is an attempt to stem weak sales of the iPhone, particularly in overseas markets such as China, where a 10% rise in the US dollar over the past year or so has made Apple's products - which already compete at the top end of the market - much pricier than rivals.

Apple chief executive Tim Cook disclosed the plan on Tuesday after the company reported the first-ever dip in iPhone sales during the key holiday shopping period. The company has only once before cut iPhone prices, shortly after it debuted in 2007.

Apple did not say in which countries it would adjust iPhone prices. Resellers in China already began cutting iPhone prices earlier this month after Apple lowered its sales forecast for the quarter ended in December.

In the company's quarterly earnings call, Cook also highlighted the impact of foreign exchange problems in Turkey, where he said the local lira had depreciated by 33% against the US dollar and Apple's sales were down by US$700 million from the previous year. In November, Apple also cited currency pressure on its prices in Brazil, India and Russia. – Nampa/Reuters

EBay's poor revenue outlook overshadows first-ever dividend

EBay Inc on Tuesday forecast March quarter revenue below Wall Street estimates after reporting disappointing growth in the sales volume on its platform during the key holiday quarter, overshadowing news of its first-ever dividend.

The lackluster forecast comes as San Jose, California-based eBay faces demands from two prominent activist shareholders to sell some divisions and restructure others amid fierce competition with Amazon.com Inc and other online retailers.

EBay had 179 million active buyers at the end of the December quarter, about 2 million more than the previous quarter.

EBay's quarterly profit from continuing operations reached US$763 million, compared with a loss of US$2.6 billion a year earlier, when eBay recorded a one-time expense of more than US$3 billion. – Nampa/Reuters

Pinterest taps Goldman Sachs, JPMorgan to lead IPO

Pinterest, the owner of the image search website known for the food and fashion photos that its users post, has hired Goldman Sachs Group Inc and JPMorgan Chase & Co to lead its initial public offering (IPO) later this year, people familiar with the matter said on Tuesday.

Pinterest's IPO preparations come at a time when social media companies such as Facebook Inc and Twitter Inc are under fire from politicians for concerns about privacy and political bias, challenges that Pinterest has avoided.

Pinterest could raise around US$1.5 billion in the IPO, which is likely to come in the first six months of 2019, the sources said, requesting anonymity to discuss the planning arrangements.

Pinterest, which was valued at US$12 billion in its last fundraising round in 2017, is among a host of technology startups with popular consumer brands gearing up for multi-billion IPOs in 2019, including Uber, Lyft, AirBnB and Slack.

The San Francisco-based company has grown rapidly since its founding in 2008, boasting 250 million monthly active users last September. – Nampa/Reuters