Company news in brief

07 August 2019 | Business

Nedbank’s South African profit stagnates

Nedbank called for more urgent government action to fix South Africa's struggling economy yesterday after first-half earnings at its main domestic operations flatlined.

More of Nedbank's corporate and retail clients defaulted on their debts or swerved riskier investments due to a tough economic environment as unemployment rose to an 11-year high and South Africa had its worst quarterly contraction in a decade.

Nedbank said headline earnings at its retail and business bank and corporate and investment bank, the engines of its operation, rose by just 0.3% and 0.1% respectively.

Nedbank's performance was bolstered by its businesses elsewhere in Africa, which grew headline earnings by 19.6%, helping to lift headline earnings per share - the main profit gauge in South Africa - by 3.5% to 1 435 cents.

Nedbank has benefited from a turnaround at its west African associate Ecobank, which contributed R264 million to headline earnings. – Nampa/Reuters

Diageo pledges for green projects in Africa

British drinks giant Diageo announced Monday it would inject nearly a quarter of a billion US dollars into sustainability projects at 11 of its African breweries, its largest green investment in a decade.

The London-based spirits maker committed to spending 180 million pounds (US$219 million) on renewable energy and water recycling systems at breweries in seven countries to reduce its carbon footprint.

The alcohol multinational said biomass boilers using sustainable fuels would be installed at three breweries in Kenya and neighbouring Uganda, replacing dirtier sources of energy production.

Solar panels would be rolled out at facilities in six countries, starting with Kenya and Ghana, producing up to one-fifth of each breweries' energy needs.

Fifty-million pounds would be provided upfront to kick-off the projects spanning 11 breweries in Kenya, Uganda, Tanzania, South Africa, Seychelles, Nigeria and Ghana. – Nampa/Reuters

China gets majority interest in W. African licences

Australian oil and gas explorer FAR Ltd, which holds a stake in licences for oil drilling off the coast of West Africa's Guinea-Bissau, said a unit of China National Offshore Oil Corp will take a majority stake in the projects.

CNOOC will get a 55.6% stake in the Sinapa and Esperanca licences from Sweden's Svenska Petroleum Exploration AB, whose interest will be reduced to 23.03%, FAR said in a statement yesterday. It did not disclose financial details.

The Chinese oil producer can opt to become the operator of the joint venture after an upcoming offshore drilling campaign is completed.

CNOOC's interest will be converted to a 50% stake if there is a commercial discovery, FAR said.

FAR will continue to hold a 21.42% stake in each of the licences. – Nampa/Reuters

Marriott cuts full-year forecast for key revenue

Marriott International Inc on Monday cut its full-year outlook for a key revenue measure that indicates pricing power as the world's largest hotel chain faces the impact of weakening business travel due to slowing global economic growth.

Shares of the company fell 3% in extended trading after the hotel chain said it now expected revenue per available room (RevPAR) to grow in the range of 1% to 2% in 2019 compared with the prior estimate of 1% to 3%.

Net income fell to US$232 million, or 69 US cents per share, in the second quarter ended June 30, from US$667 million, or US$1.87 per share, a year earlier.

Marriott recorded a US$126 million non-tax accrual in the quarter for the fine proposed by the UK Information Commissioner's Office in relation to the data breach in its Starwoods hotels reservation system.

Revenue fell to US$5.31 billion from US$5.41 billion a year earlier. – Nampa/Reuters

Deutsche Post raises 2019 forecast

Deutsche Post DHL said yesterday it expects a further improvement in earnings in the second half of 2019 due to restructuring measures and a rise in German postage and parcel prices.

The German post and logistics group reported a 3% rise in second-quarter sales to 15.5 billion euro (US$17.37 billion) while operating profit rose by 2.9% to 769 million euro, topping the 727 million average forecast from analysts.

The company, which is partly state-owned, said steps taken to improve productivity and an increase in the German postage rate for letters from July 1 would help in the second half of the year, despite weak economic growth.

US rival FedEx Corp warned in June that US-China trade tensions and the non-renewal of its contract with Inc would hurt its fiscal 2020 performance.

Deutsche Post is not immune to slowing momentum in global trade due to the conflict but its broad portfolio helps, finance chief Melanie Kreis told journalists. – Nampa/Reuters