06 February 2019 | Business
South Africa's struggling power firm Eskom expects to make a wider R20 billion loss in the current financial year and wants steeper tariff hikes than it previously sought, its chief financial officer said on Monday.
The chief executive also said the government should consider injecting extra capital into state-owned Eskom to help it cope with what he said were low electricity tariffs.
Chief financial officer Calib Cassim said the larger forecast loss would be due to higher-than-anticipated power plant maintenance costs and increased use of diesel and gas, which is typically more costly than coal for generation.
Cassim said Eskom was now requesting electricity tariff hikes of 17.1% in 2019/20, 15.4% in 2020/21 and 15.5% in 2021/22, steeper than a previous application for increases of 15.0% in each of those three years.
Eskom said the new request was based on changes to its sales forecasts and production plans, arguing that significant time had elapsed since it made its initial request. If granted the revised tariff hikes, Eskom would still turn a profit only in 2022, Cassim said. – Nampa/Reuters
BP's 2018 profit doubles as output soars
BP's profit doubled to US$12.7 billion in 2018, driven by strong growth in oil and gas output following the acquisition of a large portfolio of US shale assets.
The company's debt rose however, and the pace of its share buyback scheme slowed in the last quarter as it completed the US$10.5 billion BHP acquisition.
Rivals Royal Dutch Shell, Exxon Mobil and Chevron all reported stronger-than-forecast earnings last week driven by higher production in US shale basins where oil Majors have invested billions in recent years.
For the year, BP's profit rose to US$12.7 billion, double the previous year's US$6.17 billion. Analysts expected 2018 profits of US$11.88 billion.
BP's production rose in 2018 to 3.7 million barrels of oil equivalent per day after it completed the acquisition of BHP's onshore US shale portfolio and thanks to the start up of new fields including the 120 000 barrel per day Clair Ridge project in the North Sea. – Nampa/Reuters
VEON aims to buy out Egypt's Global Telecom
Telecoms operator VEON Ltd said yesterday it intends to offer 5.30 Egyptian pounds (US$0.3005) per share for the 42.3% of Cairo-listed Global Telecom Holding it does not already own.
The offer for the stake in Global, formerly known as Orascom, represents a 20% premium to its closing price on Monday and is worth $600 million.
VEON, based in Amsterdam, operates telecommunications companies in Russia and in developing countries in Asia and North Africa. It holds a 55.6% stake in Global, which operates the Djezzy network in Algeria, Mobilink in Pakistan and Sheba Telecom in Bangladesh.
Veon said in a statement it has not yet submitted the offer to Egyptian financial authorities and it would not comment further. It called off a previous attempt to buy out Global's assets in October. – Nampa/Reuters
Aeroflot warns fuel prices to cost it US$732 mln
Aeroflot estimates rising fuel prices will cost it 48 billion roubles (US$732.37 million) for 2018, Russia's largest airline said on Monday.
Fuel prices have risen at Russian airports along with global oil prices since mid-2017, peaking in the summer.
Aeroflot's standalone net profit under local accounting rules plunged 10-fold to 2.796 billion roubles, while fuel expenses surged by 41.75 billion roubles, or 47.7%, the airline said.
The Russian Association for Air Transport Operators, which unites several major Russian carriers, estimated last year that rising fuel prices will cost Russian airlines 75-80 billion roubles in additional spending. – Nampa/Reuters
Brazilian court shutters Vale tailings dams
Vale SA said on Monday that a Brazilian state court has ordered it to stop using eight tailings dams in the wake of a disaster last month that likely killed more than 300 people, a step that will crimp nearly 9% of the company's annual iron ore output.
The move is the first step by Brazilian officials to limit production by the world's largest iron ore miner since the disaster, which has sparked a global outcry over common mining practices that many now are decrying as unsafe.
With 134 people confirmed dead and another 199 still missing, according to the latest tally on Monday, the Brumadinho dam burst could be Brazil's deadliest mine disaster on record.
The move is not expected to affect Vale's overall production as it already produces an excess of the market's current needs. Still, analysts expect it to have a ripple effect.
"This is likely to unnerve iron ore markets further," analyst at RBC Capital Markets wrote in a note to clients. – Nampa/Reuters