Company news in brief

30 January 2019 | Business

Absa rules out Nigerian acquisition

South African lender Absa will not buy a Nigerian bank, its CEO told Reuters on the sidelines of the World Economic Forum in Davos, clearing up a lingering question over how it will execute its aggressive growth strategy.

Chief executive Maria Ramos said that while Nigeria is a big and exciting banking market - where the World Bank estimates 60 million people did not have a bank account in 2017 - it would build its presence there slowly and organically and did not plan to become a top lender.

"For us to be in the top three or four would mean us going out and acquiring a Nigerian business," she said. "The Nigerian banks are big and expensive and we wouldn't be looking to do that."

Ramos also said Absa's strategy elsewhere in Africa would be centred on organic growth rather than acquisitions.

"To go and acquire something has to make a huge amount of sense, it has to be value-accretive," she said. – Nampa/Reuters

Naspers takes full control of Avito

South Africa's Naspers has taken full control of Russia's largest classified advertising platform Avito after it spent US$1.16 billion to buy the 29.1% it did not already own.

Naspers said the deal, made through its classifieds business OLX Group, implied an enterprise value of about US$3.85 billion and would boost its holding in the company from 70.4% to 99.6%, with Avito's co-founders holding the rest.

Online marketplaces in Russia have grown rapidly in the last few years, offering anything from food delivery and cleaning to private house construction services.

Avito was launched by entrepreneurs Jonas Nordlander and Filip Engelbert in 2007 as Russia's answer to Craigslist and today owns and operates the country's largest online classifieds website Avito.ru.

Naspers, which had US$8.7 billion in cash as of the end of September primarily from the sale of Flipkart and Tencent shares, said the deal was funded by its existing cash resources and closed on Friday. – Nampa/Reuters

Petra Diamonds: Lower prices at flagship mine

Shares of Petra Diamonds Ltd slid as much as 10% on Monday after lower diamond prices at its flagship Cullinan mine and an increase in net debt took the shine off higher half-year revenue.

The company has been trying to keep a lid on debt after heavy investments and a stronger South African rand had burdened the miner, which pays in rands and earns in US dollars.

Petra's net debt jumped to US$557.2 million in the six months to Dec. 31 from US$538.9 million as at Sept. 30. The company was forced to raise US$178 million last May by issuing equity to cut its debt burden.

Rough diamond prices fell to US$96 per carat from US$140 per carat in the previous year at the Cullinan mine, which in 1905 yielded the Cullinan diamond - the largest rough gem diamond ever found and now part of the Crown Jewels of the United Kingdom.

Petra posted an 8% jump in revenue to US$207.1 million, about 10% below RBC forecasts of US$230 million, hurt by lower pricing at Cullinan. The company stuck to its production forecast 3.8 - 4.0 million carats for fiscal 2019. – Nampa/Reuters

East African Breweries' to jumpstart growth

East African Breweries aims to jumpstart growth in sales of bottled beer in Kenya, as its biggest market's economy recovers and the government looks set to hold off on tax increases, its chief executive said on Friday.

The brewer, which is controlled by Britain's Diageo and is known for its Tusker beer, said sales of bottled beer were flat in the first half of the year to December after the government raised excise duty by 5.2%.

Kenya, which contributes 70% of annual revenue, has taxed beer and cigarettes heavily to boost government coffers. The government raised excise duty on beer by 43% at the end of 2015, hitting demand for EABL's beer.

Kenya has one of the highest rates of tax on beer on the continent. Tusker has a recommended retail price of 150 shillings (US$1.49) per bottle, with close to half going to the taxman.

Pretax profit at EABL surged by a third in its first half, driven by a 13% jump in net sales as sales of its low-priced Senator Keg beer in Kenya made a strong recovery after demand was depressed by election jitters in 2017.

Plans to integrate WhatsApp, Instagram and Facebook Messenger

Facebook Inc CEO Mark Zuckerberg is planning to unify the underlying messaging infrastructure of its WhatsApp, Instagram and Facebook Messenger services and incorporate end-to-end encryption to these apps, the New York Times reported on Friday.

The three services will, however, continue as stand alone apps, the report said, citing four people involved in the effort.

Facebook said it is working on making more of its messaging products end-to-end encrypted, and considering ways to make it easier for users to connect across networks.

After the changes, a Facebook user, for instance, will be able send an encrypted message to someone who has only a WhatsApp account, according to the NYT report.

End-to-end encryption protects messages from being viewed by anyone except the participants in the conversation. – Nampa/Reuters

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