Company news in brief

05 February 2019 | Business

Eskom narrows funding gap with loan

South Africa's struggling state power firm Eskom moved a step closer to narrowing a funding gap for the financial year which ends in March by agreeing a R15 billion loan with a local and international banks.

Eskom is vital to the health of Africa's most industrialised economy as it supplies more than 90% of its power, but it is drowning in around R420 billion of debt.

The government-guaranteed loan comes at a time when president Cyril Ramaphosa is trying to turn around Eskom's finances.

Eskom now only needs to secure around R5 billion of funds by the end of March. Eskom said it had already secured 30% of its funding needs for the 2019/20 financial year.

Panasonic cuts profit outlook

Japan's Panasonic Corp reported a 19% drop in third-quarter operating profit and cut its full-year earnings outlook, citing slower demand for home appliances and factory automation equipment in China amid an escalating Sino-US trade war.

The electronics company posted on Monday an operating profit of 97.6 billion yen (US$889.05 million) for the October-December quarter, down from 120.1 billion yen a year ago. That was far below the average 122.35 billion yen estimate of eight analysts, according to Refinitiv data.

Panasonic cut its operating profit forecast for the year ending March to 385 billion yen from 425 billion yen. The outlook compared with the 420.25 billion yen average of 18 analyst estimates, according to Refinitiv data.

A bright spot in the otherwise bleak earnings is that Panasonic's energy division, which includes the battery business with US electric car maker Tesla Inc, posted an operating profit of 16.5 billion yen, its first profit in three quarters.

Panasonic, the exclusive battery cell supplier for Tesla's current production models, saw its profits squeezed early last year by the US EV maker's initial production delays for the mass-market Model 3 sedan.

While Tesla's chief executive Elon Musk has said he sees higher demand for the Model 3, analysts are now concerned demand in the United States for both the mid-range and long-range versions has largely been exhausted. – Nampa/Reuters

Exxon Mobil profit tops estimates

Exxon Mobil Corp on Friday reported a quarterly profit that topped analysts' estimates, pushing its shares up as oil and natural gas output rose slightly on a year-over-year basis.

The company's fourth-quarter net income fell to US$6 billion, or US$1.41 a share, from US$8.38 billion a year ago. But earnings excluding the impacts of tax reform and impairments rose to US$6.4 billion from US$3.73 billion a year ago.

Analysts had forecast a US$1.08 a share profit excluding one-time items, according to data from Refinitiv.

Exxon's oil equivalent production rose to just over 4 million barrels per day, up from 3.9 million bpd in the same period the year prior. The company said its output in the Permian Basin, the largest US shale basin, rose 90% over a year ago.

Exxon is not planning share buybacks this quarter, though, which makes it the only international oil company "not currently repurchasing shares", analysts with Simmons Energy said in a client note. – Nampa/Reuters

Toyota, Fiat report fall in US auto sales

Toyota Motor Corp on Friday reported a 6.6% fall in US vehicle sales for January, hurt by lower demand for its Camry and Prius cars.

The No.3 automaker in the United States by sales said it sold 156 021 vehicles in January, down from 167 056 vehicles a year earlier. Camry sales fell 3.4%, while Prius sales slumped 57%, the company said.

Auto industry consultants J.D. Power and LMC Automotive forecast January auto sales to decline about 1% from the same month in 2018, partly due to uncertainty over the recent government shutdown.

The auto consultants also forecast total light vehicle sales this year to fall 1.9 percent to about 17 million units, compared with 2018.

However, major automakers are bullish about 2019 sales even as economists warned that rising interest rates may discourage consumers from buying cars this year. – Nampa/Reuters

Lufthansa passenger compensation cost 500 mln euros

Lufthansa spent 500 million euros (US$573 million) on compensating passengers for flight delays and cancellations last year, a senior company figure said on Friday.

A Lufthansa spokesman could not confirm the cost cited by Thorsten Lange, the German airline's head of fuel purchasing, at a Platts oil product conference.

However, the group's bill for such problems had more than doubled to 350 million euros in the first nine months of the year, the spokesman added. The figure for the full year is due to be published next month.

Lufthansa struggled last year like rivals to cope with Europe's rising demand for air travel.

Germany's largest airline, which owns budget carrier Eurowings, also had problems integrating 77 aeroplanes it took over from bankrupt domestic rival Air Berlin. – Nampa/Reuters

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