Company news in brief
14 March 2019 | Business
African Bank, a small South African lender which is trying to rebuild after nearly collapsing under the weight of bad debts, said it has appointed Thabo Dloti, former CEO of insurer Liberty Holdings, as its chairman.
Dloti, who is also an ex-CEO of Old Mutual Investment Group and Liberty Holdings' asset management subsidiary Stanlib, will be a permanent replacement for Louis von Zeuner, who left African Bank last July.
African Bank was bailed out with a R10-billion capital injection from a consortium of lenders in 2014, when the South African Reserve Bank stepped in to arrange a rescue after the lender said it would need to raise US$800 million to cover bad loans. The central bank still owns a 50% stake in African Bank.
The lender said Dloti had a record of driving strategy and transformation within blue chip companies. He spearheaded an acquisition-fuelled expansion drive at Liberty but left abruptly two years ago after a clash over that strategy.
Liberty Holdings is owned by big four lender Standard Bank. – Nampa/Reuters
Boeing shares take another hit
Boeing Co's stock took another beating on Tuesday, knocking off more than US$25 billion from the planemaker's market value over the past two days, as more countries lined up to ground its 737 MAX 8 aircraft following Sunday's deadly crash in Ethiopia.
Britain joined China, Malaysia, Singapore, Australia and other countries in banning the 737 MAX planes, squeezing the shares, which had been one of best performing stocks so far this year on the Dow Jones Industrial Average.
The stock fell 7% to US$372 in midday trade on Tuesday, adding to a 5% decline on Monday. The losses set the stock for its biggest two-day percentage drop since June 2009.
At least seven of the 24 analysts covering the stock have reviewed their ratings over the last two days, with two downgrades and one price target cut so far, according to Refinitiv data.
DZ Bank became the first brokerage in nearly two years to place a "sell" rating on the stock, while setting a price target of US$333 - the lowest on Wall Street. – Nampa/Reuters
Safaricom secures deal to use M-Pesa payments
Kenya's Safaricom said on Tuesday it had secured a deal to use its M-Pesa mobile payment service for online shopping on one of Alibaba's platforms, part of a move to expand its most profitable product beyond Kenya.
AliExpress.com, run by Chinese e-commerce giant Alibaba Group, will allow Kenyan shoppers to buy goods on the site using M-Pesa in a matter of weeks.
M-Pesa was launched more than a decade ago to offer Kenyans without bank accounts a network to transfer cash via mobile phones. It now offers a range of payment services, loans and savings to more than 21 million people in Kenya and has been copied abroad.
Safaricom, Kenya's largest operator that is partly owned by South Africa's Vodacom and Britain's Vodafone, said the deal was part of an effort to transform M-Pesa into a global payments platform. M-Pesa has become a major profit driver for Safaricom.
In November the company agreed a deal with Western Union to allow M-Pesa users to send money around the world using their mobile phones. – Nampa/Reuters
VW warns on jobs as margins slip
Volkswagen will cut jobs as it speeds up the rollout of less labour-intensive electric cars and will review its sprawling portfolio of brands as it battles to reverse a slide in profit margins, the German carmaker said on Tuesday.
The company said it planned to launch almost 70 new electric models by 2028, aiming to put itself at the forefront of the industry's shift to zero-emissions driving following the 2015 scandal over its cheating of US diesel emissions tests.
However, it said investments to retool factories, as well as adverse currency moves and a sales slowdown triggered by new emissions certification tests, led to a fall in operating margins at its VW, Skoda, Audi and Porsche marques last year.
The margin at its top-selling VW brand slipped to 3.8% in 2018 from 4.2% in 2017.
The group said it would respond by aligning management pay and bonuses more closely with profitability, cutting manufacturing complexity and reducing headcount by an unspecified amount. – Nampa/Reuters
Adidas says supply chain problems to rein in sales growth
Adidas expects supply chain shortages to hit its sales growth in the first half of the year, particularly in North America, while it hopes to return to growth in Europe, where Nike is challenging the German sportswear brand.
Adidas said currency-neutral sales growth would slow to between 5% and 8% in 2019, from 8% in 2018, with a 1-2% reduction coming from the supply issues that mean it is struggling to meet strong demand for mid-priced apparel.
Fourth-quarter sales rose by a currency-adjusted 5% to 5.234 billion euros (US$5.91 billion), versus average analyst forecasts for 5.2 billion, while attributable net profit came in at 108 million, versus consensus for 88 million. – Nampa/Reuters