Company news in brief

16 August 2019 | Business

Choppies plans to exit SA market

Botswanan budget retailer Choppies Enterprises said on Wednesday it planned to sell its stores in South Africa as growth stutters and unemployment soars in Africa's most advanced economy.

The company, whose stock is currently suspended from trading on its primary bourse in Botswana as well as on the Johannesburg stock exchange, operates 88 stores in South Africa.

Choppies, which operates in eight African countries, saw its shares plunge by more than 60% last September after announcing a delay to the publication of its financial statements.

The results were delayed after the company's external auditors PricewaterhouseCoopers (PwC) raised concerns with the board in respect of the audit for the year ended 30 June 2018.

South Africa's economy is struggling for momentum. Although retail sales rose in June, data on Wednesday showed, the economy shrank in the first quarter, and data last month showed unemployment at its highest in over a decade.

Tencent cautious after surge in profit

China's Tencent Holdings, the world's largest gaming company by revenue, warned on Wednesday of a difficult economic environment even as it reported a better-than-expected 35% jump in quarterly profit.

Growth in the company's gaming business resumed in the second quarter after a long regulatory freeze in China and its fintech operations also generated sharply higher revenues.

However, Tencent saw a slowdown in online advertising revenue growth amid a slowing Chinese economy and Sino-US trade tensions, and expects conditions to remain tough.

Tencent made 24.14 billion yuan (US$3.4 billion) in net profit for the April-June quarter, beating an average estimate of 20.74 billion yuan from 13 analysts polled by Refinitiv.

The social media and gaming giant is restructuring in an attempt to find new revenue sources as its consumer business comes under pressure from slowing Chinese economic growth amid the Sino-US trade war. – Nampa/Reuters

Prudential to split by year-end

Britain's biggest insurer Prudential will complete a planned break-up of the company by the end of the year, with its UK-focused fund and insurance business set to list as M&G Plc.

The Asia and US-focused rump of the company will continue to trade as Prudential and be listed in the UK, but will be subject to the regulator in Hong Kong - where Prudential said it was "carefully monitoring" current violent protests in the city.

"We expect to complete the demerger of M&GPrudential in the fourth quarter of 2019, and preparations are complete for Prudential Plc's move to group-wide supervision by the Hong Kong Insurance Authority," chief executive Mike Wells said in a statement.

Prudential said last year it planned to split into two companies, a route followed by insurance and asset management peers including Old Mutual and Standard Life Aberdeen.

The split will enable the part of the group focused on Asia and the United States to be regulated in Hong Kong, where capital rules are considered less onerous. – Nampa/Reuters

Carlsberg H1 sales boosted by Asia

Carlsberg reported a 6.5% rise in half-year sales yesterday, as the Danish brewer sold more expensive beer and its operating margins improved despite continued challenges in Russia.

Sales in the first six months of the year came in at 32.99 billion Danish crowns (US$4.9 billion), the company said.

The brewer posted improved earnings but saw declining sales in Russia, its key market, due to tough competition and price hikes at the beginning of the year leading to a loss of market share. Total volume in Russia declined by 3%, the company said.

Asia, the brewer's fastest-growing market, delivered organic net revenue growth of 15%, lifted by 8.5% volume growth and increased sales of premium brands, even though the Chinese market declined slightly, the company said.

Carlsberg has shifted its focus from cost-cutting to revenue growth, especially by selling more of its pricier brands. – Nampa/Reuters

Lenovo warns of price hikes

China's Lenovo Group, the world's largest PC maker, warned it will have to raise product prices if US tariffs increase, sending its shares tumbling 6.5% to two-month lows.

Lenovo's warning amid mounting business uncertainty due to the US-China trade war cast doubt on its sales outlook and took the shine off forecast-beating quarterly results where robust PC sales helped the company more than double its profit.

The global PC market grew 1.5% in the June quarter after falling for two consecutive quarters, as threats of increased US tariffs on Chinese goods prompted some manufacturers to frontload shipments, industry analysts said.

Lenovo emerged as the biggest winner of the global PC market's surprise rebound in the second quarter. Citing industry data, the company said it had a record 25.1% market share in the quarter.

Lenovo said it was the fastest growing PC maker among the top five manufacturers and its improved product mix also helped the business' pre-tax profit margin rise to 5.4%, the highest margin ever attained in a fiscal first quarter. – Nampa/Reuters

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