Company news in brief

SAA to cut routes in rescue effort

Plans to cut some of South African Airways' (SAA) domestic and international routes are aimed at making the airline sustainable and free from government funding after restructuring, experts appointed to try to rescue the company said yesterday.

State-owned SAA entered a form of bankruptcy protection in December and is fighting for its survival.

The rescue specialists said on Thursday that SAA would cease flights to Durban, East London and Port Elizabeth from Feb. 29, as well as cutting some international routes, as part of efforts to conserve cash and make the airline more attractive to potential equity partners.

South African president Cyril Ramaphosa said on Friday his government did not agree with plans to cut some of SAA's domestic routes, plunging rescue efforts for the cash-strapped carrier into uncertainty.

Under South African company law, the business rescue team is entitled to take decisions that are deemed necessary to turn a distressed company around, independently of government. In theory it could ignore the government's objections.

SAA is among several South African state entities including power company Eskom that are mired in financial crisis after nearly a decade of mismanagement. – Nampa/Reuters

Uber sees profit by end of 2020

Uber Technologies Inc on Thursday moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020, but the ride-hailing company still expects to lose a total of more than US$1 billion this year.

Uber shares were up 5% in after-hours trading on the news, with chief executive officer Dara Khosrowshahi saying the company would cut costs, aim to generate more repeat-customer business and try to increase use of premium ride services.

He also said Uber would accelerate growth at the company's loss-making food delivery business, Uber Eats, to become the top player in most of its worldwide markets, eventually increasing the segment's margins, currently a drag on Uber earnings.

Uber in November promised to be profitable on an adjusted basis by the end of 2021, excluding expenses for stock-based compensation and other items.

Uber's business model, which depends on contractors transporting passengers and delivering food, also is under threat from regulators around the world as states and cities try to increase driver pay, lower congestion and increase safety. – Nampa/Reuters

Kellogg full-year earnings outlook misses estimates

Breakfast cereal maker Kellogg on Thursday forecast full-year earnings well below market expectations, hurt by the sale of its Keebler cookie business and other assets to Nutella maker Ferrero SpA.

Kellogg, which makes Pringles, Cheez-Its and Pop-Tarts, said it expected adjusted earnings per share to decline by between 3% and 4% in 2020, falling short of the 3.8% increase analysts had expected, according to Refinitiv.

Over the past year, the Battle Creek, Michigan-based company has undergone a restructuring, hoping to revitalise its business attract health-conscious consumers who are not buying the sugary cereals that were once a staple of American breakfast tables.

Kellogg reported a net income attributable to itself of US$145 million, or 42 cents per share, compared with a loss of US$84 million, or 24 cents per share, a year earlier. In the comparative quarter, earnings were hurt by a strong dollar, the costs of an ongoing restructuring and preparations for Brexit.

Kellogg has over the past year amped up spending on promotions and advertising, while making snack-pack versions of classic products that appeal to on-the-go shoppers. – Nampa/Reuters

AB InBev gets relief against sales ban

A tribunal in New Delhi has put on hold a sales ban imposed last year on Anheuser-Busch InBev, an order seen by Reuters showed, allowing the world's largest brewer to resume sales of its beer products in the city for now.

Authorities in New Delhi barred AB InBev in July from selling its beer products for three years over allegations related to the evasion of state taxes, which the company had denied. The ban was later reduced to 18 months.

The company's appeal against the ban was rejected in December by a judge of the Delhi High Court, who directed AB InBev to approach the city tribunal for further relief.

The tribunal issued a one-page order on Feb. 4 saying the ban was being "stayed" as it continues to hear the company's appeal. The order, a copy of which was seen by Reuters on Thursday, did not elaborate on the reasons.

AB InBev continues to argue against the ban saying it must be quashed as the company was not given adequate notice beforehand, according to a source familiar with the matter. The next tribunal appeal hearing is on Feb. 25, the order said. – Nampa/Reuters

Total beats quarterly forecasts

Total beat forecasts on Thursday by keeping net adjusted fourth-quarter profit steady at US$3.2 billion despite low oil prices and fulfilled a pledge to boost dividends, lifting the French energy firm's shares.

"This performance is better than that of our rivals in terms of resisting low oil prices," CEO Patrick Pouyanne told journalists, adding Total was rewarding investors with a 6% increase in the final dividend for 2019 to 0.68 euro per share.

Total bought back US$1.75 billion in shares in 2019 and plans to buy back US$2 billion more in 2020.

Rivals have seen fourth-quarter profits slide on lower prices. BP reported a 26% drop on Tuesday while Royal Dutch Shell last month said its profits had halved.

Total's oil and gas production grew by 9% in 2019 thanks to project start-ups and ramp-ups, while its LNG business doubled, boosting cash flow. – Nampa/Reuters