Company news in brief

20 February 2020 | Business

Sibanye reports second-half rebound

South African mining company Sibanye-Stillwater reported a near 80% surge in full year earnings yesterday following a rebound in the second half on the back of rising precious metals prices and the inclusion of its Marikana operations.

Strike action had disrupted operations in the first half of 2019 and the diversified miner reported a headline loss for the full year. However, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) jumped 79% to R14.96 billion (US$1 billion).

Group revenue rose 44% year-on-year in 2019 to US$5.043 billion driven by rising metals prices and an improved operating performance, it said.

However, Sibanye reported a headline loss of 40 cents per share for the year ended Dec. 31, 2019, compared with a loss of 1 cent per share in the previous year, weighed down by strike related losses in the first half of the year at its gold operations and a non-recurring costs relating to its convertible bonds.

Sibanye Gold Limited, which owns the Kloof, Driefontein and Beatrix Operations, delisted to become a wholly owned subsidiary of Sibanye Stillwater effective yesterday to create separate legal entities for its gold and PGM portfolios, trading under Sibanye Stillwater Limited.

GPI sells Burger King in SA

Grand Parade Investments (GPI) Ltd said yesterday it is selling the Burger King South Africa franchise and a related burger-making plant to private equity firm ECP Africa Fund for R697 million (US$47 million).

The announcement sent shares in GPI up 9.09% to R3.60, their highest level since Dec. 11.

ECP Africa said that despite a difficult economic climate, it could double the number of Burger King outlets across South Africa in the next five years.

GPI bought the Burger King franchise in 2012, betting on South Africa's lucrative fast-food market, consumer appetite for flame-grilled burgers and their price appeal.

However, South African retailers have been struggling to boost sales as a slowing economy, high unemployment rate and rising fuel costs reduced consumers' spending power. – Nampa/Reuters

Glencore plans leadership shakeup

Glencore will make more changes to its front bench this year, chief executive Ivan Glasenberg said on Tuesday, as the world's largest commodities trader hastens the transition to a new generation of leaders.

Falling commodity prices, multiple corruption and bribery investigations and a large exposure to coal as the global economy grapples with climate change have weighed on Glencore in recent years, adding to pressure for changes at the top.

Glencore reported its first annual net loss since 2015 on Tuesday after taking a US$2.8 billion impairment charge to reflect the closure of its African copper business, which suffered from low cobalt prices, the expiry of licenses at its Chad oil operations and weak demand for coal from Europe.

Overall, the Anglo-Swiss miner reported a net loss of US$404 million for 2019, compared to a profit of US$3.41 billion a year earlier.

Its core earnings or adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of US$11.6 billion beat analysts' estimates of US$11.25 billion. – Nampa/Reuters

Kumba Iron annual earnings rise

South Africa's Kumba Iron Ore on Tuesday posted a rise in annual earnings, underpinned by higher iron ore prices and currency gains from a weaker rand exchange rate to the dollar.

The company, a unit of Anglo American, reported headline earnings per share (HEPS) of R50.88 for the year ended Dec. 31, compared with R30.28 a year earlier.

Total revenue for the year rose 41% to R64.3 billion, compared with R45.7 billion a year earlier.

The miner said its annual revenue was driven by higher ore prices, stronger market premiums and currency gains despite lower sales volumes amid weaker domestic offtake.

Production, however, dropped 2% to 42.4 million tonnes, compared with 43.1 million tonnes in the year-ago period due to the impact from plant maintenance and equipment-related issues in the first half.

The company said it expects to produce between 41.5 million tonnes and 42.5 million tonnes of iron ore in 2020, and declared a final cash dividend of R15.99 per share bringing the total dividend to R46.78 per share. – Nampa/Reuters

HSBC to shed assets, slash jobs

HSBC Holdings said on Tuesday it would shed US$100 billion in assets, slashing the size of its investment bank and revamping its US and European businesses - in a drastic overhaul that will mean 35 000 jobs cut over three years.

The bank, which has long underperformed rivals, is seeking to become leaner and more competitive as it tries to grapple with a swathe of challenges: slowing growth in its major markets, the coronavirus epidemic, Britain's withdrawal from the European Union as well as lower central bank interest rates.

Europe's biggest bank by assets, which makes the bulk of its revenue in Asia, said profit before tax tumbled by a third to US$13.35 billion in 2019, far below the average estimate of US$20.03 billion from brokerages.

That was due to US$7.3 billion in write-offs linked to its global banking and markets and commercial banking business units in Europe.

Seeking to simplify the group's structure, HSBC said it would combine its retail banking and wealth management business unit with global private banking operations to create one of the world's largest wealth management businesses. – Nampa/Reuters

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