Company news in brief

27 February 2020 | Business

Rio Tinto posts jump in full-year earnings

Anglo-Australian miner Rio Tinto yesterday posted an 18% rise in 2019 underlying earnings as a surge in iron ore prices last year countered a slight drop in shipments of the steel-making commodity.

The company said it is prepared for the short-term impact to supply chains from the coronavirus outbreak.

The world's top iron ore producer's underlying earnings for the full year ended Dec. 31 rose to US$10.37 billion, from US$8.81 billion a year earlier.

That was slightly below a consensus estimate of US$10.40 billion by 17 analysts compiled by research firm Vuma Financial.

Rio Tinto declared a final dividend of US$2.31 per share, higher than US$1.8 per share in 2018. – Nampa/Reuters

Shoprite reviews African operations

South Africa's Shoprite is reviewing its long-term options in Africa, including an "alternate operating model", group chief executive officer Pieter Engelbrecht told analysts at the retailer's half-year results on Tuesday.

"What we mean by that is yes we're looking at a possible joint venture, a franchise model, different formats. We are reviewing all of the options," he said.

Immediate steps Shoprite has taken include rent reductions in 17 supermarkets, with negotiations of 16 more underway. It has also switched some of the rent and borrowings from US dollars to local currency.

It is also assessing the viability of unprofitable stores and curbing capital allocation for new stores and developments, Engelbrecht added.

Shoprite disappointed the market in early 2019 when it announced its first drop in first-half earnings in a decade due to currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia.

Those devaluations continued in the 26 weeks ended Dec. 29, hitting diluted headline earnings per share (HEPS), which fell by 2.6% to 372.4 cents in the period from 382.4 cents a year earlier.

Sales in rand terms in the group's international operations, comprising 14 African countries, fell by 3.1%. In constant currency terms, sales rose 4.8%. – Nampa/Reuters

Nestle, Starbucks expect alliance to boost growth

Nestle and Starbucks expect new products developed under their coffee alliance will help to increase sales, executives from the two companies told Reuters in an interview this week.

In May 2018, Nestle paid US$7.15 billion for rights to sell Starbucks packaged coffees teas around the world, freeing up Starbucks to focus on its cafe business. The alliance is expected to help Nestle to tackle tough competition in the coffee market from rivals such as JAB Holdings.

"We'll be in 50 markets by the end of this quarter," he said in a joint telephone interview with Starbucks executive John Culver.

The company said on Tuesday it was introducing Starbucks premium soluble coffee globally, starting in over a dozen markets including the UK, China, Japan, Brazil and Mexico.

Rennie said soluble coffee was growing very fast in China, but Japan, Australia, Malaysia, Singapore and the UK were also big soluble markets where the new product should do well. – Nampa/Reuters

Virgin Galactic posts quarterly loss

Billionaire Richard Branson's space tourism company, Virgin Galactic Holdings Inc, said on Tuesday its fourth-quarter net loss widened to US$73 million from a year-ago loss of US$46 million as it reported its first results as a publicly traded company.

The quarterly results, which include one-time transaction and other related costs, come as the company is aiming for a first commercial flight later this year with Branson on board.

Virgin Galactic competes with billionaire-backed ventures such as Blue Origin, founded by Inc CEO Jeff Bezos, to be the first to offer suborbital flights to fare-paying thrill seekers, presaging a new era of civilian space travel that could kick off as soon as this year.

Other players including Elon Musk's SpaceX and Boeing Co have their sights set on higher altitudes like the International Space Station, the moon and eventually Mars.

Some 600 people from 60 countries have paid or put down deposits to fly on one of Virgin's suborbital flights, worth about US$80 million in total collected deposits and US$120 million of potential revenue, the company said. – Nampa/Reuters

PepsiCo adopts stricter, greener rules

US food and drink giant PepsiCo Inc said on Tuesday it would introduce stricter rules for the palm oil used in its goods - including a retrospective ban on working with firms linked to deforestation - and enforce them for its business partners.

In a first for the consumer goods industry, the tighter policies would apply to companies in joint ventures with PepsiCo like Indonesian food maker Indofood, forest experts said.

Palm oil is the world's most widely used edible oil, found in everything from margarine to breakfast cereals and soap.

But its production has faced scrutiny in recent years from green activists and consumers who have blamed it for forest loss, fires and worker exploitation.

Under PepsiCo's new policy, the major international buyer of palm oil has strengthened its commitments to protect, restore and monitor forests and peatlands. – Nampa/Reuters

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