Company news in brief
20 May 2020 | Business
South African retailer Massmart said on Monday sales in the 19 weeks to May 10 fell 11.9%, hit by a five-week coronavirus lockdown that prevented the company from selling most of its general merchandise, home improvement and liquor products.
Group sales for the 19 weeks ended May 10, when restrictions were partially lifted, fell to R28.2 billion compared with the same period last year, Massmart, majority owned by Walmart said in a statement.
Comparable store sales were 12.1% lower than last year, with comparable sales from South African stores falling 13.2%. Sales in the rest of Africa edged up 1.3%.
In the 2019 financial year, general merchandise sales contributed 26% to overall sales, liquor 15% and home improvement 15%, Massmart said.
The owner of Makro and Game retail brands, which sell a range of products, including electronics and appliances, houseware, camping and outdoor equipment, was under pressure before the coronavirus hit South Africa as consumers cut back on discretionary spending on items such as appliances. – Nampa/Reuters
SA airports operator seeks state guarantees
South African airports operator ACSA needs treasury support to finance up to R11 billion of new debt by 2025, the state-owned company said on Monday.
Since late March when South Africa declared a state of disaster to contain the new coronavirus, major domestic airports such as the continent's busiest OR Tambo in Johannesburg have closed, knocking revenue at Airports Company SA (ACSA).
The operator, which also holds concessions at Sao Paulo's Guarulhos International Airport and Chhatrapati Shivaji International Airport in Mumbai, said about R3 billion in guarantees would be required over the next three years.
Between 2021 and 2023 its capital expenditure budget is seen at R17.9 billion as it develops major projects, such as a new runway and terminal at Cape Town airport, ACSA said.
In March ratings agency Moody's downgraded ACSA to Ba1 from Baa3 with a negative outlook as expected passenger traffic was seen falling by at least 30% in the financial year to March 2021. – Nampa/Reuters
Growthpoint provides rent relief
South Africa's Growthpoint Properties said on Monday it had provided rent relief to 1 494 small, medium and micro enterprises (SMMEs) hit by a lockdown to contain the coronavirus pandemic.
The lockdown prompted property owners and tenants to work together, under government guidelines, to defer rent payments and find other solutions that allow shops, businesses and landlords to ride out the shutdown, which was partially lifted on May 1.
A halt in payments, however, has raised questions over whether landlords will be able to meet their own debt commitments.
Growthpoint - which owns the V&A Waterfront, home to several corporate head offices, industries, hotels, shops and restaurants - is still finalising rent relief for medium, large and listed tenants for April 2020, it said in a statement.
In April, excluding the V&A, it provided R99.2 million of rent relief for South African retail, office, industrial and healthcare tenants, while in May it provided R100.8 million in relief. – Nampa/Reuters
ArcelorMittal locks down Liberia site
The world's largest steelmaker ArcelorMittal said Monday that it will lock down its concession near the Liberian port city of Buchanan for two weeks, after discovering several coronavirus cases there.
Residents in the concession area - which includes housing and office complexes - will be required to stay in their homes throughout the period, the firm said.
Non-essential staff will also no longer be able to travel into the area for work.
ArcelorMittal employs some 2 300 people in the West African state and ships iron ore mined in the north through the port of Buchanan.
In a statement on Monday, ArcelorMittal said that an initial coronavirus case in its Buchanan concession area was discovered on May 14, followed by "a number of additional positive Covid-19 cases" on May 16. – Nampa/AFP
Uber to focus on core rides
Uber Technologies Inc will concentrate on its core businesses in ride-hailing and food delivery and cut 23% of its workforce in an attempt to become profitable despite the coronavirus pandemic, chief executive officer Dara Khosrowshahi said in an email to employees on Monday.
Uber will cut a total of 6 700 jobs, including the 3 700 it had announced earlier this month, Khosrowshahi said, adding that the company plans to reduce investments in several "non-core projects."
In a regulatory filing on Monday, Uber said the layoffs and restructuring measures will result in one-time, mostly cash-based charges of between US$210 million and US$260 million in the second quarter. Overall, the measures are expected to generate US$1 billion in annual cost savings compared with pre-pandemic budget plans.
Uber employed 28 600 people before the pandemic crippled its business, according to a regulatory filing at the end of the first quarter.
Smaller US rival Lyft Inc said late last month it would cut about 17% of its workforce. – Nampa/Reuters