Company news in brief

Truworths warns on profit

South African retailer Truworths said on Monday that its full-year profit was likely to fall by at least 30% and it was unlikely to pay a dividend, while all options were open for its British footwear business.

Truworths, which sells clothes, shoes and jewellery, has been grappling with tough conditions in both Britain and South Africa, where the economy tipped into recession at the end of 2019, before the coronavirus hit.

It said in a trading update that the coronavirus crisis had dealt a further blow, with headline earnings per share (HEPS), the main profit measure in South Africa, likely to fall by at least 30% this year.

The company said would provide an anticipated range for the fall in HEPS when it has reasonable certainty, although this would likely fall by at least 174 cents per share, versus 580 cents reported a year earlier.

It added that it had extended the term of its borrowing facilities and was taking measures to mitigate the impact of the pandemic by curbing expenditure and preserving cash.

All options, including restructuring, were being considered for British footwear chain Office, which has been struggling with poor consumer demand and Brexit uncertainty. – Nampa/Reuters

SAA administrators can appeal layoff ruling

Administrators at South African Airways (SAA) can appeal a Labour Court ruling ordering them to halt a layoff process, the court said on Monday.

State-owned SAA has been fighting for its survival since entering a form of bankruptcy protection called "business rescue" in December.

The Labour Court's decision earlier this month to side with two trade unions was a blow to the administrators who have said layoffs are necessary to avoid the airline being liquidated.

The administrators sought leave to appeal on the grounds that another court might make a different ruling. They said in a statement they would seek an urgent date for the appeal to be heard.

SAA's administrators are due to publish a business rescue plan by the end of the week, but they have said that in the absence of extra funding their preference is for a structured wind-down of the business. – Nampa/Reuters

Lufthansa, German govt agree rescue package

The German government and Lufthansa, which has been hit hard by the coronavirus pandemic, have reached a preliminary deal on a 9 billion euro (US$9.8 billion) bailout.

The airline has been in talks with Berlin for weeks over aid to help it to cope with what is expected to be a protracted travel slump, but the carrier has been wrangling over how much control to yield in return for support.

The German Finance and Economy Ministries on Monday said Lufthansa was an operationally healthy company before the coronavirus outbreak, was profitable and had good prospects for the future but had got into trouble because of the pandemic.

Lufthansa said that conditions of the deal include the waiver of future dividend payments and limits on management pay. The government will also fill two seats on the supervisory board, one of which is to become a member of the audit committee.

The plan includes Germany taking a 20% stake in Lufthansa, which it plans to sell by the end of 2023. Germany will buy the new shares at the nominal value of 2.56 euro apiece for a total of about 300 million euro. – Nampa/Reuters

Virus could bankrupt German FA

The coronavirus crisis could "potentially threaten" the existence of the German Football Association (DFB), its treasurer Stephan Osnabruegge warned Monday.

"The DFB is in the deepest economic crisis of the recent past," said Osnabruegge at the German FA's virtual extraordinary meeting.

He said "far-reaching cuts" must be made to avoid a worst-case scenario, which would see the DFB receiving 96.5 million euro less than planned this year, resulting in a forecast loss of 77 million euro.

All but 13.8 million euro of that figure would be covered by the governing body's financial reserves.

However, the DFB would then be expected to avoid bankruptcy due to the equity capital it has available. – Nampa/AFP

Renault must join battery project

Renault will have to join a French-German project developing batteries in order to receive a five billion euro government rescue loan, finance minister Bruno Le Maire said Monday.

"Renault needs to make a commitment to become a shareholder in the electric battery alliance. It's one of the subjects that is still being negotiated," Le Maire told BFM television.

The automaker, in which the French state holds a 15% stake, is set to unveil this week a sweeping revamp of its operations as well as its partnership with Nissan and Mitsubishi, in the wake of falling sales and profitability that were amplified by the coronavirus crisis.

Several French production sites could be closed and Le Maire admitted that the government would not require Renault to swear off jobs cuts as a condition for receiving the bailout, saying that "grand proclamations" made in the past had already failed.

Most of Renault's models are already produced outside France in countries with lower production costs, and the company on Friday is to present details of a pledge to cut costs by a further two billion euro. – Nampa/AFP