Company news in brief

03 May 2021 | Business

SAA exits administration after 17 months

South Africa's struggling national airline South African Airways (SAA) on Friday exited a local form of bankruptcy protection called business rescue after roughly 17 months.

Its administrators said in a statement that they had filed a notice of "substantial implementation" of a business rescue plan with South Africa's Companies and Intellectual Property Commission.

That meant they had "effectively discharged the business rescue and handed over the operations of SAA back to its board and executive team", adding SAA was now solvent.

The Department of Public Enterprises (DPE), the ministry responsible for SAA, said the government was in the final stages of negotiations with a preferred equity partner for SAA.

"A purchase and sale agreement should be concluded in the next few weeks. This will enable capital, and much-needed technical and commercial expertise to be brought in to ensure a competitive flag carrier emerges," it said in a statement. – Nampa/Reuters

Steinhoff could consider raising equity

South African conglomerate Steinhoff International Holdings N.V. could consider an equity issue, its CEO said on Friday, as the retailer looks to reduce its debt and financing costs.

At an annual shareholder meeting, chief executive officer Louis du Preez was asked whether the company would consider an equity issue once it has settled about 90 separate legal claims against it following a 2017 accounting scandal.

"One of the options that we will potentially look at, there are many options, is potentially an equity raise. Obviously no decision has been made in that regard," he told shareholders, without elaborating on what the funds might be used for.

The furniture and clothing retailer is preparing to meet the costs of a US$1 billion global lawsuit settlement plan by selling some of its majority-owned African subsidiary's shares, among other steps.

South Africa-headquartered and Netherlands-registered Steinhoff has been selling off assets and planning to list its Pepco Group discount retailer business to reduce debt and financing costs. – Nampa/Reuters

Eskom, unions to start key wage talks

South African state utility Eskom will start a fresh round of wage negotiations with trade unions this week, it said on Friday, warning any disputes could impact its ability to supply electricity.

Eskom struggles to power Africa's most industrialised nation because of repeated faults at its ailing coal-fired power stations and is choking under more than R460 billion of debt.

The last round of negotiations in 2018 led to power outages after workers reacted angrily to Eskom's initial refusal to hike wages and protested. The company later offered above-inflation increases, and a three-year agreement was signed.

The National Union of Mineworkers (NUM) is demanding a salary increase of 15% in the 2021/22 financial year but would also consider a multi-year agreement, the National Union of Metal Workers of South Africa (NUMSA) wants a one-year 15% salary increase and Solidarity is seeking a 9.5% annual increase over multiple years. Inflation is currently around 3%.

Unions argue Eskom's woes are chiefly linked to corruption and mismanagement over many years, and that workers should not lose out as a result. – Nampa/Reuters

Twitter may struggle to replicate bumper growth

Twitter Inc will struggle to replicate a bumper 2020 dominated by the US political battles, civil unrest and the Covid-19 crisis as people venture out following vaccine rollouts, Wall Street analysts said on Friday.

Shares sank more than 12% on Friday after the social media company reported first-quarter revenue and user numbers mostly in line with analyst estimates and warned the current quarter could be its worse as it eyed a weaker 2021.

"The company's weak future guidance suggests that repeating this performance will be extremely difficult," said Haris Anwar, senior analyst at, adding that more people will look to engage in offline activities as the vaccine rollouts pick up.

Although other tech companies have warned of a drop in users this year, they are still upbeat on ad spending as marketers try to target consumers eager to spend and travel after being locked indoors for over a year.

"Twitter doesn't seem well positioned to actually capture the most dynamic part of the digital advertising economy as they lack both sufficient scale of users and the first party data signals that attract performance based marketers," said Michael Nathanson, senior research analyst at MoffetNathanson LLC. – Nampa/Reuters

Exxon tops earnings estimates

Exxon Mobil Corp on Friday topped Wall Street quarterly earnings estimates with its first profit in five quarters, boosted by higher oil prices and strong chemicals margins.

Earnings from Exxon and rivals this year have been rising with crude oil prices, up by a third this year, as a global oil surplus from the pandemic drains and fuel demand recovers. The swing to a profit comes as European rivals also posted results that exceeded pre-pandemic levels.

Net income was US$2.73 billion, or 64 cents per share, in the first quarter, compared with a loss of US$610 million, or 14 cents per share, a year earlier.

Adjusted earnings of 65 cents per share beat analyst expectations of 59 cents, according to Refinitiv IBES data.

Exxon's deep cost cutting also boosted earnings. Exxon's capital spending fell to US$3.1 billion, the lowest in nearly two decades. Expense cuts helped lift cash flow to US$9.3 billion, the highest since 2018. – Nampa/Reuters

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