Company news in brief

Steinhoff could face more impairmentsSouth African retailer Steinhoff said on Thursday that an investigation by auditors PwC had found that overstatement of its profits may result in additional material impairments, sending its shares down more than 16%.The announcement is the latest setback for the retailer which is fighting to recover from the fallout from accounting irregularities discovered in December.Steinhoff said in a statement: “The PwC feedback substantially aligns with and confirms the irregularities identified by Deloitte.” “It has since emerged that the expected overstatement of profits and the accounting treatment of related parties may also result in material additional impairments of intangible and other assets.”PwC's investigation is looking at the validity and recoverability of certain non-South African assets which were initially estimated to be worth around 6 billion euro (US$7.16 billion), according to Steinhoff.The size of the additional impairments is still being calculated and will be presented in June when Steinhoff publishes half-year results. – Nampa/Reuters ?SAA to get capital injection after plea for cash South Africa has promised another R5 billion capital injection to help its struggling state airline meet urgent financial obligations, the CEO of South African Airways (SAA) said on Thursday. SAA has not generated a profit since 2011 and has already received state guarantees totalling nearly R20 billion. It needs the money to help pay debts and prop up the business as it implements a turnaround plan.The promise of more government cash comes after SAA chief executive Vuyani Jarana told parliament in April that the firm needed the capital injection “now”.The Treasury said it would follow its normal budgetary process, which entails seeking cabinet approval.“The outcome of this process is expected to be finalised in time for the 2018 MTBPS [Medium Term Budget Policy Statement],” the Treasury said. The MTBPS is usually presented to parliament in October.Jarana said that while waiting for the funds, the company would negotiate for some breathing space with lenders.The airline was looking at several measures to cut costs and Jurana said reducing the current workforce of about 10 000 people was “inevitable”. – Nampa/Reuters?ArcelorMittal gives upbeat outlookThe world's largest steelmaker ArcelorMittal said the outlook for 2018 had improved after a sharp pick-up in steel prices and increased iron ore shipments helped it deliver higher-than-expected first-quarter earnings on Friday.The group did not give a specific forecast for its own prospects, but repeated that it saw 2018 global apparent steel consumption, which takes into account inventory changes, growing by between 1.5% and 2.5%.Demand appeared strong, notably in the United States, Europe and Brazil, and the spread between the price of steel and its raw materials was healthy, ArcelorMittal said.First-quarter core profit (EBITDA), the figure most closely watched by analysts, rose 13% year-on-year to US$2.51 billion, above the average US$2.33 billion expected in a Reuters poll of 10 analysts.ArcelorMittal said its average steel selling price was 18.2% higher than in the first quarter of 2017, with shipments up 1.4. For iron ore, of which it mines more than 50 million tonnes a year, shipments rose 5.5%, while prices were down 13.1%. – Nampa/Reuters?Dropbox tops estimates in first results since IPOFile sharing and storage company Dropbox Inc beat Wall Street expectations for quarterly results and topped estimates for paying subscribers in its first financial report as a publicly traded company.The San Francisco-based company said the number of paying subscribers surged 23.7% to 11.5 million at the end of March, topping analysts' average estimate of 11.3 million, according to Thomson Reuters I/B/E/S.The company, which started as a free service to share and store photos, music and other large files, has worked to build up its enterprise software offering.Dropbox reported average revenue per user (ARPU) of US$114.3 in the first quarter, beating analysts' estimate of US$110.The company, which competes with Alphabet Inc's Google, Microsoft Corp and Amazon.com Inc as well as Box Inc, forecast current-quarter revenue in the range of US$328 million and US$331 million. – Nampa/Reuters?Volvo Cars owner picks banks for IPOThe owner of Sweden's Volvo Cars has hired three investment banks for an initial public offering (IPO) this year valuing the company at between US$16-US$30 billion, a source familiar with the matter said on Thursday, confirming an earlier Bloomberg story.China's Zhejiang Geely Holding Group, which bought Volvo Cars in 2010, has picked Citigroup, Goldman Sachs and Morgan Stanley for a listing, the source said, who asked not to be identified because the deliberations are confidential.The potential listing could take place as soon as September this year, the source said, although the ultimate timing will depend on market conditions.A spokeswoman at Volvo Cars said an IPO is an alternative and the decision is up to the owner. She gave no other comments.Volvo Cars had revenues of 210.9 billion crowns (US$24.4 billion) in 2017 with an operating profit of 14.1 billion crowns. – Nampa/Reuters

Company news in brief

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