Company news in brief

Eskom: Asset sales can't solve problemsSouth African state-run power firm Eskom said on Wednesday that asset sales could not solve its problems and that a bailout or debt relief were preferable, as it flagged a loss before tax of more than R11.2 billion this financial year.Eskom reported a R671 million profit in the six months to the end of September but said its performance in the next six months would be hurt by a wage deal with trade unions and greater maintenance costs.That compares with a R6.3 billion profit in the six months to the end of September 2017 and a full-year loss of R2.3 billion loss for the 2017/18 financial year.Eskom's total debt rose to R419 billion at the end of September, from R367 billion a year earlier. Its cash levels rose from R8.5 billion to R17.3 billion over the same period but are expected to come under pressure in the second half of the 2018/19 financial year.CEO Phakamani Hadebe said options for government support could be a cash injection or moving some of its debt to the government's balance sheet. "Our debt levels have reached certain levels which are no longer sustainable," he said. – Napmpa/ReutersKPMG SA picks outsider as CEOKPMG's South African unit named an outsider, Ignatius Sehoole, as chief executive on Wednesday, as the auditing firm scrabbles to retain clients after being ensnared in political scandals.Sehoole, the current deputy chief executive PwC's domestic unit, will take over from the Nhlamulo Dlomu, who is stepping aside a year after being brought in to restore the company's reputation. Sehoole is expected to start in May.KPMG has been losing clients in the last 18 months after its own internal probe found flaws in the work carried out for the Gupta family, which is alleged to have used their links to former president Jacob Zuma to mass wealth. The Guptas and Zuma have denied any wrongdoing.KPMG South Africa has previously said it was not involved in and did not condone any alleged money laundering activities linked to the Gupta-owned Linkway Trading company.The company's woes deepened after it was revealed in April that its auditor failed to disclose loans from a failed small bank he was auditing, prompting some its biggest clients such as Absa and the government to ditch it. – Nampa/ReutersState pension fund raises stake in MTNA South African state-owned pension fund has raised its stake in mobile phone operator MTN Group to nearly 24%, regulatory filings showed on Wednesday, a bet on the company in the middle of US$10.1 billion dispute with Nigeria.The Public Investment Corporation, which has more than R2 trillion of South African government civil servants' pensions under its custody, had a stake of around 15% in the company before the transaction.The purchase price was not disclosed but shares in MTN have been battered since it disclosed two separate disputes with Nigerian authorities.Nigeria's central bank on Aug. 29 ordered MTN and its lenders to bring US$8.1 billion back into Nigeria that it alleges the company sent abroad in breach of foreign exchange regulations. In addition, MTN faces a separate US$2 billion tax bill from authorities in Nigeria.The stock had fallen around 20% since then. – Nampa/ReutersGold Fields improves severance terms at South DeepGold Fields said on Wednesday it had offered union members striking at its South Deep mine in South Africa an increased severance package to try to resolve the dispute which has halted production.Gold Fields, which employs about 3 600 people in South Africa, said in August it would restructure its South Deep operations and would cut about 1 100 jobs, nearly a third of the workforce, to save money. In response, the National Union of Mineworkers (NUM) went on strike at the mine on Nov.2.South Deep, the company's last South African asset, has lost money over the past five years and Goldfields has been working to mechanise operations in the face of challenging geology 3 kms below the surface.The company said its offer, which expires today, included increasing severance payments by four weeks, or a total of as much as R45 million, funding for skills training and preferential re-employment if positions become available."If the offer is not accepted by Friday then it's difficult to predict how long the strike will continue for," CEO Nick Holland said. – Nampa/ReutersLafargeHolcim sees slower 2019 sales growthLafargeHolcim expects slower sales growth but higher profitability in 2019, the world's largest cement maker said, adding that it is counting on "solid market demand" for its building materials to continue.The French-Swiss company expects full-year sales growth of 3% to 5% next year, a slowdown from the 4% to 6% targeted for this year, after disposals of businesses and currency swings are taken into account.The outlook was made as LafargeHolcim prepared for its first investor day on Wednesday under chief executive Jan Jenisch in the British city of Birmingham, as he focuses on cutting costs, concentrating on certain markets and making small acquisitions.The company's performance in 2018 showed the strategy was working, with the company simpler than before and ahead of its target to save 400 million francs (US$400 million), the executive said.In May, the cement maker announced the closure of its offices in Singapore, Paris and Miami, and the plan to shift its headquarters from Zurich. LafargeHolcim had said it would sell assets worth about 2 billion francs and could also head out of two or three countries. – Nampa/Reuters

Company news in brief

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