Company news in brief

SA's Woolworths hit by sluggish sales

Woolworths on Thursday posted slower half-year sales growth and said it expected its headline earnings per share to drop by 5% from 206.3 cents for the same period a year earlier.

It said adjusted HEPS are expected to decline between 7.5% and 12.5% from 223.4 cents.

Woolworths said group sales rose by 1.9% in the 26 weeks ending Dec. 23, 2018, compared with a 2.5% increase in the 26-week period ended Dec. 24, 2017. The retailer had an additional pre-Christmas trading day in 2017, which helped boost the sales.

Woolworths food sales climbed 6.3%, with volume driven by low inflation higher levels of promotions and price investment. Comparable store sales increased by 4.2%.

Sales at the local fashion, beauty and home business declined by 2%, with comparable store sales down 2.4% due to a significantly smaller winter clearance sale in the first quarter, the group said. – Nampa/Reuters

Rio Tinto's iron ore guidance at lower end of forecasts

Global miner Rio Tinto on Friday logged a slight drop in quarterly iron ore production in December and said it expected to produce more iron ore in 2019 in a target range that was at the lower end of analyst expectations.

Mined copper production beat its guidance, mostly due to higher grades and better productivity at Rio Tinto's Kennecott operations in the U.S. state of Utah, the company said in a statement.

Rio's fourth-quarter iron ore production stood at 86.6 million tonnes, down by 1% from the fourth quarter of 2017, due to fewer shipments.

Meanwhile its outlook for iron ore production for this year, was in a range of 338 million tonnes to 350 million tonnes, making a Vuma consensus of 348.8 million tonnes at the top end of its guidance.

The world's No. 2 miner of the steelmaking material declared force majeure on iron ore shipments to some customers following a fire at its Cape Lambert export terminal in Australia earlier this month. – Nampa/Reuters

Safaricom's overdraft service exceeds expectations

Kenya's biggest telecoms operator, Safaricom, notched up one million users for its new overdraft feature on the M-Pesa platform in just eight days, surpassing its CEO's expectations, he said on Thursday.

Started 11 years ago as a service to allow Kenyans without access to the banking network to transfer money via mobile phones, M-Pesa now offers loans and savings in conjunction with local banks, as well as merchant payments services.

Safaricom, part-owned by South Africa's Vodacom and Britain's Vodafone, launched the new overdraft feature called Fuliza on Jan. 7 this year.

M-Pesa has around 20 million active users in Kenya and it has become the principal driver of profit growth for the dominant telecoms provider in East Africa, as revenue from traditional voice and text services has flattened off.

As the market leader with 65% of mobile phone users, or 30 million subscribers, Safaricom has long been dogged by regulatory proposals to clip its wings to boost competition. – Nampa/Reuters

Philips to close its UK factory in 2020

Dutch health technology company Philips said on Thursday it planned to close its only factory in Britain in 2020, with the loss of around 400 jobs, the latest firm to move manufacturing jobs out of Britain.

The move is part of a push by Philips to reduce its large manufacturing sites worldwide to 30 from 50, and a spokesman said the decision had no direct link with Britain's decision to leave the European Union.

However, the company said in a statement that it had to "pro-actively mitigate the potential impact of various ongoing geopolitical challenges, including uncertainties and possible obstructions that may affect its manufacturing operations".

Once a sprawling conglomerate, Philips has transformed itself into a health technology specialist in recent years, shedding its consumer electronics and lighting divisions.

The firm has previously warned that Brexit would put Britain's status as a manufacturing hub at risk. – Nampa/Reuters

Lloyds secures licence as part of Brexit preparations

Lloyds Banking Group has secured a banking licence for its new Berlin-based subsidiary, a source familiar with the matter told Reuters, as part of long-standing plans to Brexit-proof its business with European Union clients.

Until now the lender's Berlin office has run on a standard passporting licence that Lloyds - and other British lenders with customers in the EU - stand to lose when Britain leaves the bloc.

With only 71 days to go until the planned March 29 departure, Britain's banks are forging ahead with plans to ensure they can keep serving customers in the EU if political stalemate over the withdrawal agreement results in Britain crashing out without a deal.

Licences the bank has applied for in Frankfurt and Luxembourg remain outstanding, the source added, but the bank is expected to have all regulatory approvals in place by March 29.

The need for multiple subsidiaries with different licences is due in part to British ring-fencing rules put in place after the 2008 financial crisis, which require depositors' money to be separated from riskier investment banking activities. – Nampa/Reuters