Company news in brief

Denel expects state aid in third quarter

South African defence company Denel expects to receive government support in the third quarter as ministers are satisfied with progress in its turnaround plan, the state-owned group said, adding it saw potential to cut more costs.

Denel, a cornerstone of the country's once-mighty defence industry, last month asked for a R2.8 billion cash injection to help it emerge from a financial crisis.

The company, known for its missiles and howitzers, is one of several state firms whose finances were damaged by years of mismanagement during the tenure of former president Jacob Zuma.

Under its turnaround plan, Denel will exit some loss-making businesses and forge partnerships to bolster others.

Denel said it could generate R2 billion from joint venture partnerships, and said it had received about 40 expressions of interest to enter into partnerships or acquire parts of its business.

It added it saw potential to cut costs by a further R500 million. – Nampa/Reuters

HSBC CEO Flint leaves abruptly

HSBC announced the shock departure of chief executive officer John Flint after just 18 months in the role, saying the bank needed a change at the top to address "a challenging global environment".

Flint's exit, which a person familiar with the matter said was a result of differences over execution of his strategy, was disclosed early yesterday along with HSBC's half-yearly results which had been scheduled for release later in the day.

The departure comes as Europe's biggest bank is grappling with headwinds including an escalation of a trade war between China and the United States, an easing monetary policy cycle, unrest in the key Hong Kong market and uncertainty about Brexit.

HSBC's pretax profit for the first six months of 2019 rose to US$12.41 billion from US$10.71 billion in the same period a year earlier, helped by a surge in retail banking and Asia revenues.

The bank flagged the risk to its business from the US-China trade war and the change in the interest rate cycle. – Nampa/Reuters

Fiat: ‘We'll talk alliances, but we can go it alone’

Fiat Chrysler Automobiles chief executive has a message for Renault SA and other would-be partners: We are happy to talk, but we can go it alone.

"Strategically, we have a solid future and clear plans that are being invested in and are underway now," Mike Manley said during a session with reporters the day after the company released better than expected second-quarter results.

Fiat Chrysler is open to re-starting merger negotiations with French automaker Renault, Manley said, but added the French car maker is not the only potential partner to gain scale or plug gaps in Fiat Chrysler's technology or vehicle lineup.

Fiat Chrysler in June withdrew a US$35 billion merger proposal with Renault after French government officials intervened in the talks and sought to delay a decision on the deal.

Fiat Chrysler's Europe, Middle East and Africa operations were marginally profitable in the second quarter and achieved 1.8% profit margin in 2018. Manley has set a goal of 3% operating margins, well short of the 10% margins the company forecast for North America. – Nampa/Reuters

Exxon Mobil profit sinks, Chevron rises

Weaker second-quarter refining and chemicals profits offset surging US shale production at US oil majors Exxon Mobil Corp and Chevron Corp.

Exxon's topped analysts' reduced estimates for the quarter but net fell 21% from a year earlier, its third quarter in a row of weaker year-over-year profit, despite a near doubling in Permian shale oil output.

Chevron earnings rose 26%, in line with forecasts, as it benefited from a one-time, US$1-billion breakup fee from Anadarko Petroleum, which accepted a higher bid from Occidental Petroleum after agreeing to sell itself to Chevron.

Exxon's weaker earnings mirrored those at rivals Royal Dutch Shell and Total SA, and both US companies said natural gas prices and chemical margins fell from a year-earlier.

Shell's profit was its smallest in 30 months, due to weaker chemicals, refining and tumbling natural gas prices. Total also cited weaker natural gas and refining operations for earnings that fell 19% from a year ago. – Nampa/Reuters

Swiss Re's ReAssure buys Quilter

Swiss Re's UK-based ReAssure unit has agreed to buy the life insurance and pensions division of Quilter for 425 million pounds (US$515.19 million), just weeks after the reinsurer halted plans to list the business in London.

The Zurich-based company last month shelved its plans for a US$4.1 billion flotation of ReAssure, citing weak demand from institutional investors.

The purchase helps bulk up Swiss Re's closed book business, which deals in policies that are shut to new customers and where scale is important to generate profit.

It will add over 200 000 customer policies and 12 billion pounds of assets to ReAssure's platform, Swiss Re said.

Wealth manager Quilter, spun out of Anglo-South African insurance company Old Mutual last year, announced the sale as it published its first-half results showing pre-tax losses of 32 million pounds, compared to a profit of 2 million pounds in the first half of 2018, partly due to a one-off charge from the split with Old Mutual. – Nampa/Reuters