Company news in brief

Woolworths sees drop in HY earnings

South Africa's Woolworths said yesterday it expects its earnings to fall by between 15% and 20% for the 26 weeks to Dec. 29, when including the impact of an accounting change.

The retailer said its headline earnings per share (HEPS) - the main profit measure in South Africa that strips out certain once-off items - would likely stand at between 160.3 cents to 170.3 cents, compared to 200.4 cents a year earlier.

Not including the impact of the accounting change, it expects HEPS would be between 7.5% and 12.5% lower. – Nampa/Reuters

SAA has cash to pay January salaries

Specialists appointed to try to turn around struggling South African Airways (SAA) said on Friday that the airline had saved enough cash to pay January salaries.

"The business rescue practitioners and management have taken various actions to ensure that cash is conserved. As a result we have sufficient funds to pay January salaries," business rescue specialists Les Matuson and Siviwe Dongwana said in a statement. – Nampa/Reuters

Eskom new CEO warns against hasty unbundling

The new chief executive of South Africa's power utility Eskom said on Sunday that a plan to split the loss-making company should not be rushed, because risks associated with the process need to be assessed and managed properly.

President Cyril Ramaphosa announced last year that Eskom would be split into units for generation, transmission and distribution, as part of plans to overhaul of South Africa's power sector and open the industry up to more competition.

A government paper showed in October that Pretoria plans to set up a transmission unit within Eskom by the end of March 2020 and complete the legal separation of all three units in 2022.

But in an interview with eNCA television on Sunday, Andre de Ruyter said while Eskom was committed to a restructuring of the power industry as set out in the government paper, the utility wanted to carefully manage risks associated with the process.

"What we are careful of is with a precipitous unbundling to create risks that may end up causing us to have a less stable system," said de Ruyter, who took charge of Eskom on Jan.6.

"For us to rush into full legal separation from day one creates a number of risks - transfer of assets, our lenders will be concerned about assets that they have loaned us money against, there could be capital gains tax events that could cost us a lot of money," he added. – Nampa/Reuters

Barrick’s 'long safari' ends with Tanzania deal

Canada's Barrick Gold Corp signed a deal with Tanzania on Friday in which the government will take stakes in three gold mines, ending a long-running tax dispute and setting a template for negotiations with other firms.

It follows an announcement by the two sides in October in which they agreed to a payment of US$300 million to settle outstanding tax and other disputes, the lifting of an export ban on concentrates and the sharing of future economic benefits from mines.

The company said it had budgeted US$50 million for brown and greenfield exploration in Tanzania in 2020.

Minerals make up the majority of Tanzania's exports and are a key source of foreign exchange for Africa's fourth-biggest gold producer.

The government said it is renegotiating mining agreements with all existing companies to get a minimum 16% stake in each large-scale mine, in accordance with mining laws passed in 2017.

Mining licences from now on will be issued by Tanzania's Mining Commission under the guidance of the president. – Nampa/Reuters

Heineken denies lawsuit threatens takeover

Heineken, the world's second largest brewer, denied on Sunday a Brazilian newspaper report, which said that Coca-Cola Brasil had filed a lawsuit seeking to annul Heineken's 2017 acquisition of Brasil Kirin.

The Valor Economico newspaper said that the filing in a Brazilian court accused the Dutch brewer of designing a sale contract for Brasil Kirin with the intention of breaking the distribution contract the company had with Coca Cola.

However, Heineken said it understood the lawsuit from Coca-Cola Brasil and Brazilian Coke bottlers was not threatening the acquisition, which made it the number two player in the country, the world's third-largest beer market.

Last October, an arbitration tribunal decided Heineken must keep distributing Brasil Kirin's products via the Coca-Cola network until March 2022, keeping the dates in the original contract. Heineken had wanted to sell its new and existing brands via its own distribution system.

Heineken said on Sunday it had become aware of the lawsuit through public sources, but believed the suit was not aimed at annulling its 2017 acquisition of Kirin's business in Japan.

Coca-Cola Brasil and the Brazilian Coke bottlers, it said, were seeking compensation for Heineken's plan to sell the portfolio of beers bought with the Kirin acquisition through its own distribution system.

Coca-Cola did not immediately comment on the matter. – Nampa/Reuters