Company news in brief

Clicks suspends dividend

South Africa's Clicks Group drugstore chain reported a better-than-expected rise in half-year earnings but warned trading conditions are expected to be extremely tough for the remainder of the financial year due to the coronavirus crisis.

Diluted headline earnings per share (HEPS), the main profit measure in South Africa, for the six months ended Feb. 29 rose to 338 cents from a restated 295.9 cents in the comparable prior period.

Group turnover in the same period grew by 9.9% to R16.9 billion and profit after tax increased by 12.9%.

Clicks said the extent and economic impact of the virus were not known but could be compounded by power cuts when businesses re-open and put pressure on the grid, which remains a risk to retail sales, particularly in the higher-demand winter season.

The group said its online sales grew during the lockdown, but also that it would not pay an interim dividend, in order to preserve cash, and would consider an annual dividend at the end of the financial year. – Nampa/Reuters

Sasol cuts CEO, executives' pay

Sasol Ltd expects a loss on its Lake Charles Chemicals Project (LCCP) this year and will cut the pay of its CEO and other management to protect its balance sheet, the South African petrochemicals maker said yesterday.

CEO Fleetwood Grobler will donate 33% of his salary for three months from May and take a 20% pay cut for five months to December, directors’ fees will be reduced by up to 40%, and executive committee senior leadership and junior management will take salary cuts for 8 months, Sasol said.

"These measures are necessary to help protect the company’s balance sheet and liquidity until at least the end of financial year 2021," Sasol said, citing the impact of the coronavirus outbreak.

The company said it would donate 33% of Grobler's salary for three months to a fund that has been set up by the government to support the fight against Covid-19.

It expects a loss in earnings before interest, taxes, depreciation, and amortisation (EBITDA) from LCCP of US$50-US$100 million for the financial year versus previous guidance of a profit there of up to US$100 million. – Nampa/Reuters

Petra Diamonds seeks debt restructuring

London-listed diamond miner Petra Diamonds is working towards restructuring its US$650 million debt, as the challenges facing an industry assailed by synthetic rivals are complicated by the coronavirus pandemic hitting demand, sources said.

The company, with a small market capitalisation of 19.83 million pounds (US$24.55 million), announced in February it was looking at strategic options in relation to its debt due in 2022 with the help of investment bank Rothschild. It had launched a debt reduction programme last year.

Petra declared a force majeure at the Williamson mine in Tanzania and scaled down operations to a minimum level in South Africa, as diamonds prices are depressed and sales halted by the global coronavirus lockdown.

Investment banks however are increasingly reluctant to extend credit to diamond producers, as inventory is not being sold and defaults are possible, a source added.

The company's share price is headed for a fourth year of losses, having fallen 74% so far in 2020. – Nampa/Reuters

Sibanye Stillwater suspends outlook

Miner Sibanye Stillwater withdrew its operating forecast for 2020 yesterday due to coronavirus-related uncertainties and said it would resume gold and platinum operations in South Africa within the next two weeks.

"Operating outlook is complicated by uncertainty relating to the extent of the Covid-19 restrictions and the rates at which production may resume at the South Africa operations beyond the current lockdown period," the company said. – Nampa/Reuters

Tullow exits Uganda project

Total has agreed to buy Tullow Oil's entire stake in jointly-held onshore oil fields in Uganda for US$575 million, Tullow said yesterday as it strives to raise US$1 billion this year to reduce its US$2.8 billion of debt.

Tullow, founded in the 1980s to tap into African oil and gas, suffered a series of technical difficulties and missed production targets, leading its chief executive to step down late last year.

Now, along with the entire oil industry, it faces unprecedented turmoil in the oil markets as lockdowns to contain the new coronavirus have wiped out demand and the international oil price has lost roughly two thirds of its value since the start of the year.

Tullow's shares have shed around 90% over the last 12 months and its market capitalisation had shrunk to around US$285 million on Wednesday.

Tullow said on Thursday it will receive US$500 million in cash for the Ugandan prospects and US$75 million once a final investment decision is reached on the project. – Nampa/Reuters

Glencore to take Katanga private

Glencore is taking its Toronto-listed Congo unit Katanga Mining private, the subsidiary said on Wednesday, citing limited trading liquidity and the costs of a stock exchange listing as reasons for the decision.

Katanga Mining, which produces copper and cobalt from mines in the southern copper belt of Democratic Republic of Congo, was first listed in August 1997. Glencore owns 99.46% of its shares.

Among the reasons for going private, Katanga cited the "attractive" premium being given to shareholders, commodity price risks, operational risks, financial risks, and the lack of sources of financing without support from Glencore. – Nampa/Reuters