Company news in brief

Pepkor cuts profit outlookSouth African clothing and furniture retailer Pepkor Holdings on Friday forecast a steeper fall in annual profit, as the company said it would take a R4.8 billion impairment charge due to the Covid-19 pandemic.Continuing headline earnings per share (HEPS), for the year ended Sept. 30, are now expected to fall 30.5% to 40.5%, to 56.9-66.4 cents per share, from 95.5 cents per share a year earlier, the company said.Pepkor earlier said it expected HEPS to fall by at least 20%. – Nampa/ReutersSAA's bailout does not cover aircraft lessorsDebts to aircraft lessors and some creditors of South African Airways are not covered by a R10.5 billion government bailout, administrators said, raising the prospect that future state budgets will have to keep paying out for SAA.South Africa's government allocated the latest cash injection to state-owned SAA in last month's mid-term budget for a restructuring plan that has been awaiting funding since July.Administrators told Reuters the R10.5 billion was for "initial commitments", while R1.7 billion owed to lessors and R600 million to creditors from before the airline went into administration nearly a year ago would be paid over three years from next year.SAA’s administrators said on Wednesday that the plan was for R2.8 billion of the latest bailout money to go on employee-related payments, R2.7 billion on recapitalising subsidiaries including Mango Airlines and R2 billion on working capital.Another R2.2 billion would repay those who had bought tickets but could not fly and R0.8 billion was for creditors who had funded SAA since it went into administration. – Nampa/ReutersDenel's bailout terms easedSouth Africa's government has eased the terms of a R576 million bailout given to state defence company Denel for the financial year that ends in March 2021, officials told Reuters.Denel, which makes military equipment for South Africa's armed forces and export, has faced a liquidity crisis and struggled to pay full salaries to some staff this year.Denel was allocated R576 million to pay off guaranteed debt, but the company asked the government to allow it to use the outstanding R271 million to support activities that would generate revenues."The minister of finance indeed waived the conditions and allowed Denel to use the funds for any purpose apart from paying off guaranteed debt," said Kgathatso Tlhakudi, director-general of the department of public enterprises (DPE).The national teasury told Reuters that Denel's recapitalisation conditions had been amended, saying the matter had been resolved following discussions between Treasury and DPE's legal teams. – Nampa/ReutersRichemont bets big on ChinaRichemont said a US$1.1 billion partnership with Alibaba to invest in online luxury retailer Farfetch and its new Chinese marketplace would further drive sales in its biggest and fastest growing market.The Swiss luxury group and Chinese e-commerce giant Alibaba said late on Thursday they were investing US$550 million each in the fashion retailer Farfetch and its new venture.Like LVMH, Kering and Hermes, Richemont saw sales improve in the September quarter after a pandemic slump and it is now trying to capitalise on strong Chinese demand for luxury goods and booming online sales.The world's second-biggest luxury group reported sales down just 2% in the latest quarter as Chinese customers turned to shopping domestically and online. Chief financial officer Burkhart Grund said the company had returned to growth in August and trends in October were holding up.The group's jewellery brands Cartier and Van Cleef & Arpels maintained an operating margin above 30% for the half-year, limiting the decline in the group's net profit that fell 82%, but less than expected, to 159 million euro (US$189 million). – Nampa/ReutersWalmart to take US$1 bn hitWalmart Inc, the world's largest retailer, said on Friday it would sell its retail operations in Argentina to South American supermarket chain owner Grupo de NarvÃ¡ez, pulling back as the country grapples with an economic crisisThe US company did not disclose the size of the deal for the operation, where it has over 90 stores, but said it would record about a US$1 billion after-tax, non-cash loss related to the divestiture in its fiscal third quarter next year.Argentina, mired in economic crisis since 2018, has been a tough market for companies in recent years. It is headed for an economic decline of nearly 12% this year, exacerbated by the coronavirus pandemic, which would be the third straight year of recession.The country is also battling a currency crisis, has imposed tough capital controls, and recently emerged from a sovereign default after restructuring over US$100 billion of foreign currency debt with local and international creditors.The economic malaise and uncertainty have hit corporations in the country and led to others pulling back, including LATAM Airlines Group, which said in June it would halt local operations in Argentina. – Nampa/Reuters

Company news in brief

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Republikein 2025-06-18

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