COMPANY NEWS IN BRIEF

SA's MTN Group reports higher earnings

South African mobile operator MTN Group on Wednesday suspended its final dividend as it focuses on faster debt reduction at its holding company even after posting a surge in 2020 earnings.

Reported headline earnings per share (HEPS), the main profit gauge for South African firms, came in at 749 cents for the year ended Dec. 31, compared with 468 cents in the previous year.

Group Chief Executive Officer Ralph Mupita said the company also suspended dividends due to uncertainties around cash upstreaming from Nigeria, the timing of proceeds from its asset realisation programme and Covid-19 impacts.

MTN is in the middle of a R25 billion (US$1.63 billion) divestment plan aimed at simplifying its portfolio over the next three to five years.

"We also want to deleverage the holdco's (holding company) balance sheet faster to create greater financial flexibility for the business to invest in growth opportunities that are arising from the digital acceleration," Mupita said in a media conference call. - Nampa/Reuters

South African arms firm braces for more losses

South Africa's state weapons manufacturer Denel expects to make further losses in its current financial year, it said in a presentation on Wednesday as its acting chair denied the company was trading "recklessly" at a hearing by lawmakers.

Denel makes military equipment for South Africa's armed forces and for export but has struggled for years with liquidity problems. Its latest financial results for the year to the end of March 2020 showed it was insolvent, with liabilities exceeding assets by more than 2 billion rand (US$130.6 million).

It forecast a loss of more than R1.5 billion for the year to end-March 2021 after a R2 billion loss last year.

"We have challenges, but we are not at that stage where Denel is trading recklessly," acting chairwoman Gloria Serobe told parliament's Standing Committee on Public Accounts (SCOPA), responding to questions about the dire state of the company's finances.

"We do have plans that we think are doable," Serobe added, citing long-held plans to get rid of non-core assets. - Nampa/Reuters

Tsingshan to build iron ore mine in Zim

China's Tsingshan Holding Group is set to start developing an iron ore mine and a carbon steel plant in Zimbabwe from May, the African country's information minister said late on Tuesday, three years after the firm first announced the investment deal.

Tsingshan signed a US$1 billion outline agreement with Zimbabwe in June 2018 to build a 2 million tonne-per-annum steel plant and has been carrying out exploration and seeking more mineral concessions.

The Chinese company, through its Zimbabwean subsidiary Afrochine, already produces ferrochrome, which will also be used in the production of steel.

"The ground breaking ceremony for the iron ore mine and carbon steel plant is scheduled for May 2021 in Manhize, Mvuma (south of Harare)" Information Minister Monica Mutsvangwa said in a statement.

China has over the past few years emerged as a major foreign investor in Zimbabwe, with its firms mostly involved in mining of gold, chrome and diamonds and building power stations. - Nampa/Reuters

Adidas pushes online sales

German sportswear company Adidas aims to double its e-commerce sales by 2025 and make its products more sustainable as part of a five-year plan to lift profitability closer to that of rival Nike.

Adidas is targeting online sales of up to 9 billion euros (US$10.7 billion) a year by 2025 with an operating profit margin of 12-14%, up from the 11.3% achieved in 2019 before the coronavirus crisis knocked sales and profitability.

The company has reopened 95% of its stores after coronavirus lockdowns, it said on Wednesday, as it forecast a 2021 sales growth rate in the mid-to-high teens, rising to as much as 30% in greater China, the rest of Asia and Latin America.

While the sporting goods industry has suffered from store closures during the Covid-19 pandemic, it has managed to sell more online as more people have taken up running, hiking and yoga during lockdowns.

Nike, the world's biggest sportswear brand, has said people have logged on to its workout and store apps en masse, driving significantly higher online sales over the past year.-Nampa/Reuters

Volkswagen hikes battery cell demand

Volkswagen requires about 300-gigawatt hours (GWh) worth of battery cells a year by the end of the decade for its ambitious roll out of electric vehicles in Europe, two people familiar with the matter told Reuters.

The supply chain update is part of the world's second-largest carmaker's strategy to raise the share of fully electric vehicles in Europe to more than 70% by 2030 at its core brand, details of which were unveiled last week.

So far, Volkswagen, which sources batteries from LG Chem, Samsung SDI, SK Innovation and CATL, expects annual demand in Europe to be more than 150 GWh from 2025 and to be at a similar level in Asia.

Chief Executive Herbert Diess and Thomas Schmall, Volkswagen's board member in charge of technology, will unveil details of its battery and charging infrastructure strategy during a Power Day scheduled for March 15, the people said.

The fresh target comes as Volkswagen accelerates its push into electric mobility to close a gap with Tesla, efforts that have led the group's preferred stock price to hit its highest level in nearly six years this week. - Nampa/Reuters