AfricaMe-Team, Auteur à Africa M.E.

Steinhoff reports 3 pct drop in earnings per share

7 September 2016 Comments (0) Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa-based retail group Steinhoff reported a 3 percent decline in its earnings per share on Wednesday, weighed down by an increased number of shares and the weaker rand currency.

Steinhoff, which has been seeking to expand abroad with a series of acquisitions, the latest being the offers to buy U.S. bedding retailer Mattress Firm and Britain’s Poundland, said diluted adjusted EPS came in at 29.5 euro cents in the year ended June, down from 30.3 cents the previous year.

Adjusted EPS strips out certain one off, non-trading items and is a required performance measure by the Johannesburg Stock Exchange, where Steinhoff has a secondary listing.

Steinhoff funded its 2014 purchase of Africa’s no-frills clothes retailer Pepkor with cash and shares, while the result was also affected by weaker exchange rates, with the rand depreciating by 17 percent during the period.

Since moving its primary listing to the Frankfurt Stock Exchange in December last year, Steinhoff has been looking to expand its businesses abroad at a time when consumers are turning to cheaper chains and its home market is struggling.

Steinhoff is close to securing an $800 million takeover of British discount retailer Poundland, with shareholders due to vote on the deal later on Wednesday.

Meanwhile its $3.8 billion offer for the United States’ largest bedding retailer Mattress Firm already has the backing of the board and the Texas-based company’s biggest shareholder, JW Childs.

“Steinhoff continues to see opportunities for growth within our key markets in the territories where the group operates,” said Chief Executive Markus Jooste.

(Reporting by Tiisetso Motsoeneng; Editing by Ed Cropley, Greg Mahlich)

China’s gifts to Africa: Government buildings, stadiums

7 September 2016 Comments (0) Business 2

While much of the aid China provides to Africa comes in the form of investment and loans for infrastructure and economic development, the Asian nation has also given the continent dozens of government structures and sports stadiums.

For example, China has promised the government of Zimbabwe $46 million for a new building to house the nation’s parliament. The building will be located in Mount Hampden, about 10 miles outside the capital city of Harare.

Zimbabwe’s Senate and House number a total of 300 members and the legislative bodies have outgrown the current parliament building.

The pledge followed the Forum on China-Africa Cooperation in Johannesburg last December. The Chinese government also agreed to forgive $40 million in Zimbabwean debt to the Asian nation. At the same time, China pledged to invest more than $1 billion in development of a thermal power plant in Zimbabwe.

In return, Zimbabwe agreed to make the Chinese Yuan legal tender. Zimbabwe abandoned its own dollar currency seven years ago after a period of hyperinflation and uses multiple currencies, including the United States dollar and the South African Rand.

Support fosters economic ties

As China seeks to strengthen its economic ties to the continent, support public and government structures has emerged as one facet of the strategy. With its interest in Africa’s minerals and other resources, China has become a major investor and financier of infrastructure projects.

In 2012, China funded a $200 million headquarters in Addis Ababa for the African Union, dubbing it “China’s Gift to Africa.” The building, 100 meters tall, dominates the skyline of the Ethiopian city. Most of the materials and furnishings were imported from China and more than 1,000 construction workers from China and Ethiopia worked on the project.

China also built an opulent presidential office complex for Mozambique, complete with crystal chandeliers and marble interiors. The structure, which opened in 2014, overlooks Maputo Bay. Cost was not disclosed.

China also donated $25 million for a new building to house the offices of the president and vice president in Uganda and provided furnishings from China. The building, next to the Ugandan parliament building, opened in 2011.

In Sierra Leone, China built a new foreign ministry complex and offices for parliament as well as a 100-bed friendship hospital outside Freetown. China also renovated government offices in Zambia.

China conducts “stadium diplomacy”

The Asian nation has also conducted an effort dubbed “stadium diplomacy,” building more than a dozen sports venues on the continent.

They include Mozambique National Stadium which was built to Olympic standards at a cost of $80 million and seats 42,000 spectators; Tanzania National Stadium, also built to Olympic standards and accommodating 60,000 spectators and built with a contribution of more than $33 million from China; and Malawi National Stadium, which can seat 40,000 and cost $70 million.

China also assisted with construction of four stadiums for the 2010 African Cup of Nations competition in Angola. The complex cost an estimated $600 million. For the 2012 African Cup, Equatorial Guinea built two stadiums with Chinese assistance while 2012 co-host Gabon enjoyed a gift from China of a $60 million stadium.

Chinese investment, trade on the rise

The millions of dollars spent on public structures are dwarfed by ongoing Chinese investment in the continent. In December, China pledged to $60 billion to Africa, most of it in the form of loans and export credits.

China said its cumulative direct investment to Africa over 15 years ending in 2014 was $30 billion.

China has become by far Africa’s biggest trading partner, and more than one million Chinese laborers and traders have moved to the continent in the last decade.

Trade between Africa and China was $220 billion in 2014 and was expected to increase to $300 billion in 2015.

The United States and India are also major trading partners with Africa, according to the World Bank. In 2014, China accounted for 15 percent of imports to Africa and 6.5 percent of its exports. The United States represented 5.5 percent of imports and nearly 5 percent of exports. India accounted for 6 percent of imports and more than 8 percent of exports. Africa also imports about 5 percent of its goods from Germany and exports more than 6 percent to the Netherlands and 4.5 percent to Spain.

South Africa’s economy avoids recession as manufacturing, mining grow

6 September 2016 Comments (0) Economy, Latest Updates from Reuters 1

PRETORIA (Reuters) – South Africa’s economy grew by its most in six quarters as the mining and manufacturing sectors reversed sharp contractions due to an uptick in exports, the statistics agency said, ending fears of a recession.

Growth beat market consensus, rising by 3.3 percent in the second quarter of 2016, its fastest quarterly growth since the fourth quarter of 2014, after shrinking by 1.2 percent in the three months to March, Statistics South Africa said on Tuesday.

The currency of Africa’s most industrialised economy extended its gains to 1.3 percent after the growth data was released. The rand traded at 14.1890 per dollar at 1023 GMT versus overnight close of 14.3800.

Economists polled by Reuters had expected a quarter-on-quarter GDP expansion of 2.3 percent while the economy was seen expanding 0.5 percent year-on-year.

Mining led the growth, expanding by 11.8 percent after an 18.1 contraction in the first quarter.

Manufacturing also grew, up 8.1 percent quarter on quarter from 0.6 percent previously.

“The mining and manufacturing were your key drivers for the 3.3 (percent growth) mainly related to exports of platinum and exportation of motor vehicles,” said chief director for national accounts at Stats SA Michael Manamela.

On a year-on-year basis, the economy grew 0.6 percent versus a 0.1 percent contraction in the first quarter, the agency said.

The agency however warned that the jump in quarterly growth was also due to the sharp contraction in the previous quarter, and the more realistic measure was to look at the first six months of 2016, which showed growth at 0.3 percent.

“You should see it in context of that it compares with a very low first growth,” Manamela said.

(Reporting by Mfuneko Toyana; Editing by James Macharia)

South Africa’s AMCU, platinum mines fail to reach wage deal

6 September 2016 Comments (0) Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s biggest platinum mine-workers’ union and the industry have failed to reach a deal on workers’ pay, the union said on Monday, raising the prospect of industrial action in the world’s biggest producer of the white metal.

The Association of Mineworkers and Construction Union (AMCU), which led a crippling five-month strike in 2014, has been in talks with Anglo American Platinum, Impala Platinum and Lonmin since July this year.

(Reporting by Tiisetso Motsoeneng; Editing by Ed Cropley)

Angolan President fires finance minister Manuel

5 September 2016 Comments (0) Africa, Latest Updates from Reuters, Politics Like

LUANDA (Reuters) – Angolan President José Eduardo dos Santos fired Finance Minister Armando Manuel on Monday two months after the government of Africa’s biggest oil producer broke off talks with the IMF over emergency funding.

In a cabinet reshuffle, dos Santos also replaced his agriculture minister and dropped the powerful Chief of Staff in the presidency, Edeltrudes da Costa, who was implicated in a recent land eviction.

A statement said Manuel, who was appointed in 2013 and whose term had been due to run to 2017, would be replaced by capital markets commission head Augusto Archer de Sousa Hose, more commonly known as Archer Mangueira.

Over the last two years, Manuel had presided over an economic slump caused by a sharp drop in oil prices that sapped dollar inflows, hammered the kwanza and prompted heavy government borrowing.

The kwanza slid more than 30 percent against the dollar in 2015, and in January the central bank allowed for another 15 percent weakening to 155 against the dollar.

The currency was bid at 165/dollar on Monday, according to Thomson Reuters data. On the black market, it has been trading as low as 600.

The weaker currency has seen inflation soar to 35 percent from 10 percent a year ago, forcing the central bank to hike interest rates by 675 basis points since June 2015.

However, it said on Monday it had kept its benchmark rate unchanged at 16 percent at its latest policy meeting.

Before his appointment, 53-year-old Mangueira was President of Angola’s Capital Markets Commission, making him a familiar face to foreign investors, and had recently been brought onto the central committee of the ruling MPLA party.

Diplomats said his promotion was not a major surprise, especially in the wake of the government’s decision in late June to end emergency financing talks, supported by Manuel, with the International Monetary Fund (IMF).

Angola’s economic slump has fuelled opposition to dos Santos’ 36-year rule, although the MPLA re-elected him as its leader last month ahead parliamentary elections in 2017.

(Reporting by Herculano Coroado; Writing by Stella Mapenzauswa; Editing by Ed Cropley)

Despite cuts, Big Oil to expand production into the 2020s

5 September 2016 Comments (0) Business, Latest Updates from Reuters Like

By Ron Bousso

LONDON (Reuters) – Never mind the drop in crude prices, huge spending cuts and thousands of job losses – the world’s top oil and gas companies are set to produce more than ever for some time.

While top oil companies struggle with slumping revenues following a more than halving of prices since mid-2014 after years of spectacular growth, their production has persistently grown as projects sanctioned earlier in the decade come on line.

Overall production at the world’s seven biggest oil and gas companies is set to rise by around 9 percent between 2015 and 2018, according to analysts’ estimates.

With an expected recovery in prices, the increased production should boost cash flow and secure generous dividend payouts, which had forced companies to double borrowing throughout the downturn.

“There are a lot of projects coming on stream over the next three years that will support cash flow and ultimately dividend,” Barclays analyst Lydia Rainforth said.

And despite a drop in new project approvals, companies have throughout the downturn cleared a number of mammoth undertakings such as Statoil’s Johan Sverdrop oilfield off Norway and Eni’s Zohr gas development off the Egyptian coast.

Others opted to acquire new production, such as Royal Dutch Shell, which bought smaller rival BG Group for $54 billion this year, and Exxon Mobil through investments in Papua New Guinea and Mozambique.

Shell is expected to see the strongest growth among its peers over the next two years at 8 percent, according to BMO Capital Markets.

Production is unlikely to drop after 2020, and could post modest growth as companies continue to bring projects onstream, albeit at a slower pace, BMO analyst Brendan Warn said.

French oil major Total, for example, plans to clear three major projects by 2018 – the Libra offshore oilfield in Brazil, the Uganda onshore project and the Papua LNG project – that will begin production after 2020.

“We won’t see 5 to 10 percent growth that we’ve seen from companies in recent years. It will be closer to 1 or 2 percent,” Warn said.

SUSTAINABLE

Capital spending, or capex, for the sector is set to drop from a record $220 billion in 2013 to around $140 billion in 2017 before modestly recovering, according to Barclays.

But companies have learnt to do more with the money after slashing expenditure and tens of thousands of jobs, while the cost of services such as rig hiring dropped sharply throughout the downturn.

“2017 is the sweet spot for integrated companies. It took two to three years to adjust to the drop in oil prices, and a lot of the efficiencies introduced in recent years will roll into 2017, when projects kick in and free cash flow will improve,” Rainforth said.

The resilience is mostly due to new gas projects coming on stream as companies shift towards the less polluting hydrocarbon that is expected increasingly to displace oil demand in coming decades.

The slower pace of project development after a decade of rapid growth that was accompanied by soaring costs will help companies, Warn said.

“That is much more sustainable for a major that will reduce the number of large capex projects.”

(Reporting by Ron Bousso; Editing by Dale Hudson)

South Africa’s antitrust body rejects appeal to delay Massmart complaint

2 September 2016 Comments (0) Business, Economy, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South African grocery retailers have lost a bid to delay a hearing into a complaint brought by Massmart that accuses them of anti-competitive behaviour, the antitrust watchdog said on Friday.

Large food retailers Shoprite, Spar, Pick n Pay had sought to delay the hearing into Massmart’s complaint on the grounds there is already a wider investigation into factors that could be distorting competition.

Massmart, a division of Arkansas-based Wal-Mart, lodged the complaint in 2014, saying its expansion into the grocery sector was being hampered by lease arrangements that restrict malls from renting out space to rival food retailers.

Known for its Game chain that mainly sells electronic goods, Massmart has been trying to push into the grocery market since Wal-Mart took a controlling stake in 2011, a move that pits it against rivals that also include upmarket food retailer Woolworths.

The Competition Commission has said exclusive clauses in leasing agreements, which can restrict malls from renting out space to rival food retailers for up to 20 years, could be one of the features preventing more competition.

Its sector-wide investigation, which will also examine competition between small informal foreign-owned shops and local stores popularly known as “spazas”, is expected to be completed by the end of May 2017.

(Reporting by Tiisetso Motsoeneng; editing by David Clarke)

South Africa’s cabinet reappoints Zuma ally as head of national airline

2 September 2016 Comments (0) Economy, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s government has reappointed Dudu Myeni as the chairwoman of South African Airways, the loss-making state-owned airline, it said on Friday.

The cabinet said Myeni, an ally of President Jacob Zuma, was appointed alongside 11 other board members to the board of SAA. The new team will meet the Minister of Finance Pravin Gordhan who will provide direction from a shareholder perspective, it said in a statement.

On Thursday a Finance Ministry source said officials in the department had opposed Myeni’s selection, but had managed to push through some preferred candidates to the cash-strapped airline’s new board.

SAA has been surviving on state-guaranteed loans and has failed to submit financial statements for the past two years, with results for 2015/16 held back after the Treasury refused to grant it 5 billion rand ($343 million) in additional loan guarantees.

Myeni’s reappointment comes two days after asset manager Futuregrowth said it had halted lending to state-owned firms over concerns of political interference in their administration.

In December Zuma denied rumours that he had had an affair with Myeni or that their ties had led to the sacking of then-finance minister Nhlanhla Nene, who had rebuked Myeni for mismanaging a 1 billion-rand deal with Airbus.

Critics say government plans to form a new committee to be supervised by Zuma that would oversee state-owned enterprises like SAA will limit Gordhan’s control over firms.

The rand has slid more than 8 percent against the dollar since Aug. 23, also on renewed fears that Gordhan could be charged over the activities of a surveillance unit set up when he was head of the tax department which police say illegally spied on politicians.

($1 = 14.5933 rand)

(Reporting by TJ Strydom; Writing by Stella Mapenzauswa; Editing by Greg Mahlich)

Rwanda signs $818 mln deal for new international airport

2 September 2016 Comments (0) Africa, Business, Economy, Latest Updates from Reuters Like

By Clement Uwiringiyimana

KIGALI (Reuters) – Rwanda has signed a deal with the African division of Portuguese construction firm Mota-Engil to build an international airport at a cost of $818 million, the company and government officials said.

They said the first phase of the airport, which is part of a push to attract more tourists and boost Rwanda as a conference destination, would cost $418 million and is expected to start in June next year and be completed by December 2018.

Rwanda’s plans for the new Bugesera International Airport date back to 2011 when it first announced it was seeking bids from the private sector to design, build, finance, maintain and operate the airport through a 25-year concession.

“The first phase is for 1.7 million passengers (per year) capacity and it gets all infrastructure associated for $418 million,” Mota-Engil Africa Chief Executive Officer Manuel Antonio Mota told reporters late on Thursday after signing an agreement with government officials.

Rwanda said in a statement that Mota-Engil would operate the airport for 25 years, with an option to extend another 15 years.

When it first sought bids, the government said the first phase would involve building passenger and cargo terminals and a 4.2 km runway to handle large commercial airplanes, while the second phase would be for a second runway and more terminals.

Mota-Engil said the second phase costing $400 million was expected to raise the airport’s handling capacity to 4.5 million passengers per year.

Neither Mota-Engil nor the government said when the second phase would start.

The existing international airport in the capital Kigali has an annual capacity of 1.6 million, according to the Rwanda Civil Aviation Authority, though it has little scope for expansion.

“Bugesera International Airport is coming in at the time when it is badly needed because we all know that the current airport capacity is not matching the growth of our traffic in terms of aircrafts, in terms of passengers,” James Musoni, Rwanda’s minister for infrastructure, said.

The coffee and tea producing country expects its economy to grow 6 percent this year and 2017 and then 6.5 percent in 2018.

(Editing by George Obulutsa and David Clarke)

Kenya sees tourism revenues rising 18 pct to 100 bln shillings

1 September 2016 Comments (0) Business, Economy, Latest Updates from Reuters Like

NAIROBI (Reuters) – Kenya sees earnings from tourism rising to 100 billion shillings ($990 million) in 2016, helped by improved security, infrastructure and marketing, the president’s office said on Wednesday.

The office did not give a comparative figure, but in June, Tourism Minister Najib Balala said Kenya earned 84.6 billion shillings from tourism in 2015.

Tourism, along with tea, horticulture and remittances are Kenya’s leading sources of foreign exchange.

($1 = 101.2500 Kenyan shillings)

(Reporting by George Obulutsa; Editing by Toby Chopra)

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Support fosters economic ties

China conducts “stadium diplomacy”

Chinese investment, trade on the rise

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