By Nqobile Dludla

JOHANNESBURG (Reuters) – More workers at South African state-run power utility Eskom joined a strike over pay, their union said on Wednesday, in defiance of a court order preventing the industrial action at the state-run firm.

The company has branded the stoppage by thousands of National Union of Mineworkers (NUM) members which started on Monday illegal because its members are prohibited by law from striking, but said its operations had not been affected so far.

The labour dispute is the latest problem to beset Eskom, which has struggled to meet power demand in Africa’s most industrialised country due to its aging power plants and grid. However, it has managed a year without rolling blackouts that have hurt the economy in the past.

“Our message to the whole nation is just to keep calm. We are handling the situation, currently the situation is under control,” Eskom spokesman Khulu Phasiwe said, adding that he could not divulge the firm’s contingency plans.

Phasiwe said the court order prohibits NUM and two other unions from going on strike as part of the Labour Relations Act, which bars workers deemed to provide an essential service from going on strike.

NUM said on Tuesday that all of its 15,000 members at the utility, or close to a third of Eskom’s workforce, would stop work on Wednesday. [L8N1AQ41Q]

The union’s spokesman Livhuwani Mammburu said its members were on strike in provinces where Eskom runs its biggest plants, including in Mpumalanga province.

“Our members are aware that for them being involved in this strike there are consequences and they are saying they are fighting for the right cause,” said Mammburu.

Asked whether union members will be dismissed if they do go on strike, Phasiwe said workers would not be fired en masse but that each case will be handled on its own merit.

He said talks with the union had not yet collapsed and both parties were due to meet this morning for further discussions.

The utility is offering pay increases of 7 to 9 percent while NUM on Tuesday lowered their wage demand to 8.5 to 10 percent from 12 to 13 percent.

The stoppage at Eskom coincides with a strike over wages by around 15,000 workers in the petrochemical industry that has been going on since last week but has so far not caused any significant fuel shortages.

(Editing by James Macharia and Louise Heavens)

Read more

By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) – Africa’s biggest mobile phone operator MTN Group Ltd cut investor payouts by almost 50 percent as it reported its first-ever half-yearly loss after taking a hit from a hefty regulatory fine in Nigeria.

MTN agreed in June to pay a 330 billion naira ($1.05 billion) fine in a settlement with Nigeria for missing a deadline to cut off unregistered SIM cards from its network.

MTN said the fine, a third of the proposed initial penalty, wiped 10.5 billion rand ($768 million) — 474 cents per share — from headline earnings, South Africa’s main measure of profit, in the first six months of the year.

MTN had in any case been struggling to accelerate subscriber and profit growth as years of price wars and regulatory pressure hit margins and weakening economies squeezed consumer income.

“What you have here is a company that was gung-ho about Africa, where the operating environment has become difficult but they have shot themselves in both feet by losing control of the key markets and not paying attention to regulators,” said one MTN shareholder, who declined to be named.

MTN, held by many investors for its dividend flows, will pay out 250 cents per share for the first half of the year, down nearly 50 percent on a year earlier.

However, the company said full-year dividend could top the previously forecast 700 cents per share if operating conditions materially improve.

INTO THE RED

The headline loss came in at 4.9 billion rand, or 271 cents per share, in the six months. This is compared with headline earnings of almost 12 billion rand, or 654 cents per share, a year earlier.

MTN also said the results were affected by unfavourable currency swings, underperformance in its home market and in Nigeria, where it had to cut off another 4.5 million SIM cards to comply with local registration requirements.

Founded with the South African government’s help after the end of apartheid in 1994, MTN had been seen as one of post-apartheid South Africa’s biggest commercial successes.

It has hired Vodafone European head Rob Shuter to lead its development, aiming to persuade its millions of clients to use their handsets for everything from shopping, paying bills to storing money.

Shuter, who will take over as chief executive by next July, replaces Sifiso Dabengwa who resigned last November after Nigeria imposed the penalty — which will be paid by the Nigerian business in the local currency.

Nigeria has been trying to halt the use of unregistered cards over concerns they are being used for criminal activity, including by Islamist militant group Boko Haram.

Shares in MTN, which had dropped by nearly one-third since October when Nigeria imposed the fine, see-sawed as investors digested the earnings statement.

They rose as much as 2.5 percent shortly after the market opened, before retreating to trade 2.8 percent lower at 129.8 rand as of 0930 GMT.($1 = 315.0000 naira)

($1 = 13.6714 rand)

(Editing by Jane Merriman/Keith Weir)

Read more