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South African construction firms to oppose roads agency’s $50 million claim

10 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African construction firms Murray & Roberts and Basil Read said on Tuesday they will oppose damages claims by national roads agency Sanral for anti-competitive behaviour flagged by antitrust authorities last year.

Sanral said on Monday it had approached the court to claim total damages of as much as 760 million rand ($50 million) from Murray & Roberts and Basil Read as well as Concor, Wilson Bayly Holmes-Ovcon, Group Five, Stefanutti Stocks and Raubex.

“The agency argues that it suffered damages and overcharges as a result of the companies’ collusive conduct,” Sanral said.

The biggest chunk of the claims is for work done on freeways in Gauteng, South Africa’s wealthiest and most populous province, but relief is also sought for conduct in other parts of the country, Sanral said.

Murray & Roberts, which merged with Concor in 2011, told Reuters it intends to dispute the damages claims and will keep stakeholders informed on its progress.

Basil Read spokesperson Andiswa Ndoni confirmed that Sanral has filed a civil suit against the firm.

“The claim is for 84 million rand, on a joint and several liability with two other construction companies. Basil Read has filed a notice of intention to defend the matter,” said Ndoni.

The other firms could not be reached for comment.

($1 = 15.2343 rand)

 

(Reporting by TJ Strydom; Editing by James Macharia)

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South Africa to add 100 MW solar power to national grid in 2018

10 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – French group Engie has signed a 20-year power purchase deal with South Africa’s state-owned utility Eskom to connect 100 megawatts (MW) of solar power onto the national grid in 2018 from its Kathu Solar plant.

Eskom, which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online.

With year-round sunshine and thousands of miles of windswept coast in South Africa, investors are warming to the renewable energy potential, with 66 projects completed or underway since the government launched a first bid round four years ago.

Construction of the Kathu Solar Park, situated in the Northern Cape Province, is expected to begin shortly, Engie said in a statement.

Other investors include South Africa’s Investec Bank, state pension fund Public Investment Corporation, SIOC Community Development Trust and Lereko Metier.

The project is funded by a mix of debt and equity. The debt is funded from a club of South African banks, namely Rand Merchant Bank, Nedbank Capital, ABSA Capital, Investec and the Development Bank of South Africa.

Engie owns and operates two thermal power peaking plants, the 670 MW Avon plant, which is under construction, and the 335 MW Dedisa plant that is already in operation.

 

(Reporting by Nqobile Dludla; Editing by James Macharia and Susan Thomas)

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South Africa’s AngloGold Ashanti posts free cash flow in Q1

9 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – AngloGold Ashanti Ltd posted a free cash flow in its first quarter compared with an outflow last year due to cost and debt cuts, Africa’s biggest bullion producer said on Monday.

“We generated significant free cash flow again despite the lower gold price, which shows the continued success of our self-help measures to reduce debt by improving margins,” said Srinivasan Venkatakrishnan, chief executive officer, AngloGold Ashanti.

The company, which has 17 mines in nine countries, said free cash flow in three months to March-end reached $70 million from an outflow of $40 million in the first quarter of 2015.

Adjusted gross profit edged up to $210 million at the end of March from $209 million in the same period last year.

AngloGold said it cut debt and costs during the quarter, resulting in cash flow, benefiting weaker local currencies against the dollar.

South African miners sell their commodities in dollars while paying costs in rand, boosting margins when the exchange rate weakens against the greenback.

Production in the quarter fell 7 percent to 861,000 ounces compared with the same period last year, due to planned reductions from Obuasi, Tropicana and Morila mines, and unplanned output drop in Kibali joint venture.

 

(Reporting by Zandi Shabalala; Editing by Sherry Jacob-Phillips)

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Ambitious Mall of Africa opens to crowds in South Africa

7 May 2016 Comments (0) Non classé

Africa’s largest and most high-tech shopping mall has opened with much fanfare in South Africa’s Waterfall city.

Shopping malls are not something new to Africa and they most certainly are not a novelty in South Africa, a nation that boasts the 6th highest number of shopping malls in the world. With just shy of 2,000 malls, in a country where a large number of residents have very limited finances, a new super mall seems ambitious.

Ambitious is not an adjective that the developers would feel reticent to accept however, as everything about the new Mall of Africa aims to set it apart from the competition.

Three and a half years of development

The Mall of Africa may have just opened its doors, but the construction of the bold plans laid out by Atterbury Property Developments began back in October 2012. Atterbury have been responsible for the construction of a project that is 80% owned by another firm, Attacq Limited which has the commercial development rights to Waterfall City. The goal is to build a technologically advanced and prosperous city of which Mall of Africa will be the focal point.

The numbers reflect the determination to create something grand for the Waterfall precinct in the Midrand area. The $340 million development consists of 550,000 square meters that house over 300 shops, a host of restaurants and a cinema complex, all under one roof.

It is not simply a matter of grand scales that defines Mall of Africa as a leap forward in terms of its design. The mall hosts unique attractions, such as a large outdoor play area for children that features an interactive musical fountain. Moreover, in keeping with the move towards greater sustainability in business, the mall features several environmentally sound designs. The roof holds solar panels that will provide 4.8MVA of green energy and its toilet facilities will use gray water harvesting to provide irrigation for the surrounding complex.

mall of africa

Keeping up with consumer demands

In a time where many people are shopping online and in which a day out is deemed incomplete without the ubiquitous “selfie” or status update, Mall of Africa’s developers were very aware of the need to create a destination for today’s world.

Perhaps the most challenging installation was ensuring that all 130,000 square meters of the retail space in the huge 550,000 square meter complex provided strong, fast Wi-Fi. For this, the developers turned to VAST Networks and Ruckus Wi-Fi, which were able to roll out the largest Wi-Fi installation ever seen in Africa. CEO of VAST Networks, Grant Marais said, “A deployment of this scale is a massive undertaking by world standards and an African first which we are very proud of.”

Evidently it was hugely important for both retailers and the expected crowds that Mall of Africa could ensure reliable, quick Wi-Fi across the entirety of the complex, which was why this sole aspect of the development began 12 months ago.

In keeping with this focus on modern demands, Mall of Africa has a dedicated Uber drop-off point to work alongside its 6,500 parking bays and valet service, another first in South Africa.

The response to another mall

The more cynical might argue that malls are not what South Africa needs, but a project that has already created huge amounts of work and if successful will provide thousands of jobs is surely beneficial for local people.

The mall opened on Thursday April 28th and saw 124,000 visitors arrive in flocks as they sought to shop at famous international outlets such as Armani Exchange, H&M and Zara.

For the first 5 days of opening, Mall of Africa has remained a huge attraction, with brand manager Vanessa Fourie stating that by 8pm on Saturday, 79,500 people had been to the mall that day.

Fourie seemed confident that the Monday Bank Holiday would also be a boon saying, “I think the public holiday is most certainly going to work in our favor…many stores would still be running specials, adding to the mall’s attraction.”

Official figures released by the mall suggest that 34% of visitors over the first 5 days were repeat customers. This suggests that the range of attractions accompanying the shops has worked well and while it’s early days, it looks like Mall of Africa’s big ambitions might well pay off.

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South African investment firm RMB Holdings to buy stake in Mall of Africa developer

3 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African investment firm RMB Holdings Ltd. plans to expand its portfolio by buying a stake in unlisted Atterbury, builder of the Mall of Africa, one of the largest shopping venues in the country.

RMB Holdings Limited, which holds a 34 percent stake in FirstRand, the largest banking group by value in Africa’s most industrialised economy as its only major asset, said on Tuesday it will buy 25.01 percent of Atterbury.

Although it did not put a price on the cost of investment for Attebury, RMB Holdings said in the statement it would fund the deal through preference shares.

RMB Holdings said in a statement it aimed to use Atterbury to spearhead its retail and industrial property business.

The Mall of Africa, which opened its doors last week, targets consumers in Midrand a middle-class suburb north of the commercial hub of Johannesburg.

“We thought it was a missing element of our overall portfolio,” RMB Holdings Chief Executive Herman Bosman told Reuters, referring to property investments.

Shares in RMB Holdings fell 4.60 percent on the bourse by 1358 GMT, as stocks tumbled across the board tracking a sell-off in emerging markets.

 

(Reporting by Tanisha Heiberg; Editing by James Macharia)

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South Africa’s petrol pump price to increase in May

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The retail price of petrol in South Africa will increase by nearly 1 percent from May 4, while the price of wholesale diesel will largely remain steady, the energy department said on Monday.

The price of petrol will increase by 12 cents to 12.74 rand per litre in the commercial hub of Gauteng province, while diesel will go down by 1 cents to 10.52 rand per litre, the department said in a statement.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Alison Williams)

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South Africa’s trade balance swings to 2.92 bil rand surplus in March

29 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s trade balance swung to a 2.92 billion rand ($206.10 million) surplus in March from a revised 1.27 billion rand deficit in February, the national revenue agency said on Friday.

Exports were up by 6.3 percent to 96.13 billion rand on a month-on-month basis, while imports rose by 1.6 percent to 93.22 billion rand on a month-on-month basis, the South African Revenue Service said in a statement.

($1 = 14.1678 rand)

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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South African supermarket chain Pick n Pay to expand into Nigeria

26 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African supermarket operator Pick n Pay plans to expand into Nigeria next year through a partnership with a local conglomerate, as it seeks to reduce its reliance on its home market, it said on Tuesday.

Pick n Pay already operates in Botswana, Zimbabwe and Namibia and plans to open new stores in Ghana next year. Like many other South African companies it wants to expand further across the continent amid sluggish economic growth at home.

The retailer, which reported a 26 percent jump in annual earnings on Tuesday, said it would take a 51 percent stake in a Nigerian joint venture with conglomerate A.G. Leventis, which runs a food business. It did not disclose the size of the investment.

“We are not suddenly going to explode onto the scene in Nigeria next year but we are going to start the process of looking at all those things,” Pick n Pay’s CEO Richard Brasher told a results briefing, adding that he was aware of tough trading conditions in Nigeria and would not expand hastily.

Nigeria is Africa’s biggest economy but some South African companies that expanded into the west African country, including Dairy products maker Clover Industries and fashion retailer Truworths, have either pulled out or scaled down due to a scarcity of hard currency to import spare parts and raw materials.

Brasher said Pick n Pay was taking a long-term view of Africa’s most populous nation.

“If you’re in the retail business and you are an African business its hard to ignore Nigeria,” he told Reuters.

Gryphon Asset Management analyst Reuben Beelders said he backed Pick n Pay’s conservative approach to Nigeria.

“People have realised that Africa is not just going to be a pot of gold at the end of the road, it’s a lot of graft and it’s going to need long-term investment rather than something that happens quickly,” Cape Town-based Beelders said.

Pick n Pay has lost ground in South Africa to rivals such as market leader Shoprite, after failing to invest in new stores. But Brasher, a former UK head of Tesco who took over in January 2013, is implementing a plan to win back market share.

Pick n Pay said headline earnings per share (EPS) rose 26.4 percent from a year earlier to 224.04 cents in the year to the end of February, helped by cost-cutting measures. Headline EPS, a measure that excludes certain one-off items, is the profit figure most widely used in South Africa.

The company declared a final dividend of 125.20 cents per share, bringing the year’s total payout to 149.40 cents, 26.5 percent higher than the previous year.

Shares in Pick n Pay, which are up nearly 30 percent over the last year, inched up 0.58 percent to 69.89 rand by 1215 GMT.

 

(By Zandi Shabalala. Editing by James Macharia and Susan Fenton)

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South Africa’s MTN pays former CEO $1.6 million after resigning over Nigeria fine

25 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s MTN paid its former chief executive officer Sifiso Dabengwa 23.7 million rand ($1.6 million) after he resigned over a record fine imposed on the company by Nigerian authorities.

Dabengwa quit in November after Nigerian authorities imposed a $5.2 million fine on MTN’s Nigerian unit in October.

He was awarded a total payout of 40.6 million rand, MTN said in its annual report on Monday.

Non-executive chairman Phuthuma Nhleko was then named executive chairman of Africa’s biggest mobile phone group for a period of six months, to help resolve the fine.

MTN has since managed to negotiate the penalty down to $3.9 billion but is still hoping to reduce it further.

MTN’s share price has been down almost 20 percent since October when the fine was imposed. The stock had fallen 1.21 percent at 145.59 rand by 1407 GMT.

Last year, Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.

($1 = 14.4865 rand)

 

(Reporting by Nqobile Dludla and Tanisha Heiberg; Editing by James Macharia

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South Africa could extend talks on proposed empowerment rules

22 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa could extend consultations on a draft law opposed by mining companies that say the move to redress imbalances of the nation’s past apartheid rule would impose unfair conditions over black ownership.

Mining minister Mosebenzi Zwane announced the potential extension at a business briefing on Friday and later said that talks with the industry over the proposed changes to the Mining Charter would take place next Monday and Tuesday.

The new draft of the charter says that companies must be at least 26 percent black-owned at all times, even if some of the black shareholders choose to sell out.

Mining companies argue that after they have complied with the 26 percent black empowerment rule it shouldn’t be their responsibility to monitor the ownership balance continually.

A 30-day consultation period started when the draft law was published last Friday, but the mining industry has said this is not long enough.

“Should it be necessary for us to go beyond 30 days that call will be made as the necessity arises,” Zwane said. “Rather than us complaining about time, let’s engage.”

The news about next week’s talks was announced by Zwane at AngloGold Ashanti’s TauTona mine west of Johannesburg, where he said: “It (the draft law) is just a proposal, which is why we are saying ‘come, let’s talk’.”

The Chamber of Mines, which represents companies such as Anglo American and Glencore, said it was not consulted about the proposed changes and that the draft law comes at a difficult time for commodity producers contending with depressed prices and rising costs.

“We are saying it’s a tough time and, for us to regulate and go through these processes right now, the industry is taking strain,” the chamber’s president Mike Teke told Reuters.

AngloGold CEO Srinivasan Venkatakrishnan, meanwhile, said that judgment should be reserved until after “robust engagements and discussions” have been completed.

“We have high expectations,” he said of the talks.

Failure to meet the empowerment targets could result in mining permits or rights being revoked.

“This draft seems to me like all stick and no carrot for the industry,” said one fund manager at a large South African firm. “The whole situation adds another layer of confusion.”

A court process is under way to clarify the “once-empowered, always-empowered” principle and could have an impact on the draft bill.

Zwane said that investors should not be concerned by the bill because the process will be transparent and inclusive.

“I don’t foresee a situation where investors should be scared of people practising their democratic right to engage,” he told Reuters. “Let’s get real with the issues, let’s talk.”

 

(By Zandi Shabalala. Additional reporting by Ed Stoddard; Editing by James Macharia and David Goodman)

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