COMPANY NEWS IN BRIEF
South African appeal court suspends order halting Shell drillingA South African appeal court has suspended a previous ruling that halted offshore exploration by Shell along the Wild Coast, court documents showed on Monday.
In a widely expected decision, the Supreme Court of Appeal provided a lifeline to oil companies exploring along South Africa's east coast. The previous decision by a lower court stopped exploration in the environmentally sensitive area.
-REUTERS-
OPEC+ extends deep oil production cuts into 2025
OPEC+ agreed on Sunday to extend most of its deep oil output cuts well into 2025 as the group seeks to shore up the market amid tepid demand growth, high interest rates and rising rival U.S. production.
Brent crude oil prices have been trading near $80 per barrel in recent days, below what many OPEC+ members need to balance their budgets. Worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies.
The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, have made a series of deep output cuts since late 2022.
OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand.
Those include 3.66 million bpd of cuts, which were due to expire at the end of 2024, and voluntary cuts by eight members of 2.2 million bpd, expiring at the end of June 2024.
-REUTERS-
Botswana's Debswana diamond sales fall 48% in first quarter
Debswana Diamond Company's rough diamond sales fell 48.3% in the first quarter of 2024, data released by Botswana's central bank showed Friday, as the sluggish market conditions faced in 2023 continued into the beginning of the new year.
Debswana, equally owned by Botswana and Anglo American Plc's De Beers, sells 75% of its output to De Beers. The balance is taken up by the state-owned Okavango Diamond Company (ODC).
Botswana and De Beers in June last year agreed a new ten-year diamond sales agreement under which ODC’s share of Debswana output will rise to 30% at the signing of the new contract before it rises gradually to 50% by the end of the new contract, as the country seeks to get more revenues from its resources.
In the first quarter, Debswana sold diamonds worth $560.9 million, from $1.085 billion registered in the same period last year. In local currency pula terms, the decrease in Debswana sales was lower falling 45.6% to 7.676 billion pula (US$560.35 million).
-REUTERS-
Insimbi earnings plunge 54%, hurt by SA decision to curb metal exports
INSIMBI Holdings on Friday said that South Africa had made little progress in resolving key infrastructure challenges hobbling mining and industrial sectors, with these critical gaps worsening an operating framework characterised by a dip in prices for some commodities.
This comes as the company’s operating profit fell by 38% to R123.2 million for the year ended 29 February 2024, largely affected by the government’s decision to curb exports of ferrous and non-ferrous scrap and waste metal.
Insimbi sources, processes, beneficiates and recycles ferrous and non-ferrous metals.
“The South African government allowed the ban on exports of ferrous and non-ferrous waste and scrap metal to expire in December 2023. For Insimbi, the ban primarily impacted our ferrous division,” Insimbi said on Friday.
The company said it had been able to adapt and manage the new regulatory move, attributable to the diversified nature of the group.
However, with South Africa still facing port, rail, water and electricity bottlenecks, Insimbi chairperson Robert Dickerson said the company had not been spared the impact of this.
“South Africa has made scant headway on its critical infrastructural challenges,” Dickerson said.
Apart from port and logistical challenges, Dickerson said Insimbi was also affected by the “effects of lower-than-expected commodity prices, high interest rates, protracted periods of load shedding, and the ban on exporting” recycled metals.
During the full year period under review, revenues in Insimbi dipped by 2% to R5.5 billion, resulting in headline earnings per share (Heps) for the year plunging 54% to 12.54 cents.
With cash from operating activities down by 22% at R101 700, operating costs in the company were 6% lower compared to the previous year as employee costs reduced by R14m.
However, finance costs for the period rose from R59m in the prior year to R73m “as a result of high interest rates” throughout the financial year.
-BUSINESS REPORT/IOL-
DStv channel slump
MultiChoice’s DStv has significantly slowed its channel additions and removals over the past two years, adding just three channels since 15 December 2022.
The pay-TV broadcaster has seen its South African subscriber growth slow considerably over the past five years and begin to decline, placing it under substantial financial pressure.
DStv has added one and removed one channel from its catalogue so far in 2024. However, the removal wasn’t its decision.
WildEarth — formerly channel 183 — was pulled from DStv on 30 April after the channel’s chair, André Crawford-Brunt, said it isn’t viable for the company to continue airing its content on DStv without compensation.
On 1 April, DStv added the channel 1Max, offering Premium and Compact Plus subscribers access to select content from MultiChoice’s Showmax.
The pay-TV broadcaster added only two channels and removed one throughout 2023.
However, 2022 is a stark comparison. DStv added seven channels and removed four over the year.
The MultiChoice-owned broadcaster saw its overall subscriber numbers decline for the first time during the first half of the 2023/24 financial year — a first for the broadcaster.