Company news in brief

Nedbank decides against dividend

South Africa's Nedbank said yesterday it was not paying a dividend for 2020, when its annual profit plunged 56.8%.

Nedbank's headline earnings per share (HEPS) – the main profit measure in South Africa - dropped 56.8% to 1 126 cents in the year to Dec. 31, at the upper end of its forecast range and compared with 2 605 cents a year earlier.

The bank set new medium-term targets, after withdrawing its earlier targets last year due to the coronavirus crisis. It now aims to exceed 2019 levels of HEPS and return on equity - a key measure of bank profitability - and reduce its cost-to-income ratio to below 54% by 2023.

HEPS for the first six months of 2021 would likely increase by more than 20% on the 438 cents it reported in the first half last year, Nedbank said.

Growth opportunities included the potential for Nedbank to unlock more value from its stake in Togo-based lender Ecobank, and in particular its operations in West Africa.

Nedbank's 21% stake in its West African associate has historically dragged on profits, and in 2020 the bank impaired its investment by R750 million. – Nampa/Reuters

Exxon urges shareholders to reject proposals

Oil major Exxon Mobil Corp on Tuesday urged shareholders to reject seven proposals up for voting at its annual meeting on May 26, including the proposition to split its chairman and CEO roles.

The shareholders' proposals also include BNP Paribas' demand for a report on Exxon's climate-related lobbying and whether such activities align with the Paris Accord. Another proposal asks for an analysis of how 2050 net zero carbon emission targets affect Exxon's business.

Last year, Exxon's shareholders rejected climate-related proposals and splitting the chairman and chief executive's roles at the company's annual meeting.

Exxon is also facing a proxy fight from activist investor Engine No. 1 that last year took on the top US oil producer for what it said were poor financial returns and a lagging approach to cleaner fuels.

Engine No. 1 on Monday named four directors it wants shareholders to remove at Exxon's upcoming annual general meeting. – Nampa/Reuters

Mastercard, Visa to delay raising card fees

Mastercard Inc and Visa Inc on Tuesday postponed plans to raise the fees U.S. merchants pay when customers use cards online until April next year, as businesses continue to struggle during the Covid-19 pandemic.

"Mindful that some merchants are still facing unprecedented circumstances ...we are delaying our previously announced interchange adjustments in the US until April 2022," Mastercard said.

Interchange fee is the charge a merchant pays to the card-issuing bank every time a consumer swipes their card. Visa said in an email it would not make any future rate changes in the US for another year while the economy recovers.

Consumers have turned to online modes of payments, using cards to pay for clothes, food, groceries and even leisure spending as they shelter at home during the pandemic.

Senator Dick Durbin, a Democrat from Illinois, and US representative Peter Welch, a Democrat from Vermont, wrote a letter to the chief executive officers of Visa and Mastercard earlier this month, asking them to call off any plans to increase fees as the country was "still reeling from the ongoing pandemic". – Nampa/Reuters

BMW sees significant profit growth in 2021

German carmaker BMW yesterday said it expects a significant year-on-year increase in group pretax profit in 2021 as it forecast a strong performance in all of its segments.

BMW, which also owns the MINI and Rolls-Royce brands, said it expects the automotive segment to record a solid year-on-year increase in deliveries, with the segment's EBIT margin expected to rise to between 6% and 8%.

Around 90% of market segments will have fully electric models by 2023 and the BMW i4 model will be launched three months ahead of schedule, the carmaker said in a statement.

"The BMW Group has ambitious plans for 2021," chief executive Oliver Zipse said. "We have started the new year with strong momentum and are aiming to return to pre-crisis levels as swiftly as possible - and go even further." – Nampa/Reuters

Volkswagen is worth 200 billion euro

Volkswagen, the world's No.2 carmaker, is worth 200 billion euro (US$238 billion), chief executive Herbert Diess said, confirming a previously stated target on the back of a 38% share price increase so far in 2021.

"Analysts, too, arrive at the conclusion that the sum of the parts has that value," Diess told Reuters following the group's annual news conference.

Shares in Volkswagen, which owns the Audi and Porsche brands, rose as much as 8.4% on Tuesday to their highest level since July 6, 2015, giving the carmaker a current market valuation of more than 120 billion euro.

Tesla, which only sells a fraction of the cars compared to its German rival, has a current market value of about US$680 billion.

"We have shown that we are not to be underestimated with regard to the new areas of business. We are a serious player and have the resources to be a part of the new game," Diess said. – Nampa/Reuters