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Bharti Airtel Africa’s Loss Slashed to $91 Million

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  • Bharti Airtel Africa’s Loss Slashed to $91 Million

From a $170 million loss a year ago in its Africa’s operations, India’s telecommunications firm, Bharti Airtel, sharply narrowed its net loss in the continent’s operations to $91 million.

The firm, owned by India’s business mogul, Sunnil Bharti Mittal, hinged the slash on growth in data customers and consumption and currency stabilisation in most markets, except for Nigeria, where the Naira depreciated by 7.9 per cent. Revenue for the continent rose 3.7 per cent to $898 million.

Chief Operating Officer of Africa, Raghunath Mandava, said that underlying Africa revenue growth for the quarter was 4.7 per cent year- on-year, backed by focus on profitable top line growth, led by localised distribution, stronger data networks and the company’s war on waste programme.

In Nigeria, the firm, which is headed by Segun Ogunsanya, currently controls 22 per cent of the market and services over 32 million customers across the country.

The telecommunications firm claimed that its second-quarter net profit fell almost five per cent from a year earlier, as its voice and data businesses came under pressure with the entry of Reliance Jio Infocomm in India, and its interest burden rose. The Indian top telecom company beat market estimates, though, as it controlled costs.

According to ET India, the company posted a net profit of Rs 1,461 crore for the three months ended September, topping the average estimate of about Rs 1,200 crore in an ET poll of analysts. Profit was little changed from Rs 1,462 crore in the April-June quarter.

Revenue climbed 3.4 per cent to Rs 24,652 crore from a year earlier and the telco ended the quarter with more than 363 million customers across India, South Asia and Africa, Bharti Airtel said in a statement. In India, which makes up over 77 per cent of overall revenue, the company had almost 260 million mobile subscribers.

“Overall revenue momentum in India has been sustained during Q2 with a growth of 10.1 per cent Y-o-Y. This is primarily due to the strong performance of our non-mobile businesses, which grew in aggregate at 18.8 per cent Y-o-Y, albeit our mobile business has experienced a slowdown in growth due to free services being offered by a new operator,” Managing Director and Chief Executive Officer, India & South Asia, Gopal Vittal, said in the statement.

Bharti Airtel said separately that it plans to sell a “significant” stake in tower unit Bharti Infratel, without giving further details. The company holds almost 72 per cent in the unit. Infratel shares climbed 2.4 per cent to Rs 378.7 at the close on the BSE Tuesday, giving it a market capitalisation of almost Rs 72,000 crore. Airtel shares gained 1.5 per cent to Rs 311.05.

Jio, backed by India’s richest person Mukesh Ambani, started commercial operations on September 5, with a free voice and data offer. Incumbents, including Bharti Airtel, were forced to slash effective data rates and even offer free voice calling on some plans. Existing telcos had started cutting rates even before Jio’s launch, all of which hurt key operational metrics such as average revenue per user (ARPU) and average revenue per minute (ARPM).

While the rate cuts helped Airtel to add data subscribers, it hasn’t been able to offset the fall in rates, thus lowering data revenue per user and sharply slowing the pace of data revenue growth, expected to be the mainstay at a time voice business has been slowing. The Jio effect added to the woes of Airtel – almost a third owned by Singapore Telecommunications – in a quarter that’s historically weak for all telcos as subscribers tend to make fewer calls, hurting minutes of usage (MoU).

Airtel’s ARPU for voice and data combined fell four per cent on quarter while MoU declined 0.5 per cent sequentially. Both voice and data ARPUs fell two per cent and 0.5 per cent on quarter, while realised rates for both services dropped 3.2 per cent and 10 per cent.

However, the company’s data customer base grew 6.4 per cent on quarter and almost 23 per cent on year, with data usage gaining 10.6 per cent on quarter. Data now accounts for 24.7 per cent of the carrier’s India mobile revenue, compared with 23.7 per cent in the previous quarter. Mobile data revenue during the quarter grew 23.6 per cent on year, sharply slower than about 60 per cent at the same time last year.

Airtel said the percentage of users leaving the network widened to 3.7 per cent in the quarter from 3.5 per cent a year ago due to competitive pressures.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Dangote Group Expands Refinery Storage Capacity to 5.3 Billion Litres

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The Dangote Group has announced a significant expansion of its refinery storage capacity.

The expansion, disclosed by Alhaji Aliko Dangote, President of the Dangote Group, during his address at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.

Currently boasting a storage capacity of 4.78 billion litres, the Dangote Petrochemical Refinery is set to increase this figure by an additional 600 million litres, bringing the total capacity to an impressive 5.3 billion litres.

This expansion underscores Dangote’s commitment to transforming Nigeria into a hub for refined petroleum products and solidifies the refinery’s role as a strategic reserve for the nation.

Addressing stakeholders at the forum, Dangote highlighted the refinery’s pivotal role in addressing longstanding challenges in Nigeria’s energy sector, particularly the absence of strategic reserves for petrol.

“The country doesn’t have strategic reserves in terms of petrol, which is very dangerous. But in our plant now, when you came, we had only 4.78 billion litres of various tankage capacity. But right now, we’re adding another 600 million,” Dangote affirmed.

The expansion comes amidst various operational challenges faced by the refinery, including attempts by international oil companies to hinder its operations.

Dangote asserted that these challenges, aimed at impeding the success of the refinery, were indicative of broader resistance to change within the oil industry.

“We borrowed the money based on our balance sheet. I think we borrowed just over $5.5bn. But we paid also a lot of interest as we went along, because the project was delayed because of a lack of land, also the sand-filling took a long time,” Dangote revealed, emphasizing the resilience required to overcome these obstacles.

Moreover, Dangote expressed optimism regarding the refinery’s capacity to influence regional fuel prices, citing the success story of diesel price reduction following the refinery’s market entry.

He indicated that while petrol pricing remains a complex issue governed by governmental policies, the refinery’s operations would strive to offer competitive pricing and supply stability.

The expansion of the Dangote Petrochemical Refinery not only marks a significant milestone in Nigeria’s industrial landscape but also positions the conglomerate as a key player in reshaping Africa’s energy dynamics.

As construction progresses towards completion, the refinery aims to further consolidate its role in meeting regional energy demands and fostering economic growth across West Africa.

With plans to commence sales of refined products in the coming months, Dangote’s refinery is poised to play a transformative role in Nigeria’s quest for energy independence and regional economic integration.

As stakeholders await the refinery’s operational debut, expectations are high for its potential to drive down fuel prices and enhance energy security across the region.

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Musk Secures Shareholder Support for Compensation and Texas Relocation

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Tesla Inc. shareholders have voted in favor of Chief Executive Officer Elon Musk’s compensation package and the company’s state of incorporation change to Texas.

The results, announced at Tesla’s annual meeting in Austin on Thursday, reflect shareholder approval despite challenges such as declining sales and a significant drop in stock price.

Musk had hinted at the likely outcome the night before the meeting in a post on X, stating that both resolutions were “passing by wide margins.”

The electric car manufacturer did not disclose the detailed breakdown of the votes.

The approval of Musk’s pay package, although advisory, demonstrates continued investor support for his leadership.

The package had previously been nullified by a Delaware judge in January, but Tesla plans to appeal. Should the appeal fail, relocating Tesla’s legal home to Texas may provide the board an opportunity to reintroduce the compensation plan under potentially more favorable legal conditions.

Originally approved in 2018 with 73% of the vote, Musk’s compensation plan makes him eligible for up to $55.8 billion in stock options if Tesla achieves specific milestones.

Currently, the value of these options is approximately $48.4 billion, according to the Bloomberg Billionaires Index.

Musk’s leadership has been a topic of significant debate, particularly in light of his oversight of six companies and his tendency toward abrupt strategic changes.

Earlier this year, Musk orchestrated Tesla’s largest layoffs to date, only to rehire some of the affected workers weeks later.

In addition to the compensation package, shareholders voted to reelect James Murdoch and Kimbal Musk to Tesla’s board.

Murdoch, son of media mogul Rupert Murdoch, has served on the board since 2017, while Kimbal Musk, Elon’s younger brother, has been a member since 2004.

Tesla’s stock saw a modest increase of 0.3% in extended trading following the announcement, though the stock had fallen about 27% over the year compared to a 14% gain in the S&P 500 Index.

During the annual meeting, held at Tesla’s Austin headquarters, shareholders showed enthusiastic support as Musk took the stage in a black Cybertruck T-shirt.

He shared updates on the company’s progress, including the introduction of three new models, the expansion of the Supercharger network, and record production levels for Cybertrucks.

“A lot of people said Cybertruck was fake, never going to come out. Now we’re shipping a lot of Cybertrucks,” Musk stated.

In addressing his substantial pay package, Musk clarified that it is structured as options requiring him to hold Tesla stock for five years. “I can’t cut and run, nor would I want to,” he said.

The push for shareholder support involved a dedicated “Vote Tesla” website and advertising on X, with Tesla investors and executives vocalizing their backing for Musk.

Despite some opposition from significant investors like Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the measures passed.

The relocation to Texas has been formalized, with the certificate of conversion available on the Texas Secretary of State website.

However, any future compensation plan will need to be restructured to comply with Texas legal standards, should the Delaware appeal fail.

The recent shareholder vote may enhance Tesla’s position in the forthcoming appeal. Delaware Chancery Court Judge Kathaleen St. Jude McCormick’s January decision to void the compensation package cited conflicts of interest and inadequate disclosure.

The appeal’s outcome, expected later this year, will determine the next steps for Musk’s compensation plan.

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Merger and Acquisition

Exxon Mobil’s Sale to Seplat Progresses After NNPC Drops Legal Challenge

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The Nigerian National Petroleum Corporation (NNPC) has withdrawn its legal challenge against Exxon Mobil Corp.’s sale of its oil and gas assets to Seplat Energy Plc.

This decision eliminates a major obstacle that had stalled the completion of the $1.3 billion deal.

The NNPC submitted an application to the high court in Abuja to discontinue the case, as confirmed by its legal firm, Afe Babalola, in an email on Thursday.

This move follows an agreement reached last month between NNPC and Exxon Mobil to finalize the transaction under undisclosed terms.

However, court documents reviewed by Bloomberg reveal that NNPC retains the right to resume its legal challenge if the settlement terms are not honored.

The sale, initially signed in February 2022, still requires approvals from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which has set an August deadline, and from Nigerian President Bola Tinubu.

The NNPC’s withdrawal significantly advances the deal but does not mark its final hurdle.

The addition of Exxon Mobil’s blocks will significantly enhance Seplat’s portfolio, almost quadrupling its output to over 130,000 barrels per day.

This acquisition is set to bolster Seplat’s status as one of the leading suppliers of domestic gas to Nigerian power plants, fortifying its influence in the region.

In a parallel development, Shell Plc’s divestment of its Nigerian onshore oil business to a consortium of local firms, valued at over $1.3 billion, also awaits regulatory approval after being announced in January.

Both deals highlight the ongoing restructuring and consolidation within Nigeria’s oil and gas industry, aimed at increasing efficiency and local participation.

As Nigeria navigates these substantial industry shifts, the successful completion of the Exxon Mobil-Seplat deal will be a critical indicator of the nation’s ability to manage large-scale energy transactions.

It will also set a precedent for future agreements and regulatory processes in the country’s vital oil and gas sector.

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