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Turkish Airlines and Turkish Cargo Rise to the Top Amid Pandemic

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Turkish Airlines - Investors King

Although the aviation industry took a hard hit in 2020 and suffered its heaviest losses to date, Turkish Airlines distinguished itself with relatively good business performance. According to CAPA (Centre for Aviation, part of the Aviation Week Network) Turkish Airlines established itself as the busiest aircraft carrier in Europe during the pandemic, and one of the top five airlines in the world. This was achieved by a series of agile steps to maintain liquidity, keep costs at a manageable level and adapt to the “new normal”.

Turkish Airlines successfully ended the fiscal year 2020 with 6.7 billion USD revenue, which accounts for 50% of the preceding year’s level, with a net loss of only 836 million USD. During these uncertain times, the airline was also able to maintain its robust route network. According to Eurocontrol, in April 2021 Turkish Airlines operated an average of 685 flights per day – almost double the number of the closest competitor in Europe, Lufthansa. In 2020, Turkish Airlines flew 28 million passengers, with an impressive load factor of 71%. Currently, the airline serves 179 international destinations with 16 intercountry and 58 intercontinental flights. The new Istanbul Airport also stayed on top: even with a 68% loss of traffic, it was still Europe’s most successful airport as of March 2021, with 616 departing and arriving flights.

This success is based on cost cutting activities, capex reduction and active capacity management. In fact, Turkish Airlines achieved such performance without relying on any governmental cash injections. Furthermore, agreements with Boeing and Airbus on fleet growth will further decrease the aircraft financing needs of Turkish Airlines by around 7 billion USD in the coming years.

“Our success as the best performing flag-carrier airline in Europe is not coincidental. Apart from the multiple measures we took, we owe this success to our dedicated staff. While other airlines faced layoffs, we did not part ways with any of our colleagues during this process. Instead everyone within Turkish Airlines accepted salary cuts from up to 50% depending on the role and responsibilities. The exceptional sense of unity within our staff is what sets Turkish Airlines apart: together as a family, we decided that no member of the Turkish Airlines family would be left behind during this crisis.”, says Turkish Airlines’ Chairman of the Board and the Executive Committee, M. İlker Aycı.

Turkish Airlines also turned the pandemic into an opportunity to increase its cargo operations, with 50 of its passenger aircrafts being reconfigured to increase its cargo fleet capacity. Turkish Cargo managed to become one of the top five air cargo companies in the world and the 6th largest cargo company. The company increased its market share in total global cargo revenue from 0.6% in 2009 to 4.7% in 2020. As of February 2021, one in 20 cargo flights around the world were handled by Turkish Cargo.

This allowed Turkish Cargo to deliver 50,000 tons of medical supplies, including more than 45 million doses of COVID-19 vaccines, to destinations all over the world. In addition, new technologies and innovative solutions have been developed. One example is SmartIST, one of the largest air cargo facilities in the world, which is scheduled to open this year. Located at Istanbul Airport, the facility uses modern technology such as drones and automated robots to process and deliver goods even faster.

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

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Merger and Acquisition

Oppenheimer Acquires Full Control of Nigeria’s GZ Industries in Bet on Economic Revival

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GZ Industries Limited

Jonathan Oppenheimer, scion of South African billionaire Nicky Oppenheimer, has secured full ownership of Nigeria’s largest beverage can manufacturer, GZ Industries Ltd.

Oppenheimer Partners Ltd. concluded the acquisition of the remaining shares from Affirma Capital, formerly known as Standard Chartered Private Equity.

While financial details were not disclosed, the private equity firm previously held a 37.5% stake in GZ Industries, a major supplier of cans to global brands such as Coca-Cola.

The move positions Jonathan Oppenheimer to play a pivotal role in shaping GZI’s growth trajectory in sub-Saharan Africa.

With urban, educated adults in the region leading global sugary drink consumption with 12.4 servings per week, GZI’s strategic importance in meeting this demand is underscored.

Oppenheimer Partners initially invested in GZI in 2018, coinciding with the establishment of a factory in South Africa, where the company now commands a 20% market share.

GZI, a producer of 3 billion aluminum cans annually in Africa, competes with Nampak Ltd., which is currently undergoing restructuring efforts.

Affirma Capital’s exit from GZI aligns with its broader investment strategy in Africa, having invested in 11 companies since 2008, with eight successful exits returning over $800 million to investors.

Jonathan Oppenheimer, part of the wealthy Oppenheimer family, inherits a substantial role in GZ Industries, further diversifying the family’s portfolio, which amassed significant wealth through the 2012 sale of their stake in De Beers for about $5 billion.

The family’s combined net worth is estimated at $9.4 billion, according to the Bloomberg Billionaires Index.

As Nigeria’s President Bola Tinubu outlines ambitious spending plans for 2024, the acquisition positions GZI strategically in a potentially thriving economic landscape.

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Merger and Acquisition

Equinor Concludes Sale of Stake in Chevron’s Agbami Oil Field to Chappal Energies

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Chevron

Norwegian energy company Equinor has successfully finalized the sale of its 20.21 per cent stake in Chevron’s Agbami oil field.

The transaction, including Equinor’s 53.85 per cent ownership in Oil Mining License 128, was completed with Nigerian-owned Chappal Energies. The financial details of the deal have not been disclosed.

Equinor, a longstanding player in Nigeria’s energy sector since 1992, views this divestment as a strategic move in line with its broader international oil and gas portfolio optimization strategy.

Nina Koch, Equinor’s Senior Vice President for Africa Operations, commented on the transaction, stating, “This transaction realizes value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas.”

Chappal Energies, the acquiring entity, is a committed Nigerian-owned energy company with ambitions to further develop the assets, contributing significantly to the Nigerian economy.

The completion of the transaction remains contingent on various conditions, including regulatory and contractual approvals.

Equinor’s exit from the Agbami oil field signifies a shift in its global asset portfolio management, enabling the company to concentrate on its core operational areas.

The deal aligns with the broader industry dynamics and demonstrates Equinor’s commitment to strategic alignment and operational efficiency.

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Company News

Dangote Petroleum Refinery Set to Make History with Public Listing on NGX

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Dangote refinery

Aliko Dangote, the president and chief executive of Dangote Industries Limited, has announced plans to publicly list the subsidiary, Dangote Petroleum Refinery, on the Nigerian Exchange Limited (NGX).

Dangote expressed confidence in overcoming previous challenges related to crude oil supply, stating, “We have resolved all the issues with crude oil supply. We are now ready to move forward with our plans to list the refinery on the Nigerian Exchange Limited.”

The refinery, poised to commence operations in December, holds the promise of significant contributions to the Nigerian economy.

At full capacity, it is expected to produce 650,000 barrels of oil per day, with an initial rollout of 540,000 barrels daily.

The facility will produce 27 million liters of diesel, 11 million liters of kerosene, and nine million liters of jet fuel, sourcing crude from various Nigerian producers, including the state oil company.

A finalized deal for the delivery of the first cargo of approximately six million barrels next month signals the imminent realization of this ambitious project.

The refinery’s impact is anticipated to extend beyond the oil and gas sector, with projections suggesting significant cost savings for Nigeria by eliminating the need to import petrol.

Industry operators and government officials are optimistic about the transformative potential of the Dangote Refinery.

Akinwumi Adesina, President of the African Development Bank (AfDB), lauded the project as the best-industrialized initiative for Africa, projecting substantial savings for Nigeria and the continent as a whole.

As Nigeria’s largest refinery project, the facility has garnered praise from the Lagos Chamber of Commerce and Industry (LCCI).

Dr. Chinyere Almona, the LCCI Director-General, commended the visionary efforts of Aliko Dangote and the supportive federal government, emphasizing the refinery’s capacity to meet Nigeria’s refined petroleum product needs.

The impending listing on the NGX positions Dangote Petroleum Refinery as a catalyst for economic growth, energy security, and self-sufficiency in Nigeria and beyond.

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