Author: Wendy Dancer

Eskom: we’re not broke

Eskom has lashed out at media reports that it was “broke”, saying it was confident it could keep going.

“Eskom refutes the notion that it is facing a cash crisis, and that it has only enough cash to last for the next three months,” it said in a statement.

“The company is confident that it will maintain sufficient liquidity to support its operations,” it added.

The state-owned enterprise said that it had noted weekend media reports about apparent financial problems.

However, it said that, because it was making an official announcement on its finances this coming Wednesday, “Eskom is not in a position to respond comprehensively to the specific issues raised at this stage”.

The power utility said that “external auditors have confirmed Eskom as a going concern, and as a result the company sees these reports as being inaccurate and misleading…

“It is important to reiterate that Eskom is not facing any liquidity challenges.”

The parastatal also said it wanted to highlight certain points, including that “whilst Eskom’s financial position has always been supported by significant reliance on debt and borrowings, its improved overall financial and operational performance over the last two years has led to an improved balance sheet”.

Eskom said it had “sufficient government guarantees” in order to be able to carry out its funding plan. It also had “maintained access to capital markets and raised committed funding”.

‘Eskom may not be able to pay salaries’

The Sunday Times newspaper published an article on Sunday in which it claimed that, according to financial statements it had seen, Eskom only had enough money to last approximately three months.

According to the weekly publication, Eskom has R20bn left, but has proposed to pay millions in bonuses, including to former CEO Brian Molefe and suspended acting chief executive Matshela Koko.

This week, Fin24 reported that, late last Monday, Eskom postponed its financial results presentations which had been due to take place last Tuesday.

Earlier this month, external auditors SizweNtsalubaGobodo reported the state utility to the Independent Regulatory Board of Auditors for apparent irregularities.

Koko has been on special leave since May, pending an investigation into an apparent conflict of interests, while a legal battle continues into the reinstatement and subsequent removal of Molefe.

On Sunday, the DA called on Public Enterprises Minister Lynne Brown to reject the proposed multi-million rand bonuses for the executives, past and present.

“The fact is that Eskom may not be able to pay salaries to its 49 000 employees come November,” said DA MP Natasha Mazzone in a statement.

Recent controversy

Here is a list of some recent controversies Eskom has been embroiled in.

  • Boiler tender worth R4-billion set aside

At the end of June‚ the Johannesburg High Court set aside a R4-billion tender given to Chinese firm Dongfang to replace a boiler at Mpumalanga power station Duvha.
Losing bidders‚ Murray and Roberts and General Electric‚ which had put in much cheaper bids than the Chinese firm‚ approached the Johannesburg High Court to have the tender set aside. Price was supposed to be a factor in the choice‚ Eskom had said.

  • Eskom paid Trillian R266-million without invoices

The Trillian report‚ released recently by advocate Geoff Budlender‚ SC‚ found millions were paid by Eskom to Trillian without proof any work was done for the power utility.
One invoice was for the broken boiler station that Dongfang had won a bid to fix. The boiler remains broken.
Budlender linked the Trillian company to the Guptas because their associate Salim Essa owns 60% of Trillian.

  • US firm acts

US auditing firm McKinsey has taken steps against its SA director‚ Vikas Sagar‚ after he wrote letters saying McKinsey was doing work for the company‚ something the company denies took place. The action taken against Sagar is part of a probe that is looking into Eskom contracts given to a Gupta-linked company.

  • Tegeta‚ Eskom and the Guptas

The Guptas received a R600 million pre-payment for coal from Eskom and used this money to buy the Optimum Coal mine.
Eskom said this was a pre-payment‚ but former Public Protector Thuli Madonsela said in her State of Capture report that this prepayment was irregular.

  • CEO Brian Molefe resigned‚ retired‚ rehired‚ rescinded

Molefe announced he was stepping down as Eskom CEO in November 2016 in the wake of the Tegeta incident and Madonsela report.
In May‚ he returned to Eskom as CEO‚ saying he had just retired.
After Public Enterprises Minister Lynne Brown was forced to explain his reappointment‚ she filed an affidavit saying he had never retired but had taken “unpaid leave”.
The scandal led to the Eskom board firing him at the end of May

  • Revelations in the Denton report‚ published in the Financial Mail

Eskom wasted about R200m over two years by failing to negotiate proper discounts with diesel suppliers. The company paid billions to companies without having received proper invoices‚ in many instances paying for services without evidence of having received the supplies for which it was paying.
Eskom contributed to its own financial problems‚ and contravened the Public Finance Management Act by failing to put proper controls in place.
It consistently overpaid for diesel‚ coal‚ logistics and other contracts.
Eskom employees diverted business opportunities to themselves at the expense of the utility.

Source: News24; timesLive
Image credit: National Geographic

Pressure mounts on JSE as it retrenches staff

The JSE, Africa’s oldest and largest stock exchange, has announced the restructuring of its operations that will see it shed 14% of its workforce by the end of the year as it adapted to technological changes.

JSE chief executive, Nicky Newton-King, said in a statement on Friday that the company was restructuring against the backdrop of South Africa’s low economic rate, ratings downgrades and low business confidence and as exchanges were adapting to fast paced technological changes.

Newton-King said the cost cutting would see the technology expenditure cut by a minimum of R70million over two years.

It said the changes would also involve a reduction in the company’s full time staff complement by 60 people, resulting in annualised cost savings of nearly R170m, to be fully realised from 2019 onwards.

The JSE made R65m in annualised savings to date through a combination of removing vacancies and reducing discretionary spend, she said.

“If we want to create a building block for future growth we must take some early decisions and there are none tougher than those that involve our people,” she said.

“We looked at all avenues before considering this action. While we appreciate this will be a very difficult time for the affected employees, the newly aligned company will be in a strong position to serve its current and future clients more effectively,” said Newton-King. She said this was preparing the JSE to meet the challenges head-on.

“The fast moving nature of our business requires us to change the way in which we operate so that we are as nimble and as cost effective as possible.

“We cannot do so without significantly rethinking our cost base, our operating model and the way we are structured as a business,” she said.

She also said the restructuring would see the refreshing of the JSE’s IT operating structure to align to best practice.

“At the same time, our large dependency on IT requires that we look at using technology in a more agile manner to support the execution of our business strategy,” Newton-King said.

Geoff Cook, director and co-founder of JSE competitor ZAR X, South Africa’s first additional stock exchange in 60 years, said on Friday it was not surprising that the JSE was restructuring, owing to the high costs associated with its old-world exchange model.

“The JSE model attracts high infrastructure costs and its technology model is inefficient – the market disruption brought about by modern technology is forcing these changes for it to remain relevant,” said Cook.

Global law firm Baker McKenzie’s latest Cross Border Initial Public Offering Index said South Africa’s three domestic listings raised a total of $250m (R3.34billion) in the first half of 2017. This was the highest amount of capital raised by South African companies recorded during the first half of any year since 2012.

A total of 388 companies are listed on the JSE which has a capitalisation of R14.271bn.

Lumkile Mondi, a senior lecturer at the school of economic and business sciences at the University of the Witwatersrand, said the country’s economic problems made it difficult for the JSE to attract listings.

By Dineo Faku for IOL

Sanlam warns of personal loan scam

Scammers are getting increasingly bolder in their methods to dupe consumers.

In the latest incident, financial services giant Sanlam has warned on Friday that a false entity is using its name to flaunt personal loans to consumers.

The false entity, called “Sanlam Loans SA Pty”, is circulating personal loan offers to consumers under the Sanlam brand name, using a fake logo and contact details and presents clients with a “guaranteed” loan offering of 4.5% return.

The return will supposedly be in the form “of personal, commercial, leasing, debt consolidation and home loans”.

Sanlam said it strongly disassociates itself from these loan offers and has no connections to Sanlam Loans SA Pty.

Sanlam’s loan offer is managed through Sanlam Personal Loans (Pty) Ltd, a registered credit provider.

It said its Forensic Investigations unit is investigating these offers and discouraged all clients to refrain from acting on the offer.

Sanlam is not the only company being targeted by scammers at the moment. Fin24 reported recently about a loan scam which falsely claimed to be on behalf of Wonga.com.

Wonga.com South Africa warned consumers against this loan scam after it became aware of people offering loans to consumers under the Wonga company logo, registration number and NCR number.

Consumers were urged to remain vigilant against personal loan scams and other forms of phishing by fraudsters.

Statistics released by the South African Anti-Phishing Service in 2013 indicated that the country is the second-most targeted country for phishing scams in the world.

In addition, the financial surveillance department of the South African Reserve Bank (Sarb) said it has seen a notable increase in advanced fee scams (also known as “419” or “Nigerian letter scams”) in SA over the last few years, particularly through the use of mobile phones.

In the Wonga.com scam the criminals sent consumers emails claiming to be from Wonga, offering them (fake) loans with unrealistic interest rates.

Once a recipient contacted the scammers, they were requested to provide personal information and to deposit various amounts of money into different private bank accounts.

This continued along with repeated requests for an advance fee payable, and the victim never receives the loan funds.

Wonga.com warned that it does not offer business loans and the only way to apply for a real Wonga loan is via the Wonga.com website – never by email or SMS.

In addition, Wonga offers a maximum loan of R2 500 for first time customers. Wonga will never request any payment upfront for a loan.

South Africa’s recession means households had less and less to spend, but the number one supermarket group in the country, Shoprite, is adopting an unlikely strategy: targeting upmarket shoppers.

Lower-income families who formed Shoprite’s core customer base were cutting back on spending, but the wealthy remained undented by the economic downturn.

In a bid to retain its leading industry position, the discount retailer’s new boss was driving business hard into the higher-margin niche dominated by rival Woolworths.

The stage was set for a turf war to win the hearts, minds and wallets of South Africa’s richest two million households — and ultimately, pre-eminence in the supermarket sector.

Shoprite CEO Pieter Engelbrecht told Reuters that growth lied in affluent areas and customers.

“A lot of those (wealthier) customers, two million of them, actually frequent our stores already, but not exclusively,” he said in an interview.

“Our job is to get a better share of their wallets when they are in our stores and then impress them so that they come back again.”

Shoprite was doubling its offering of the kind of high-end convenience foods that Woolworths built its reputation on – from gourmet lamb shanks and oxtail stew to teriyaki-and-ginger basted pork ribs.

Its range would reach around 500 products by the end of this year, Engelbrecht said.

These products typically cost about R200 for a meal for four — 10 times the minimum wage of R20 an hour as set by new labour laws making their way through Parliament.

As part of the drive to expand its range, Engelbrecht said Shoprite had upgraded its food technology and development facilities, and gone on a hiring spree for food developers and technologists.

The company planned to open 23 new outlets of its higher-end Checkers chain of stores, mostly in wealthy suburbs such as Waterfall City north of Johannesburg.

New Checkers stores and established ones that had been refurbished resembled Woolworths outlets with sparse lighting and wood-panelled sections boasting extensive wine and gourmet coffee selections, as well as counters selling quality selections of cheese and meat.

‘I love Woolies’

But how will Woolworths defend a market that delivered handsome profits for the company?

When asked about Shoprite’s push into upmarket convenience food, Woolworths said that it had an “incredibly valuable emotional connection” with its customers.

“Retail is a dynamic environment and the competition in the grocery and food market category means that we will always keep a watching brief on our competitors’ activities,” it added.

“We conduct weekly basket checks against the prices of competitors to ensure that our prices are comparable.”

It was a tall order for Shoprite to break Woolworths’ stranglehold.

“They (Woolworths) have been good at introducing new products and other innovations in line with consumer trends and feedback,” said Old Mutual Invest food retail analyst Kaya Nodada.

If Shoprite was to prevail, it would have to win over shoppers like JF Fourie.

“I love Woolies. The microwave meals are a bit overpriced, but they are tasty,” the 28-year-old who works in marketing said in the Woolworths branch in eastern Pretoria as she added shimeji mushrooms to the baby brinjals in her basket.

Fourie – a big fan of Gordon Ramsay – said she would need some convincing about the quality of Shoprite’s products, but would give it a go because Checkers adverts feature the British celebrity chef.

“I like the chef and he hates airplane food,” she adds.

“He’s fussy and I am too.”

 

http://www.supermarket.co.za

Prospects for the retail sector remain weak and are unlikely to improve in 2017, as confirmed by Massmart’s interim sales update released on Monday.

In the 26 weeks to June 25, Massmart recorded R42.5bn in sales, representing an increase of 0.5% compared with the year-earlier period. Comparable store sales fell 1.6%. Product inflation was estimated at 3.2%.

Massmart’s share price initially dipped more than 2% after the announcement, but bounced back into marginally positive territory. “I don’t know if there was anyone who was massively disappointed by the update,” said Old Mutual Investment Group consumer and industrial sector analyst Brian Pyle.

“Nobody really expected anything else other than what Massmart reported today. People are expecting tough times and the update shows it. That said, these numbers are weak.”

Comparable store sales fell at most of the company’s trading divisions. Like-for-like sales fell 3.5% at Massdiscounters, by 0.2% at Massbuild and 3.3% at Masscash. Masswarehouse grew comparable sales by 1.5% with inflation of 3.9%.

Mergence Investment Managers portfolio manager Peter Takaendesa said the food side of the business performed better than nonfood categories. Sales growth in food was 3%. In general merchandise it fell 2.9%.
“As we saw in the recently reported Woolworths numbers, the trend of better food sales relative to nonfood consumer goods is evident in Massmart’s numbers. Consumers are largely in survival mode and discretionary items have to take a back seat for now,” he said.

The biggest concern for all retailers was the downward trend in growth rates to levels much lower than cost inflation. This came at a cost to profit margins, said Takaendesa.

For Massmart, he expected a technical improvement in the sales rate for the rest of the year, but a stronger recovery was only likely later in 2018 “and could be better if we get an interest rate cut sooner to help consumer confidence recover”.

“It’s going to be difficult for Massmart’s turnaround efforts to show the intended results given much weaker consumer spend and the mid-long term risks posed by independent e-commerce rivals such as Takealot, which need to be monitored closely,” he said.

Ashburton Investments said that it preferred Woolworths in this sector.
Woolworths said it expected its adjusted headline earnings per share for the year to June 25 to fall between 5% and 10%.

“Massmart’s update shows the really poor consumer environment in SA,” said Ashburton portfolio manager Wayne McCurrie. “This is not unique to Massmart. All consumer firms are suffering the same — a subdued consumer in recession.”

McCurrie said the performance of Massmart’s food division was reasonable and the performance of the nonfood goods was “terrible”, but that the market knew this after SA fell into recession.

Pyle said the next six months were not going to be any better for any retailer, but that the sector could see recovery in 2018.

By Colleen Goko for Business Day

DIY homework caddies

Professional organiser Harmony Seiter has provided a step-by-step guide to creating an at-home homework station.

A homework caddy is great for small spaces, multi-purpose spaces, and for kids who love to do their homework on the floor or away from a desk or table.

• Find a caddy or a tray you like.
o You can find caddies of all shapes and sizes in many sections of a retailer (such as baby, bathroom, kitchen)
o You may need to add other containers to separate supplies

Watch the video here.

• Your needs will vary depending on the age of your kids.
o Primary grades may need crayons, scissors, glue sticks, pencils, pencil sharpener, erasers, colored pencils, a ruler, tape, paper, and possibly subject folders.
o Middle schoolers and high schoolers may need a calculator, pens, pencils, highlighters, pencil sharpener, erasers, stapler or paper clips, paper, glue sticks, loose leaf paper, sticky notes, tape, and subject folders.

• Place your homework caddy in an easy to reach spot for your student. It’s easily mobile, but make sure it`s brought to the same spot at the end of the day so homework time is always easy to manage.

Whether you keep it in your dedicated office or your kitchen pantry, a homework station will give your student all the tools she needs to successfully finish the day’s assignments.

Source: www.fox13now.com

 

Customers from hell – part 3

Nobody likes dealing with miserable people, and in parts 1 and 2 of this series we looked at how important issues of self-image and self-esteem created unhappiness and obnoxious behaviour. I also discussed that there are serious consequences that both you and the unfortunate other party have to deal with when we are unable to resolve problems and complaints effectively. In this final article I want to share some more practical ideas for dealing with these.

In any “customer from hell” situation, we need to assume that you have made all efforts to deal reasonably with the unhappiness. An easy way to remember what to do is summarised in the acronym LESTER.

• Listen carefully to what the unhappy customer is complaining about
• Empathise with them
• Say sorry and apologise
• Thank them for bringing it to your attention, and for having the courage to complain rather than just bad-mouthing your business, defecting to a rival, or worse. And then, when they are calm
• Explore options and explain what you can do, and finally
• Rectify the problem with a win:win solution, (following up to make sure it was truly resolved.)

But we are not dealing with normal, unhappy customers and their complaints and problems in this article. We are discussing the emotional, irrational, illogical and unreasonable customers from hell that don’t respond to all of your efforts to help them. You must be able to protect yourself from such individuals, because of the awful effect that they have on you. That one person that you have to deal with makes you forget the other 99% of nice people that you deal with on a day-to-day basis. The terrible memories of this encounter will stay vividly in your mind for a very long time. It makes work very unpleasant, and is demoralising and demotivating for everyone involved. Most importantly, it starts eating away at your own confidence, esteem and self-worth.

There are a few choices that you have in dealing with these customers…

• Laugh it off: Not always easy, but remember it’s mostly their problem, not yours. Of course, they will do their best to get you caught up in their problem – and their dramas.

• Just accept their behaviour, and allow the abuse to continue. It may be that this customer from hell is too important to your business, or has too much power for you to deal with. I don’t like this option, however, because if you allow the abuse to continue, it will continue, and maybe get even worse. More importantly what about the effect that this has on you? If you have no choice, protect yourself from these individuals by talking to somebody, or by taking out your frustrations somehow. Remember that ships don’t sink because of the water around them… They sink because of the water that gets in them. Are you going to allow this to happen in your life, and allow things to weigh you down? Do anything to let it go. Alternatively, just laugh it off.

• Confront with equal aggression: also not a good choice most of the time, because they will not like it, and the resulting consequences may be even worse. Also, don’t forget that passive aggression where you come up with creative ways of taking revenge on them or putting them down, is just as bad as real aggression.

• Confront assertively, by interrupting them in a firm voice to say something like this: “Mr. Smith, I want to help you, but I can’t do that while you are aggressive/abusive/shouting at me. Will you allow me to do so?” This is particularly important when customers become abusive and threaten you, bully you, insult you or even get physically violent. You need to be able to “draw a line in the sand” so to speak, and to let them know that their behaviour is not acceptable.

• Put the ball in their court. You may want to try this out: tell them that you have now come to the point where you have exhausted all of your options. You have tried everything in your power to help them, and they have not responded. “What do you want me to do?” There are three possible answers to this question. First, they may tell you what they want, and it’s impossible for you to do that, so you are going to have to say “No.” Second, they may tell you what they want, and you are able to respond to that, in which case do it and move on. But there is also a third possibility: they don’t respond, because they can’t think of anything else that you can do. At this stage, they may come to the realization that you have done your best, but don’t expect them to readily admit that. But at least they may become more reasonable.

• Cut the anchor: let them go. This is a tricky one, and we suggest that you check it out with your manager first. But if the abuse is becoming too much for you to deal with, you could say something like: “Mr. Jones, I am uncomfortable with all of the swearing and insults that you are shouting at me. With the greatest respect to you, I am now going to walk away, (or put the telephone down. Goodbye” And then walk away or put the telephone down softly. (In fact, pass them onto your competitors!) Don’t wrestle with pigs. It will get you all muddy and the pigs will love it.
• Just keep trying to sort it out, whatever it takes. If you do manage to turn them around, and you keep trying everything you can to turn them around, you may find a customer for life. What often helps is if you in fact tell them that you will not give up on them, ever.

Some final thoughts

• It’s obvious that you need a really great sense of humour to be able to deal with these abusive customers, and, as one author put it, “A thick skin is a gift from God.”

• David may have fought Goliath – but he didn’t choose to wrestle him. Choose your battles carefully

• Don’t take things personally. Remember that what people say is more a reflection of them, their reality, not a reflection of you.

• Be kind to unkind people – they need it the most

I’d like to end off with a line from one of my favourite lines from the poem “If,” written by Rudyard Kipling:

If you can keep your head when all about you are losing theirs’, and blaming it on you…
Then yours is the earth and everything that’s on it.

By Aki Kalliatakis, managing partner of Leadership Launchpad

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