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Credit Corp Names Richard Sinamoi as Interim Chairman
by PNG Business News - July 21, 2021
Photo Credit: Credit Corp
At the annual general meeting last month, the board named Richard Sinamoi as interim chairman.
“There has been an orderly transition to new leadership and the new board is stable and strongly aligned in our thinking,” Sinamoi said.
He described becoming chairman of Credit Corporation as an "honour" at "such a critical period for the business and the financial services sector."
“Throughout this challenging period due to the Covid-19 pandemic, maintaining our balance sheet strength and supporting our small-medium enterprise customers in the Pacific have been key strategic priorities,” he said.
“Our customers have generally displayed a high degree of resilience throughout this period.
“However, some continue to be challenged by restrictions and changes to consumer behaviour.
“As a director, I have been fortunate to have worked with the current board members in helping to contribute to Credit Corporation successive results over the years.”
Sinamoi acknowledged the outgoing chairman Syd Yates and welcomed newly-elected directors Stephen Humphries and Sir Melchior Togolo.
“I look forward to my ongoing work with the board, management and the entire Credit Corporation team to continue our mission to support SMEs (small to medium enterprises) throughout the Pacific with their financial needs.
“The board is currently working with our interim CEO Danny Robinson and chief financial officer Jeff Undah as we undertake a review of the group’s strategy to ensure we are well-positioned to seize the opportunities presented as we transition out of the Covid-19 pandemic.”
The National (20 July 2021). “Sinamoi is chairman of Credit Corp”.
PNG Business News - March 19, 2021
Credit Corp Posts K22m Profit
After reporting a Core Operating Profit of K25.66 million for the 2020 financial year, Credit Corporation PNG has posted a net profit of K22 million. Credit Corporation CEO Peter Aitsi released the 2020 results, saying it represents the complexities of the COVID-19 pandemic during the year, as well as the group's determination to actively support PNG's SME business through these initiatives. Higher impairment charges as a result of a drop in economic activity across the Pacific and internationally have had a major effect on earnings. Despite the challenges of FY20, the group's balance sheet remained solid. The group's liquidity position improved by 64% to K230 million, funding rose by 3%, and the loan-to-deposit ratio improved to 92 per cent. The company is well-capitalized, with a liquidity and financing matrix that far exceeds regulatory requirements. The overall risk-weighted capital ratio rose to 32.6 per cent during this period. Due to the conservative approach to lending in the current climate, gross loan receivables (net of unearned interest) decreased by K54 million in 2020. Although stressed exposures as a percentage of gross loans increased, the group took a cautious approach by raising impairment provisions from K64 million to K119 million. In June 2020, the board announced a final dividend of 12 toea per share for 2019. This equated to a 7.1 per cent dividend yield. Given the economic uncertainty, the board agreed not to pay an interim dividend for the 2020 fiscal year. Aitsi said the challenges posed by the COVID-19 pandemic from the start of the second quarter to the end of the financial year had placed the company in an unprecedented position. “2020 has been an abnormal and unprecedented reporting period for us and for many others,” he said. “During the period, governments of countries where the group operates focused on preventive measures to keep people safe. Although essential, these restrictive measures led significantly to a decline in business activity. “Our immediate focus was to ensure the wellbeing of our people and our customers in addition to doing what we could to assist our customers experiencing financial challenges as a result of the COVID-19 situation,” he said. “I am proud of how we all pulled together to deliver service to our customers, and our businesses remained operational throughout this situation. We continue to make positive changes within the group to refocus on our core businesses and key markets, and to improve the group’s performance.” As the global and local economies recover, the group remains focused on maintaining a healthy balance sheet that offers a solid foundation for taking full advantage of growth opportunities. Importantly, with the economy projected to grow slightly in 2021, Credit Corporation is well-positioned to continue to serve customers and recover from the uncertainties of 2020.
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.