Egypt Independent: Business-Main news en Aramco tax cut lifts company's value by US$1 trillion, analyst estimates <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><p><span id="article-text"><span class="article-prime">Saudi Arabia&#39;s decision to cut <span class="vm-hook-outer vm-hook-default"><span class="vm-hook" style="color: rgb(0, 153, 0); border-color: transparent transparent rgb(0, 153, 0);">tax</span></span> paid by national oil giant Saudi Aramco has increased its value by US$1 trillion, an analyst estimated on Tuesday ahead of Aramco&#39;s initial public offer of shares, expected to be the world&#39;s largest.</span></span></p><p><span id="article-text">The government said on Monday it was cutting the tax rate for Aramco to 50 percent from 85 percent as part of preparations for next year&#39;s IPO, which would sell as much as 5 percent of the company.</span></p><p><span id="article-text">&quot;By drastically reducing the tax <span class="vm-hook-outer vm-hook-default"><span class="vm-hook" style="color: rgb(0, 153, 0); border-color: transparent transparent rgb(0, 153, 0);">rate</span></span>, more cash will go to the potential owners of Saudi Aramco compared to the government,&quot; said Espen Erlingsen, vice-president for analysis at Rystad Energy, an oil and gas consulting service based in Oslo and New York.</span></p><p><span id="article-text">&quot;Assuming long-term oil prices averaging US$75 per barrel, the valuation of the company increases from US$0.4 trillion to US$1.4 trillion,&quot; he said in a report.</span></p><p><span id="article-text">That is good news for the Saudi government, which hopes to raise money to cover a $79 billion budget deficit and invest in new industries as it tries to diversify the economy in an era of low oil prices.</span></p><p><span id="article-text">Deputy Crown Prince Mohammed bin Salman, who leads economic reforms, has said the IPO will <span class="vm-hook-outer vm-hook-default"><span class="vm-hook" style="color: rgb(0, 153, 0); border-color: transparent transparent rgb(0, 153, 0);">value</span></span> Aramco at a minimum of US$2 trillion. A number much smaller than that could jeopardize the offer and damage his own political position.</span></p><p><span id="article-text">Erlingsen calculated Aramco&#39;s value based on discounted free cash flow for each oil field. Under the new tax rate, much of the company&#39;s payments to the government are expected to be in the form of dividends, not tax.</span></p><p><span id="article-text">&quot;The total value of Saudi Aramco&#39;s revenue after costs is around US$3.4 trillion. With the old tax system, around 88 percent of the value went to the government through taxes and royalties, while with the new system around 60 percent of the profit goes to the government,&quot; Erlingsen said.</span></p><p><span id="article-text">He predicted oil prices would reach US$75 by the time of the IPO, which would be near the long-term price needed to justify the share prices of other large global oil companies.</span></p><p><span id="article-text">Global consultants Sanford C. Bernstein &amp; Co said in a report that since Aramco had not released detailed financial information, it was impossible to make a reliable estimate of its value.</span></p><p><span id="article-text">But they said the size of Saudi oil reserves, larger than those of other oil companies, suggested Aramco could look cheap even at US$2 trillion - although that figure excluded factors such as political risks.</span></p><p><span id="article-text">Using a different valuation method, enterprise value per flowing barrel, suggests a figure in the range of US$1 trillion to US$1.5 trillion, though the expected long life of Aramco&#39;s reserves compared with other companies means Aramco could command a premium to those numbers, Bernstein said.</span></p><p><span id="article-text">Investment bank Tudor, Pickering, Holt &amp; Co estimated a valuation of US$1.1 trillion for Aramco, assuming free cash flow of US$55 billion a year from its upstream operations.</span></p><p>&nbsp;</p><p><em><span id="article-text">(Reporting by Ron Bousso and Rania El Gamal; Writing by Andrew Torchia; Editing by Louise Heavens)</span></em></p><p>&nbsp;</p> Wed, 29 Mar 2017 08:35:00 +0000 Reuters 2477549 at sites/default/files/photo/2016/11/07/505446/a_saudi_aramco_employee_sits_in_the_area_of_its_stand_at_the_middle_east_petrotech_2016_an_exhibition_and_conference_for_the_refining_and_petrochemical_industries_in_manama_bahrain_september_27_2016..jpg Electricity Ministry mulls basing new increases on consumption level <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>A source with the Electric Utility and Consumer Protection Regulatory Agency announced that the agency has finalized proposals on a new increase in electricity rates, expected to be applied starting July 2017, al-Shorouk news website reported on Tuesday.</div><div>&nbsp;</div><div>The source told al-Shorouk that the low-income segments of electricity consumers have received great attention from the agency.</div><div>&nbsp;</div><div>An increase of 15 percent instead of 30 percent will be applied on the low-income segments, taking into account the current economic and living conditions, the source added.</div><div>&nbsp;</div><div>The Electricity Regulatory Committee agreed unanimously on the application of an increase from 35 to 40 percent on high-consumption segments, the source said.</div><div>&nbsp;</div><div>The application of an increase is inevitable on all the segments of consumers, due to the huge losses that the electricity sector has been suffering since the flotation of the pound, said the source, pointing out that losses amounted to LE1.45 billion.</div><div>&nbsp;</div><div>An official source with the Ministry of Electricity revealed that the expected increase to be applied on the first segment of clients, who consume between &quot;0 to 50 kW&quot; will be about 20 percent, which would save up to LE450 million per month of the losses incurred on the current prices.</div><div>&nbsp;</div><div>The increase in the second segment, consuming between &quot;51 to 100 kW&quot; will be 25 percent, which would save around&nbsp; LE 800 million per month; while the increase in the third segment, consuming between &quot;100 to 200 kW&quot; will be 30 percent, saving around LE3 billion per month. The increase applied on the fourth segment, consuming between &quot;201 to 350 kW&quot; will be 35 percent, saving around LE3.5 billion per month, according to the source.</div><div>&nbsp;</div><div>As for the increase that will be applied on the fifth segment, consuming between &quot;351 to 650 kW&quot;, it will be in the order of 30 percent, leading to savings of around LE2 billion per month. The increase in the sixth segment, consuming between &quot;651 to 1000 kW&quot; will be 30 percent, saving LE200 million; and in the seventh segment, consuming over 1,000 kW, the increase will be calculated at 20 percent, according to the official source.</div><div>&nbsp;</div><div>&nbsp;</div><div>&nbsp;</div> Tue, 28 Mar 2017 13:30:00 +0000 Egypt Independent 2477541 at sites/default/files/photo/2016/10/04/504802/electricity_meter_2.jpg CNN: Amazon buys Souq in big play for Middle East market <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>Amazon has had its eye on the Middle East for some time. Now it&#39;s finally made a move. It has agreed to buy the region&#39;s biggest e-commerce platform,</div><div>&nbsp;</div><div>&quot;Joining the Amazon family will enable to continue growing while working with Amazon to bring even more products and offerings to customers worldwide,&quot; Souq said in a statement.</div><div>&nbsp;</div><div>The statement did not disclose the size of the deal. CB Insights valued Souq at more than a billion dollars, after it raised $275 million from investors last year. Souq does not disclose financial information.</div><div>&nbsp;</div><div>Amazon had to beat off local competition for the online marketplace.</div><div>&nbsp;</div><div>Emaar Malls, an arm of Dubai&#39;s biggest real estate developer, said on Monday it bid $800 million for</div><div>&nbsp;</div><div>Founded 10 years ago by Ronaldo Mouchawar, Samih Toukan and Hussam Khoury, Souq has become the biggest player in the market. Mouchawar estimates online shopping in the Middle East was worth $20 billion in 2016.</div><div>&nbsp;</div><div>When Souq started out, e-commerce was virtually unknown in the Middle East. Back then, the company employed five people in Dubai. Now it has 3,000 workers across the Arab world and sells more than 8 million products in 31 categories.</div><div>&nbsp;</div><div>Analysts at Standard Chartered estimate that e-commerce in the region is growing by 30% each year, and that many markets remain untapped.</div><div>&nbsp;</div><div>The acquisition is expected to close this year.</div><div>&nbsp;</div><div>&nbsp;</div> Tue, 28 Mar 2017 10:37:00 +0000 CNN 2477539 at sites/default/files/photo/2015/06/11/501184/amazon.jpg Tesco handed £214 mn in penalties over false accounting <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><p>Supermarket Tesco has agreed to a fine and compensation costs totalling &pound;214 million ($268 million, 247 million euros) after an accounting scandal at Britain&#39;s biggest retailer, the Serious Fraud Office said Tuesday.<br /><br />Under a deal struck with the SFO over an affair stretching back three years, Tesco will not face prosecution.<br /><br />However, charges have previously been brought against three former Tesco executives, who face trial over alleged fraud and false accounting.<br /><br />&quot;Tesco... has in principle reached a deferred prosecution agreement with the UK Serious Fraud Office regarding historic accounting practice,&quot; the supermarket giant said in a statement.<br /><br />This &quot;is a voluntary agreement under which Tesco Stores Limited will not be prosecuted provided the business fulfils certain requirements, including paying a financial penalty of &pound;129 million.&quot;<br /><br />In addition, Tesco will compensate shareholders by around &pound;85 million in total.<br /><br />Tesco had been accused of overstating profits by &pound;326 million between February and September 2014.<br /><br />Following the incident, the company appointed outsider and former Unilever executive Dave Lewis to replace long-standing chief executive Philip Clarke and oversee a drastic restructuring of the group, which in recent years has also faced fierce competition in the UK from German-owned discount retailers Aldi and Lidl.<br /><br />&quot;Over the last two and a half years, we have fully co-operated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business,&quot; Lewis said in the statement.<br /><br />&quot;We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.&quot;<br /><br />Tesco is the world&#39;s third-biggest supermarket group after France&#39;s Carrefour and global leader and US giant Wal-Mart.</p><p>&nbsp;</p> Tue, 28 Mar 2017 09:24:00 +0000 AFP 2477533 at sites/default/files/photo/2017/03/28/507556/tesco.jpg