Today in business: Rand slumps amid US yield spike
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Rand slumps amid US yield spike
The rand has slumped by 4%, and is now on the wrong side of R15/$ after a surge in the dollar, triggered by nervousness about US bonds.
Yields on 10-year US government bonds spiked to the highest level in a year following weaker-than-expected demand in a bond auction. Investors fear a return of inflation, and fall-out from a surge in US government spending.
The rand was last at R15.06/$.
Gold Fields gets electricity licence
The National Energy Regulator (Nersa) has granted a licence to Gold Fields to develop a 40MW solar plant in Westonaria, which will provide around 20% of the South Deep gold mine's electricity.
Anglo 'making progress' towards SA coal exit
Anglo American reported a dip in profit for the year to end-December, with EBITDA of $9.8 billion, compared to $10.0 billion in 2019.
Its dividend for the year was $1.00 per share, compared to $1.09 from last year.
Output for the year was down 10% as strong performances from its Minas-Rio iron ore operation in Brazil and the Collahuasi copper joint operation in Chile helped partly offset the impact of shutdowns due to Covid-19.
Covid-19 lockdowns across southern Africa in the first half of the year impacted production at PGMs, Kumba, De Beers and Thermal Coal. Production was also affected by operational issues at Metallurgical Coal and strike action at the Cerrejón thermal coal operation.
Refined production of PGMs was impacted by an outage at the Amplats converter plant in the first half. De Beers’ rough diamond production decreased by 18% to 25.1 million carats (2019: 30.8 million carats), in response to lower demand due to the pandemic
Anglo says it is "making good progress" with its plans to exit from its remaining thermal coal operations in South Africa - "a demerger being our likely preferred exit option, with a primary listing on the Johannesburg Stock Exchange for the demerged business."
ABInbev sales, profit hit in 2020
Anheuser-Busch InBev saw its revenue fall by almost 4% in the past year, while EBITDA was down 13%.
In the fourth quarter, its South African sales volumes declined slightly after an alcohol sales ban came on 29 December, hitting a "key selling week for beer".
It also saw a shift to more affordable brands and bulk returnable packages, particularly benefitting Carling Black Label. Flavoured alcohol beverages, Brutal Fruit and Flying Fish, "outperformed"
Discovery profit down 10%
Discovery's headline profit fell by 10% for the six months to end-December, and the company didn't declare a dividend "due to the uncertain and potentially volatile economic environment" caused by the pandemic.
The company established Covid-19 provisions of R3.4 billion, but said that utilisation of these provisions has been relatively low by the end of this reporting period. But in SA, the second wave of infections was having a more significant impact on Discovery's target market compared to the first wave and, to ensure prudency, Discovery Life has provided an additional R153 million claims provision.
Large loss for City Lodge
City Lodge has warned that it will suffer a headline loss of up to R247 million for the six months to end-December. The company said the gradual easing of lockdown restrictions between July and November 2020 led to a steady demand-based re-opening of the company’s hotels indicating some signs of recovery, albeit slow. This was however short-lived with the surge in infections in late November 2020 through to January 2021, and the consequent move back to stricter lockdown measures under Alert Level 3.
Liberty expects a loss
Liberty expects to report a loss for the year to end 2020, in part due to a pandemic reserve of R3 billion that was created to honour its Covid-19 commitments.
Barloworld chairperson quits over pay
Barloworld chairperson Neo Dongwana is stepping down after just a year in the position, citing the shareholder vote against her remuneration at the industrial company’s annual general meeting earlier this month.
In a note to shareholders on Thursday, Barloworld said Dongwana had decided to at the end of her tenure in May despite having the option to extend her it for another three years because she believed that was the right decision.
At the recent AGM, Dongwana narrowly missed the required 75% needed to secure approval for her fees, Fin24 reportedd.
The article has been corrected to reflect that Neo Dongwana is chairperson, not CEO.
Implats posts 300% profit hike
Implats has posted a 328% increase in its half-year headline profit thanks to a spike in platinum price. Its ouput increased by 11%.
A dividend of R10 per share was declared for six months, compared to R1.25 in the previous year.
Woolworths profit grows 60% - but no interim dividend
This morning, Woolworths reported 6% growth in half-year turnover, with a sharp 60% increase in headline profit - but no interim dividend was declared (from almost 90c in 2019). Woolworths Food sales jumped by 11%, with online sales up 160%. But local fashion, beauty and home sales dropped by 11%. David Jones sales in Australia also fell by 9%, while Country Road grew by 7%.
Foreign sales boost Distell
Distell saw its half-year revenue grew by almost 4% to R15 billion – thanks in part to strong international sales, which climbed by more than 15%. Its headline profit grew by 12%.
Aspen debt declines
Pharmaceutical group Aspen expects that its half-year headline profit will grow by between 8% and 13%, with revenue growth up to 18% stronger. Its net borrowings have declined from R35 billion in June to R28 billion.
Spur sales down 30%
Spur reported that its restaurant sales declined by almost 30% to R2.9 billion for the six months to 31 December 2020, compared to R4.1 billion in 2019.
Imperial turns focus to Africa
The logistics company Imperial released interim results on Tuesday for the six months ended 31 December 2020. Its revenue increased by 15% to R26.36 billion, while its earnings declined by 2% to R2.55 billion. The company is selling its international businesses to focus on Africa.
Sibanye buys stake in Finnish lithium group
In a 30 million euro deal Sibanye-Stillwater has bought a 30% stake in the Finnish lithium producer Keliber. The Finnish government is the largest shareholder in Keliber.
Sibanye-Stillwater says its partners in Keliber want to create the first vertically integrated lithium producer in Europe, which will give it a solid position in the demand for batteries.
Filipino conglomerate, UK fund invest in Tyme
African Rainbow Capital Investments announced that two international investors have taken minority stakes in Tyme (which owns TymeBank in SA).
A fund managed by UK-based Apis Partners will take 14.9%, while JG Summit Holdings, a conglomerate in the Philippines, will hold 5.1%. Together, their investments will total R1.6 billion.
TymeBank was launched in February 2019, and is on track to reach 3 million customers by March.
Motus sees growth in used car sales, but demand for new vehicles wilts
Motus, an importer and seller of the Hyundai, Renault, Kia and Mitsubishi brands in SA, Australia and the UK, saw a 16% fall in the number of new vehicles (57,503) sold in the past six months, while there was a 12% increase in pre-owned vehicles (43,160).
Its interim revenue improved by 6% in part due to sales of pre-owned vehicles in South Africa. This was partly offset by the reduced revenue in the car rental business and lower workshop activity levels.
KAP sees strong demand in the timber, bedding
KAP - which operates in the timber, automotive, bedding, polymer and logistics sectors under brands such as PG Bison, Feltex, Restonic, Safripol and Unitrans - saw its half-year revenue fall by 1% to R12.1 billion, but headline earnings rose 2%.
“Most of our operations have performed well for the half-year to December 2020,” says Gary Chaplin, CEO of KAP , “supported by particularly strong demand in the timber, bedding and polymers businesses. We are very pleased with how quickly robust demand has returned to our markets
Bidcorp's profit halves as Europe bites
The global foodservice group Bidcorp saw its headline profit fall 46% in the six months to end-December. The company says its performance in Europe and the UK started deteriorating into September due to government lockdowns. But Australia, New Zealand, and Asia have performed well.
Harmony sees 336% profit hike
Gold miner Harmony saw a 336% increase in its half-year net profit (to R5.8bn) thanks to the sharp increase in the gold price. It declared an interim dividend of 110c - there was no dividend in the previous year.
Cost savings, higher iron ore prices boost Kumba
Kumba Iron Ore's annual profit grew by 40%, with a strong increase in dividends. Higher iron ore prices and costs savings of R1.3 billion helped to deliver a record EBITDA of R45.8 billion. The lifespan of its Sishen project may be extended to 2039 thanks to a new R3.6 billion project, which was recently approved.
Aveng in the black again
The construction and engineering group Aveng reported a half-year headline profit of R109 million - from a loss of R205 million in the same period in the previous year.
This was despite a loss of R155 million from its SA construction business. But its mining, and construction activities in Australia and Asia grew.
Amplats plans 20% increase in output
Anglo American Platinum (Amplats) saw its revenue rose 38% last year, with headline profit up 63% to more than R30 billion - thanks to the dollar price for platinum group metals gain 51%. Its dividend rose by 63%.
The company also announced plans to increase its production by 20% in 2030.
Shoprite strikes deal to sell Nigerian subsidiary
Shoprite has concluded the terms of sale for its Nigeria subsidiary after 15 years in the country.
The retailer decided to divest due to regulations that restricted foreign exchange and a ban of many imports created by an underground economy that made it difficult for companies who play by the book to compete, Fin24 reports.
Super Group bolstered by European businesses
Logistics and car dealership group Super Group's share price climbed by more than 6% after the group reported a 6% increase in its half-year revenue thanks to a strong performance in its European and UK businesses.
Headline earnings per share increased by almost 5%.
Dealerships in SA saw sales volumes decline by 13% - but revenue increased by 5.2% mainly as a result of a 7.3% increase in used vehicle sales volumes and increased new vehicle prices, partially offset by a 11.4% decline in new vehicle sales volumes
Its supply chain business in Africa was hit by lower transport volumes, and border congestion over December.
German property group to list on JSE
Deutsche Konsum REIT-AG, a German property company and real investment trust (REIT), will list on the JSE on March 8th.
With a market capitalisation of some €557 million (R10 billion), the company has a portfolio of 165 convenience stores in Germany, and it's listed on German stock exchanges.
“We want to provide South African investors with an opportunity to participate in the DKR’s income and capital growth potential and an additional local platform to invest and trade in the company’s shares," DKR CEO Rolf Elgeti said.
“The company was initially attracted to South Africa by its deep capital markets, the understanding of the property space by the investor community and its well-regulated exchange.”
Grindrod hit after loss
Grindrod's share price slumped by more than 7% after the company warned that it would report a headline loss of between R138 million and R168 million for the year to end-December.
Its ports and terminals business remained stable, and its coastal shipping, container depots and multi-purpose terminal businesses saw earnings growth of 15%, thanks to a buoyant citrus season and strong mineral volumes. But the company took a R330 million impairment in its private equity portfolio, which consists of private and property equity investments and loans provided to KZN North Coast property companies.
Sasol doubles profit
Sasol has doubled its half-year profit to R15.3 billion - despite a 23% fall in the oil price in rand. The company says this was thanks to strong cash cost and working capital management.
The company has abandoned plans for a rights issue, but dividend payments remain suspended.
Sasol 6m to Dec. NO RIGHTS ISSUE. This will be well received by market. Debt down dramatically. Actual underlying profit seems ok. Big distortions due to non trading items. Obviously no dividend— Wayne McCurrie (@WayneMcCurrie) February 22, 2021
Sasol says diesel usage is back to pre virus levels. We may all be underestimating agric contribution to economy. Maize price is at multi decade high. Normally maize gets to around a R6000 high, is now R8000. Along with a record crop, will contribute significantly.— Wayne McCurrie (@WayneMcCurrie) February 22, 2021
AngloGold's dividend up fivefold
AngloGold Ashanti also reported this morning that its half-year profit from continuing operations increased 160% year-on-year to $946m, with its dividend up more than fivefold.
Fraud storm hits GEMS
News24 reports that the Government Employees Medical Scheme (GEMS), over a period of five years, paid more than R300 million to companies in which its executives had direct financial interests.
Absa has warned that its headline profit will fall by 55% to 60% for the year to end-December, while Santam also warned that its profit will down by between 42% and 52% - due in big part to a spike in business interruption claims. “This was offset to some extent by a benign claims environment which impacted positively on the motor book and the strong performance of the specialist classes of business, notably engineering and agriculture,” the company said.
Massmart's estimated 2020 lost to the coronavirus: R6 billion
For the 52 weeks up to nearly the end of December 2020, the coronavirus pandemic cost it an estimated R6 billion, the owner of Game and Makro said on Friday.
That is "including extended restrictions on normal trading of liquor".
For comparable stores, its sales were down 7.5% compared to 2019. But the impact on the bottom line was somewhat blunted by rent relief from some landlords.
Gold price weakest in months
Gold prices hit a seven-month low overnight. Rising US bond yields and greater optimism about global growth are undermining the appeal of the metal.
Truworths to launch new cheaper chain
Truworths reported a 7% fall in its headline profit for the six months to end-December, with sales in SA and other African countries down almost 7% to R7.3 billion. (Cash sales rose 2%, while account sales – which account for 70% of total sales - fell 10%.) Sales at its UK-based Office stores slumped by 25%. Truworths is launching a new “value-focused” chain to compete with cheaper clothing retailers.
Sibanye-Stillwater to invest R7bn in SA mines
Sibanye-Stillwater has approved R6.8 billion in investments in platinum group metals (PGM) and gold projects in South Africa following a bumper year.
Profit attributable to owners of Sibanye-Stillwater increased to R29.3 billion from only R62m n the previous year, thanks to rallying commodity prices.
The investment in local mines should create 7,000 jobs. Sibanye also has operations in the US and a platinum joint venture it operates in Zimbabwe with Implats.
Fourfold increase in Gold Fields profit
Gold Fields has increased its annual headline profit by more than fourfold to $729 million (R10.7 billion).
Its total dividend for the year of 480c is 200% more than its dividend last year.
Its local South Deep mine increased its gold output by 2%, which was ahead of expectations. The mine generated net cash of $34 million (R558 million) in 2020, more than double that generated in 2019.
The Department of Environment, Forestry and Fisheries will today visit the Sasol plant in Secunda which is suspected to be behind a sulphuric smell that is enveloping parts of Gauteng and Mpumalanga since the weekend. Residents in both provinces took to social media complaining about the unbearable smell.
ArcelorMittal workers dead - report
EWN reports that three workers died after they were trapped in a control room following an explosion at ArcelorMittal's Vanderbijlpark
Massmart sale of 8 stores approved
The competition authorities approved Massmart’s deal to sell eight stores to Devland Cash and Carry. The transaction will save 640 jobs.
Tiger Brands bemoans 'poor' January
Tiger Brands - which owns brands like Ace, Beacon and Albany - reported that its sales for the quarter to end-December rose 12.1%, underpinned by a 9% increase in product prices and volume growth of 2.6%.
But January saw "a particularly poor performance", which cut the growth in group revenue for the four most recent months to 9.4% - mainly on the back of higher prices.
"It is too early to conclude whether the lower consumer demand levels evident in the month of January reflect an even more challenging environment than what was experienced over the past year," the company said. Sales of its bread, breakfast porridge, deciduous fruit and Ace Instant products were hit hardest..
Still, its expects its headline profit for the half year to end-March to be between 35% and 45% higher
BAT sees bigger profit despite SA cigarette ban
British American Tobacco – owner of brands like Dunhill, Kent and Lucky Strike – saw an increase in its headline profit from 267.3p to 294.4 despite the pandemic, and a cigarette sales ban in South Africa.
Its revenue for the year was flat. The company says cigarette volumes grew in the US, Brazil, Turkey, Bangladesh and Russia, but this was more than offset by declines in sales in duty-free and travel shops, the ban in South Africa and in Indonesia, where cigarette excise taxes were hiked.
After buying the South Africa e-cigarette producer Twisp in 2019, the company wrote off £11 million in the company’s value last year
Collapse at ArcelorMittal control room
The search is on for three employees after a portion of a 90 meter stack collapsed at a coke battery of ArcelorMittal in Vanderbijlpark, Fin24 reports.
The incident took place in the early hours of Wednesday morning.
"A portion of a 90m stack at one of the operation’s coke batteries failed in the early hours of the morning on Wednesday, 17 February 2021, and fell onto the coke battery control room in which the three employees were working."
Strong sales at Dis-Chem
Pharmaceutical group Dis-chem saw revenue growth of more than 12% to R11.6 billion for the 22 weeks to 2 February.
Dis-Chem released an update to shareholders on Wednesday and reported that stores in convenience centres are still outperforming those in more crowded malls due to Covid-19. A change in sales mix has put pressure on profit margins, which remain below pre-pandemic levels, the group said.
"Healthcare, vitamins and chronic drug sales reported remarkable growth as consumers continue to focus on preventative healthcare," said Dis-Chem CEO Ivan Saltzman
Dis-Chem has two operating segments - retail and wholesale. Retail revenue increased by 10.3% to R10.4 billion, while wholesale revenue grew by 20% to R8.6 billion.
IRBA CEO resigns
The Independent Regulatory Board of Auditors’ CEO Jenitha John has resigned after only seven months in the job. IRBA has been rocked by a series of board resignations, apparently in protest against John’s appointment. Previously, she was chair of the audit committee at Tongaat Hulett, which was hit by an auditing scandal and suspended from the JSE as a result.
Electricity prices to shoot higher
South African power prices will rise by almost 16% after the Gauteng High Court ruled that R10 billion should be added to Eskom's allowable revenue in the 2021/22 financial year. Energy regulator Nersa and Eskom have been involved in a legal battle about the hike. Nersa will appeal the ruling.
Spar: Strong growth overseas – but SA looks weak
Spar’s sales rose by 9.8% to R43 billion for the 18 weeks ended 29 January.
It saw strong growth in its sales at overseas subsidiaries - Ireland (+4%), Switzerland (14%) and Poland (38%) – while in Southern Africa its grocery sales rose by only 2.8%. Local liquor sales fell by 18% due to local alcohol restrictions. But Build-it sales growth increased by 25.6%, as demand for building materials remained strong, driven by investment in home improvements as consumers spent more time at home due to the pandemic
Spar trading update. SA was poor even if lost alcohol sales taken into account. Grocery business increased 3% with inflation of 5%, ie went backwards by 2% volumes. As we are consistently noting, diy was fantastic. Overseas did very well especially Switzerland and Poland.— Wayne McCurrie (@WayneMcCurrie) February 16, 2021
Fat dividend from DRDGold, BHP
DRDGold has declared an interim dividend of 40c per share for the six months ended 31 December 2020 - 60% more than for the same time last year .
Its revenue increased by 41% to almost R3 billion, and operating profit doubled due largely to the average rand gold price, which was 42% higher at R988,998/kg.
But the higher gold price was "substantially" offset by the impact of a 2% decline in overall gold production. Its gold-from-tailings Far West Gold Recoveries projects saw the biggest hit. This was due to reclamation in the lower-grade central portion of the Driefontein No. 5 dump.
BHP has reported a 15% increase in its half-year revenue, with headline earnings per share flat. But its interim dividend was also hiked by 55%.
JSE at record high
The JSE's all-share index rallied to a record high overnight, amid renewed global optimism about post-pandemic growth. Oil prices spiked amid tensions in the Middle East. Yemen's government (supported by the Saudi state and others) clashed with Iran-backed rebels, leaving dozens dead.
Checkers sales rocket 11%
In a trading update, Shoprite reported that its sales for the six months to 27 December rose by almost 5% to R83.4 billion.
Its South African sales – which represent almost 80% of total sales – rose by 5.6%. Checkers and Checkers Hyper reported sales growth of 11.1%.
Its LiquorShop business' sales declined by almost 22% after the shops were forced to close due to alcohol sales restrictions in lockdown.
Shoprite expects that its headline profit will be up by between 12.5% and 22.5%.
Shoprite’s share price rose by half a percent to R145.02.
KPMG stops consulting work for JSE-listed companies
KPMG South Africa has announced that it will not be taking up any non-auditing work for JSE-listed companies.
The auditing firm which is still cleaning up its image after the state capture and the VBS scandals said it will cease all future non-audit-related services to its listed audit clients from 31 March 2021, Fin24 reported.
The fact that firms have been providing consulting services to the same clients they are supposed to audit has largely been blamed for the recent scandals accounting, not just in South Africa.
Ex-Steinhoff auditor Deloitte to pay R1.3 billion
Steinhoff's former auditor Deloitte has agreed to pay up to R1.3 billion (€70 million) in compensation to claimants who are suing the SA company.
Deloitte signed off on Steinhoff's books while the company suffered accounting irregularities, including massive overstatements of profit.
Steinhoff is facing more than 90 separate legal claims in South Africa, Germany and the Netherlands. Deloitte's payment will be used to help settle claims.
According to its latest term sheet, Steinhoff has proposed to pay out a total of roughly €900 million (about R16 billion) to settle all the claims it is facing, Fin24 reported.
Rand at best level in more than a year
The rand is currently trading at R14.48/$ - its best level since end-January 2020, before South Africa went into lockdown. It's trading at R20.10/pound and R17.56/euro.
"Declining Covid-19 infections in the US, as well as larger stimulus expectations, has raised hopes of a faster economic recovery in the US and fuelled risk appetite," says Andre Cilliers, Currency Risk Strategist at TreasuryONE.
"A sustained break below 14.5000 would open a possible move to 14.3500 in the short term although the rand is getting into overbought territory and we could see a correction at some stage."
Momentum warns of 'severe' Covid claims
In a trading update this morning, Momentum Metropolitan said its headline profit for the six months to end-December will fall by between 30% and 50%.
The insurer says that it had to increase its reserves by R850 million after the impact of the Covid-19 pandemic and the resultant deterioration in economic conditions was "more severe than what was initially modelled". Covid-19 related claims were especially severe in January 2021, the company said.
There were a few new announcements in President Cyril Ramaphosa’s fifth State of the Nation Address on Thursday evening - including the three-month extension of both the Special Covid-19 Grant of R350 and the UIF's TERS benefit (for those sectors that have not been able to operate). He also announced the launch of an anti-corruption council.
Air Namibia bust
The Namibian government has approved the liquidation of its airline, Air Namibia, which halted all flight operations from Thursday.
Manufacturing, mining shrank by more than 10% in 2020
Manufacturing production decreased by 11% in 2020, compared to 2019, new Statistics SA data shows. All 10 manufacturing divisions reported negative growth rates over the past year., Fin24 reports
Total mining production was 10.7% lower in 2020 compared with 2019. The 10.7% decrease in annual mining production followed a decrease of 0.5% in 2019 and a decrease of 1.5% in 2018, Stats SA said in a separate report on mining production.
ArcelorMittal pares loss
ArcelorMittal South Africa reported a headline loss of R2 billion for the year ended 31 December 2020, compared to a loss of almost R3.3 billion in the previous year. International dollar steel prices fell by 4% (6% in rand), and its steel production halved to 2.3 million tonnes.
Its share price fell by 15% on Thursday - after a monster rally in recent months:
Italtile sees surging sales growth
Italtile has seen a 14% increase in sales, which reached R6,2 billion in the six months to end December. Its headline earnings rose 39%. The chain has benefited from an increase in DIY and house improvements as many workers are working from home.
Platinum hits six-year high
Platinum is at its highest level in six years, rallying to above $1,200 an ounce, as investors expect a recovery in industrial demand and stricter emissions rules - which drives demand for the metal, as it is used in pollutant-cutting catalytic converters in cars.
Gold Fields profit up more than 300%
Gold Fields says its headline profit for the year to end-December will be between 305% to 325% higher than the previous year.
Its production rose by 2% - despite lockdowns due to the pandemic, and the group received a large boost from the higher gold price.
Its share price was up almost 4% to R144.65.
Coca-Cola South Africa gets new boss
Phillipine Mtikitiki has been appointed as Coca-Cola Africa’s Vice President for its South Africa franchise.
Prior to her appointment, Mtikitiki was the Vice President and General Manager for the East and Central Africa regions.
“I am excited to lead the South Africa Franchise at this pivotal time in its upward trajectory. This is a market where our high performing teams, drive for innovation and consumer-focused brands are supported by a strong customer base and robust growth opportunities, she said
She joined Coca-Cola in 1998 as a graduate associate, and holds an MBA from Henley Business School, a bachelor’s degree in business administration and Honours in Economics from the University of KwaZulu-Natal.
Phillipine takes over from Luis Avellar who has been appointed as president of Coca-Cola's southern operations in Latin America.
Load shedding is back
Stage 2 load shedding was implemented from 22:00 on Tuesday night until 05:00 Wednesday, in order to replenish emergency generation reserves.
Eskom says the system is still severely constrained after breakdowns.
Implats profit up more than 300%
In a trading update for the six months to end-December, Implats projected that its headline profit will be between 318% to 338% higher – from R3.4 billion to between R14.105 billion to R14.780 billion.
This was thanks to higher production, as well as “robust dollar pricing" for platinum group metal prices, together with rand depreciation.
Its share price, which gained 43% over the past year, dipped slightly after the profit update.
Trellidor profit up to 21% higher
Trellidor is expecting an increase in its headline profit of between 17% to 21% for the six months to end-December.
This is thanks to “turnover growth and control of overheads”, the company says – as well as a share buy-back which has resulted in fewer shares in issue.
Metrofile profit up, debt down
The local documents storage company Metrofile expects a 9% to 22% increase in its headline profit for the six months to end-December.
Its net debt is expected to fall by up to 18% to below R500 million.
As I've been writing & breaking story's for months my expectations of many small caps trading updates was far more buoyant than market was expectingArgent, Cashbuild, Italtile, Trelkidor, Metrofile etc & a few more yet to comeMarket has missed the boat here & now catching up— Smalltalkdaily Research (@smalltalkdaily) February 9, 2021
MTN sells stake in Belgian telecom group
MTN is selling its 20% stake in the Belgium group Belgacom International Carrier Services (BICS), which manages telecom cables and satellites to handle calls and internet traffic, for R1.8 billion.
The telecommunications group Proximus, which is part-owned by the Belgian government, will buy MTN’s stake. Another shareholder, Swisscom, will also sell its 22% stake to the Belgian group.
MTN will use some of the proceeds to settle its dollar-denominated debt.
“The sale represents further progress in MTN's stated asset realisation programme (ARP), which aims to reduce debt, simplify its portfolio, reduce risk, improve returns and unlock value.”
MTN received the stake in BICS in 2009 as part of a deal to merge its own international carrier services with the international company.
AngloGold profit to jump by more than 150%
AngloGold Ashanti expects its headline profit to jump by at least 150% in the year to end-December. This is thanks to a 27% increase in the gold price, with weaker local currencies in the countries where it operates.
Last year, after more than a century in SA, AngloGold sold the last of its local businesses, in a R4.4 billion transaction with Harmony.
Rand on a tear
The rand rallied to R14.81/$ on Tuesday morning. US Treasury secretary Janet Yellen is urging Congress to pass a $1.9 trillion stimulus package after recent US unemployment numbers disappointed. The massive package, which will add to the US debt burden, should weaken the dollar over time.
Nedbank hit after Regiments report
Nedbank’s share price fell almost 9% on Monday after the amaBhungane investigative journalism centre reported on its transactions with Gupta-linked firm Regiments Capital. The bank on Monday told staff it had acted within the law, and had never found any corruption while looking into transactions with state and city entities. But the report paints an unflattering picture of a bank that took huge profits on suspect deals, legal or not.
Amplats profit to rocket despite output hit
In a trading update, Anglo American Platinum projected that its headline profit would increase by between 49% to 69% for the year to end-December. This was thanks to a 71% increase in the rand price of metals - which counteracted the impact on its output due to lockdown and the temporary closure of the Anglo Converter Plant (ACP) during the year.
Its share price jumped almost 3% on Monday.
Telkom rallies after update
Telkom released its trading update for the nine months to end-December, which showed a 41% increase in mobile service income - although overall revenue was flat. Its mobile subscribers climbed by 27% to more than 10 million, but its fixed broadband subscribers declined by 16% to 617,000.
Its share price rallied by 12% to R41.40.
Telkom market update. Massive growth of 41% in mobile revenue. Earnings gross margin growth of 9%. Good free cash flows if exclude severance packages.— Wayne McCurrie (@WayneMcCurrie) February 8, 2021
Wow #Telkom!- Mobile subs now 14.9 million - Mobile rev +40.7% YTD- Gyro rev +6.2% YTD (with deal likely)$JSETKG has three big days up and then delivers a knock out trading statement with the stock jumping another +10% today.Who would have known (cough) I mean thought. pic.twitter.com/jaliI6UtE4— Gary Booysen (@GaryBooysen) February 8, 2021
Brent breaks through $60
On Monday, Brent crude oil traded above $60 per barrel for the first time in more than a year. Oil producers, including Saudi Arabia, have pledged to trim their output, while demand is on the increase as the global economy picks up, Bloomberg reports.
The booze ban may not be that terrible for Nampak – but Netcare keeps feeling the pandemic
Two trading updates showed the starkly different ways in which different sectors are experiencing the pandemic.
Packaging company Nampak said its second-quarter results would show the impact of the most recent ban on alcohol – but implied it may not be catastrophic. The extent “depends on the level and pace of restocking by consumers following the upliftment of the ban,” it said.
In its first quarter of 2021, revenue was up 1%.
For hospital group Netcare, on the other hand, the coronavirus impact show across a whole spread of revenue lines.
In the first quarter of 2021 it recorded R86 million in “Covid-19 related costs”, said Netcare. The rental payments from doctors with rooms in its offices had normalised, it said – but “parking revenue and revenue-based rentals from pharmacies and coffee shops have remained under pressure”.
Net1 sales hit by lower prepaid sales
Net1 UEPS, which provides transaction processing services, including payment and bill payments in South Africa, reported a 12% fall in revenue in the past quarter due to fewer prepaid airtime sales and lower account fee revenue.
The company suffered a net loss of $33.5 million (R502 million) for the past quarter, from $4.5 million in the previous year.
There was a net increase of 44,000 EasyPay Everywhere (EPE) account holders, the first quarterly increase in eight quarters.
Caxton now owns 31% stake in Mpact
The community newspaper and publishing group Caxton now owns a 31% stake in the paper, packaging and recycling business MPact.
Caxton has been steadily building its stake in Mpact for weeks, and is now the largest stakeholder in the group.
Harmony employee dies in mine
A Harmony employee was fatally injured on Wednesday, following a seismic event that triggered a fall of ground at its Target mine in Welkom.
Greyhound, Citiliner close down
Bus operator Greyhound announced on Wednesday that it - as well as its cost-effective offering Citiliner - was closing operations.
Announcement: Greyhound and Citiliner are closing operations. Services will run until 14 February 2021. Passengers with tickets booked for services after this date will be refunded. For assistance with refunds, contact Call Centre: 087 352 0352 or email: email@example.com. pic.twitter.com/n6kFJ0uQaO— Greyhound (@GreyhoundRSA) February 3, 2021
Hulamin rockets after trading update
The KZN-based aluminium rolling company Hulamin released a strong production update for the past year - which triggered a 9% rally in its share price on Wednesday.
The company reports an improvement in local demand for its rolled products after the SA government imposed a 15% import duty on aluminium rolled products into South Africa was imposed in December.
Liberty profit down 20%
Liberty warned that its headline profit for the year to end December will be up to 20% lower than in the previous year. Last year, Liberty warned that its results were hit by people losing their jobs, and withdrawals from retirement schemes. Its share price is down more than 40% from a year ago, but on Wednesday gained a percent.
Sappi retreats after update
In a trading update, Sappi reported that its sales were down 11% in the quarter to end-December, with the company suffering a headline loss from a profit in the same period a year before.
However, its EBITDA was better than expected as profitability in all reporting segments was better than forecast.
The improvement was due mainly to dissolving pulp markets and graphic paper demand in North America recovering at a faster rate than anticipated.
On Tuesday, Sappi's share price hit its highest level in a year. It was last trading a percent lower on Wednesday.
Booze stockpiling boosts Distell
Although Distell – producer of Amarula, Savanna, Hunter's Dry, Durbanville Hills and Nederburg – lost 41 trading days due to alcohol sales restrictions in South Africa in the six months to end-December, its revenue from South Africa was basically unchanged from the same period in 2019. The company says customers opted for “spirits and mainstream wine, driven by in-home consumption and stockpiling in fear of unexpected alcohol bans in South Africa”.
In the rest of Africa, the company saw a 20% rise in revenue, with sales in Nigeria up 23%. Its overseas business saw 15% revenue growth, with Amarula delivering strong volume growth.
$JSEDGH @distellgroup H1 trading updateI understand the market was expecting a good #DGH trading update (BUT) they were NOT EXPECTING one THIS GOODHEPS +8.6% - 13.6% (595.5cps - 623.0cps)Despite booze ban, despite Covid-19, despite ALL thrown at #DGH they have solid results https://t.co/dEaIluXX7S pic.twitter.com/MR6AcP3KXC— Smalltalkdaily Research (@smalltalkdaily) February 3, 2021
Ford to invest almost R16bn in SA
Automobile manufacturer Ford will invest R15.8 billion in its South African manufacturing operations in Tshwane. With this investment, Ford’s Silverton Assembly Plant is expected to generate revenues exceeding 1.1% of SA’s GDP. The plant will be able to produce 200,000 vehicles a year. The plant will produce the all-new Ford Ranger pickup trucks, as well as the Volkswagen Amarok trucks as part of the Ford-VW strategic alliance.
The Silverton plant is one of five Ford facilities throughout the world that assembles the Ranger model.
Some 1,200 jobs will be created.
'Sudden' school closure hit Curro learner registration
In a trading update, Curro has warned that its headline profit for the year to end-December will be down by between 35.2% to 43.5%.
The private school education company was hit hard by the pandemic and lockdown, not only as its schools had to close for many months - but also as the economic contraction hit parents' ability to afford its fees.
In the second half of the year in 2020, the number of learners in its schools shrank by 4.1%.
Curro schools opened their doors on 15 January this year, but after "engagement" with government, closed again this week. Public schools will re-open their doors on 15 February.
"Schools shifted seamlessly to online teaching for its learners, but the sudden lockdown-related closure disrupted learner registration processes for the new academic year."
New registrations for the academic year are "satisfactory within the current circumstances", Curro said.
French asset manager buys 5% stake in Discovery
Comgest, the French investment manager, now owns a 5% stake in health and life insurer Discovery, the company said in a statement to the JSE.
After falling below R60 at the height of pandemic panic in March last year, its share price is currently trading at around R128.
Vodacom warns against delays in 5G auction
This morning, Vodacom released a trading update for the three months to end December. In South Africa, service revenue (R14.3 billion) rose 5.4%, while revenue from other countries fell slightly to R5.5 billion. The number of people who now use its mobile money service M-Pesa rose by 8% to almost 16 million, and monthly M-Pesa transactions now come to $24.2 billion, up 58% from a year before. After both MTN and Telkom launched separate legal attacks on the key Icasa auction of spectrum, including for 5G, in SA, Vodacom said further delays to this process will likely have a negative impact on consumers.
New car sales down, but SA exports climb
New vehicle sales (of 34 784 units) in January were down almost 14% compared to the same month last year, according to the National Association of Automobile Manufacturers of SA (Naamsa).
"Although the current low interest rates, coupled with low inflation, could be regarded as building blocks to stimulate the new vehicle market, a full recovery to pre-COVID-19 new vehicle sales levels could take around three years," Naamsa said.
But while local vehicle sales were down, SA saw a second consecutive month of strong exports, rising to almost 23,000 units – up 40% compared to January 2020.
Virgin Active SA is liquid, Brait says, but operations in the UK, Italy, and Bangkok need financing
In a trading update, parent company Brait said Virgin Active in South Africa had taken a hit from newly-tightened lockdown restrictions at the end of December, just as it was seeing a return to normality.
But the gym chain is cashflow neutral in South Africa, and it has the cash to fund itself.
That is not true of operations in Europe and Asia Pacific. Gyms in Bangkok just opened again, but Brait is still talking about the need for financing there, plus in the United Kingdom and Italy, where lockdowns drag on.
Orion wants immediate halt in JSE trading
Australian-based Orion Minerals requested an immediate trading halt in its shares on the JSE.
“The reason for the trading halt is that Orion anticipates making a material announcement in relation to the completion of an option agreement to acquire a major copper project in the Northern Cape Province, South Africa.”
Orion wants trading in its shares to be halted until it makes the announcement, which is expected on Wednesday.
Orion’s biggest project is the Prieska Copper-Zinc mine in the Northern Cape.
Reddit army targets silver
After an army of small investors drove the price of US gaming retailer Gamestop to dizzying heights – and intentionally cost hedge funds billions in losses - they apparently turned their attention to silver over the weekend. Silver futures are trading 7% higher – CNBC reports that this is the biggest move since 2013. Reddit forum WallStreetBets now has a number of discussion groups dedicated to silver.
Huge Group clarifies bid
Following its unsolicited and surprise R800m bid for software group Adapt-IT, the Huge Group this morning clarified some aspects of the offer. It said that shareholders who hold almost 80% of Huge have already voted in favour of the takeover. Also, it said that its offer to buy shares becomes effective if investors holding only 0.01% of Adapt-IT shares accept the bid.
Ster-Kinekor in business rescue
Ster-Kinekor filed for business rescue process on Friday, with EY South Africa partner Stefan Smyth appointed to manage the process. The chain has been hit hard by the pandemic. Cinemas will remain open during the business rescue.
Arcelor Mittal loss to shrink by R1bn
The steel manufacturer ArcelorMittal South Africa has issued a trading update for the year to end-December, which shows that its headline loss for the period will shrink by at least R1 billion - in the previous period, the company suffer a R3.3 billion loss.
Spur sees 30% drop in sales
Spur reported a fall of almost 30% in its restaurant sales to R2.9 billion in the past six months. The company says sales were strong in October, after lockdown restrictions started to fall away. But in December, the alcohol sales ban hit restaurant visits.
Of its restaurant brands, John Dorys saw the steepest drop over the six months, while Rocomamas was least affected:
Sasol says headline profit doubled
In a trading update, Sasol said its headline profit for the six months to end-December may have doubled thanks to cost control - and despite continued weakness in the prices of oil and chemical products, and lost production due to hurricanes in the US Gulf Coast. But its Ebitda – a profit measure before the impact of interest, tax, depreciation and amortisation – may have fallen by as much as 10%.
Eskom tariff hikes of up 11% expected
The National Energy Regulator of SA has allowed Eskom to collect an additional R6 billion from its customers, which could see it implement tariff increases of up to 10.95% from April.
Mboweni dissolves IRBA board
Finance Minister Tito Mboweni has dissolved the board of South Africa's auditing watchdog, IRBA, after a bout of director resignations resigned since its new CEO was installed. Fin24 reports that several board members may have resigned in protest at the appointment of Jenitha John as CEO. John headed the audit committee of Tongaat Hulett, which has been been mired in accounting scandals.
Musica to close its doors
Clicks has announced the end of its entertainment retailer Musica, with all of its 59 stores closing their doors by end May.
Clicks bought Musica in 1992.
“Musica has been operating in a declining market for several years owing to the structural shift globally to the digital consumption of music, movies and games from the traditional physical format. The inevitable demise of the brand has been accelerated by the Covid-19 pandemic which resulted in the rapid decline in foot traffic in destination malls where Musica stores are typically located.”
Separately, in a trading update, the Clicks group said its retail health and beauty sales, including Clicks and The Body Shop, GNC and Claire’s, increased by 8% in the past 21 weeks
Updates from the miners
Anglo American's share price was up 1% to above R494 after the company released a production update for the fourth quarter of 2020. Thermal coal production was down a third compared to the same quarter in the previous year, with diamonds down 14% - but copper has climbed.
"As we begin 2021, we are continuing to see positive demand for rough diamonds, supported by consumer demand for diamond jewellery in the holiday selling season. While it is still too early to signal a strong and sustained recovery, the resilience in demand in spite of ongoing Covid-19 impacts is very encouraging,” the company said in a statement.
Anglo-controlled iron-ore miner Kumba saw its total production fall by 13% last year, with total sales down 5%. South African sales were down 84%.
Meanwhile, Anglo American Platinum saw PGM production at its own mines fall by 8% in the last quarter of 2020 due to the closure of mined-out infrastructure at Amandelbult and “community-related disruptions” at Mogalakwena. Unki and Mototolo delivered strong production.
PGM output from joint operations fell by 14% to 198,000 ounces. This was largely due to self-imposed safety stoppages at Modikwa following the fatal incidents, as well as unprotected strike action at both Kroondal and Modikwa.
Surprise takeover bid in tech sector
The telecom technology company Huge Group has made a surprise bid to buy out software group Adapt IT.
Adapt IT shareholders are offered 0.9 Huge share for every one Adapt IT share they own, which implies an offer price 552c for Adapt. The bid is worth R800 million.
Adapt’s share price rocketed by more than 12% on Thursday morning.
Strong profit growth for Italtile
Italtile said that its headline profit for the six months to end-December could be up by 33% to 43%.
As South Africans remain stuck at home during the pandemic, this has triggered a mini-boom in DIY and home improvements.
27 January 2021
Steinhoff rockets 30% on strong sales in Europe
On Wednesday, Steinhoff’s share price ended 30% higher after its European retailer Pepco reported strong sales for the quarter to end-December. The quarter usually represents a third of its full-year revenue.
Pepco owns the Poundland stores in the UK and Dealz outlets in Ireland, Spain and Poland.
As a non-essential retailer, some Pepco stores were forced to close due to government lockdowns in Czechia (six weeks) and Slovenia (seven weeks) in November and December.
But the group still manages to grow total revenue by almost 4%.
Steinhoff - which is struggling with a massive debt burden and legal claims - recently revived plans to list Pepco, Bloomberg reported.
Life sets up vaccine task team
The hospital group Life Healthcare says trading for the three months to end-December exceeded expectations, with revenue up 5% compared to the previous year.
But the higher operational costs associated with Covid meant that its profit (EBITDA) was down 15%.
Hospital occupancy in December was 55.2%, only slightly higher than last year – despite SA’s raging Covid second wave. The group stopped elective surgeries to cope with the increasing number of Covid-19 patients.
Ahead of the arrival of vaccines in the country, Life has set up a vaccine task team to roll out the vaccinations to staff. A quarter of its staff at its UK and European operations, some 450 people, have already been vaccinated.
Lewis see strong sales - also on Black Friday
Lewis Group, which owns Lewis, UFO and Beares, has reported sales growth of almost 17% for the third quarter to December 2020, and – unlike other retailers – says it saw a “buoyant” Black Friday performance. Cash sales for the quarter grew by 35.9% while credit sales
26 January 2021
Cell C exec out on bail in R130m fraud case
Former Cell C IT manager Mohamed Ismail Adamjee was released on bail of R50,000, after being charged for fraud and corruption that cost the company R130 million. He allegedly inflated invoices by information service providers.
IMF more downbeat about SA growth in 2021
The IMF has revised its expectations for South Africa's economy. It now expects that the local economy shrank by 7.5% last year - from 8% previously. But it expects growth of only 2.8% this year – from a forecast of 3% previously.
Strong sales at Pep, Ackermans
Pepkor’s new trading update shows that its sales rose by almost 8% to R20.3 billion in the three months to end-December. The Pep and Ackermans brands reported sales growth of almost 9%. Prices rose by 5%.
FNB says it has paid out R150 million in life insurance nobody asked for
First National Bank says its life insurance arm has paid out R150 million in "proactive" claims – before anyone asked for the money.
It monitors data from the department of home affairs to check for deaths. It has also paid out more than R100 million related to Covid-19.
FNB is punting those numbers as the insurance industry, broadly, take a reputation hit for fighting off coronavirus business-interruption claims. Read more.
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