Today in business: SA scores big trade surplus | Absa cuts ties to Sekunjalo companies
SA scores big trade surplus as exports grow
South Africa saw a much larger-than expected trade surplus - almost R29 billion - in February. This was thanks to a 16% increase in exports. The rand was last at R14.82/$
Absa cuts ties to Sekunjalo companies
Absa has cut all ties with companies directly or indirectly controlled by Iqbal Survé's Sekunjalo Investment Holdings. The bank says keeping Sekunjalo companies as clients presents "intolerable reputational, commercial, and legal risks". The decision was kept secret for seven months – until a chance remark in Parliament two weeks ago, amaBhungane reports.
PPC ditches rights issue, makes DRC deal
PPC's share price jumped 18% yesterday after the company suspended a planned rights issue, and reached an agreement with lenders to its DRC business to restructure loans worth almost R3 billion.
South32 'sweetens' SA coal deal
The Australian miner South32, which is trying to sell its South African coal assets to local group Seriti, has "sweetened" the original deal with better terms to help finalise the sale, Miningweekly.com reports. Seriti and Eskom are currently in tough negotiations about higher coal prices from South32 mines.
Ascendis Health reports a triple digit hit to earnings
The healthcare group’s normalised headline earnings tumbled 131% to a loss of R43 million, from a profit of R138 million during the prior period, the company said in its interim results to end December 2020.The debt-laden company said revenue grew 33% to R3.98 billion from R3 billion during the period.
Revenue internationally, which accounts for 55% of total group sales, rose 35% to R2.2 billion, while it increased 30% to R1.8 billion in South Africa.
In its domestic South African market, its Medical Devices unit performed the best, managing to grow revenue by 59%. The division was a key supplier of high-demand ventilators, respirators and testing products during the Covid-19 pandemic.
Nampak can supply to North America helps offset weak local demand
The packaging manufacturer said its revenue increased 1% during the year to end-February.
Despite liquor sales bans affecting the business in South Africa, the group was boosted by strong demand coming from its Nigeria market.
Though demand was lower than its normal volumes, Bevcan in South Africa has begun to show partial recovery.
It said the impact of the third alcohol ban, which was reinstated in December and lasted until February, had a negative effect on performance.
The company also said it has secured future can volumes through the renewal of a major contract. Can supply to North America during December helped to offset softer local demand, the company said.
Renergen expects profits to fall over 40%
The gas and helium company expects its headline profits to tumble 40% when it delivers its full year results for the year to end February. It said it anticipates that headline earnings per share would fall to 37.47 cents.
Renergen said the losses include once-off costs it incurred while raising capital to reduce its debt incurred on its efforts in raising debt funding with The United States International Development Finance Corporation as well as equity funding for the Initial Public Offering on the Australian Stock Exchange.
York Timber’s revenues see a slight recovery
The forestry company reported improved profits, with headlines recovering to 13 cents per share from a previous loss of 20 cents per share.
Revenues grew 2% to R888 million; the company said in its six-monthly financial results to end December 2020. It managed to cull debt by R92 million.
Its Forestry and Fleet Solutions and its Wholesale divisions contributed positively to the financial results, the company said.
Balwin Properties' profit to drop 23%
South Africa’s largest builder of sectional titles, Balwin Properties, expects its headline earnings per share to drop as much as 23% for its financial year to end February. It said earnings may decrease to 68 cents from a previous 88 cents.
The company said trading conditions continued to be tough, despite 2020’s prime lending rate cuts. Construction was also halted between the end of March and June last year because of lockdown restrictions.
Balwin delivered 2,550 apartments, down from 2,715 in the prior period. The company expects that this will result in revenues declining by 8% when compared to the previous year.
The company said it saw strong demand for one- and two-bedroom apartments in the year, which contributed 77% in revenue.
Mr Price’s Power Fashion deal gets greenlight from Competition Commission
Value retailer Mr Price’s acquisition of Power Fashion has just received approval from the South African and eSwatini competition authorities. The deal will come into effect on 1 April and will see Mr Price acquire 173 Power Fashion stores across Southern Africa.
Mr Price bought Power Fashion, also a value retailer, for R1.7 billion in November last year. It said at the time the deal would help it acquire new customers in the value segment of the retail market.
“I am really excited about the opportunities that exist for Power Fashion, which is a quality business, however I am more excited about welcoming new associates to the Mr Price Group. We enjoy a similar entrepreneurial culture and the fit will be excellent,” Mark Blair, Mr Price’s CEO said of the deal.
Ramaphosa to meet with premiers about Easter restrictions
President Cyril Ramaphosa is meeting with provincial premiers today to decide whether stricter lockdown restrictions during Easter are needed, News24 reports.
Yesterday, the CEO of Remgro – which has a stake in alcohol producer Distell – supported more stringent measures. "I'm a little bit worried about the third wave in SA ... and I'm actually quite in favour of probably more stricter regulations regarding Easter, to make sure we don’t get a third wave," Jannie Durand told Fin24.
SA to get first J&J vaccines from ECape factory in April
During a visit to Aspen’s factory in Gqeberha, where the Johnson & Johnson vaccine will be packaged, president Ramaphosa said that government ordered 30 million doses from the plant. The first locally-packaged vaccines should be delivered from next month.
Foreigners buy SA bonds, shares
Last week, international investors were net buyers of SA shares and bonds, new JSE data shows. They were net buyers of R420 million in SA shares, and more than R1 billion in bonds.
Grand Parade Investments profits drop 109%
The company’s headline earnings per share plunged 109% to a loss of 0.99 cents from 10.35 cents per share previously, GPI said in its six-monthly financial results for the period to end December 2020.
The largest contributor to the plunge in earnings was the company’s gaming assets, whose earnings were down 53% to R33 million after its casinos were shuttered during the initial stages of the lockdown.
Burger King’s total revenue increased 7% to R676 million from R630 million, boosted by laxed lockdown restrictions during the period. The chain also managed to open seven new restaurants, bringing to 105 the total number of Burger King outlets in the country. The company closed five that were not profitable.
The Grand Foods Meat Plant business grew revenue by 6% to R100 million from R95.4 million, it was boosted by growth in the Burger King business, but a weighed down hospitality industry negatively affected the Mac Brothers business, which supplies catering equipment to the sector. Mac Brothers had revenue of R68.6 million, 28% lower from R95.4 million during the prior period.
Sygnia founder quits as co-CEO
The investment company Sygnia's founder Magda Wierzycka has resigned as joint CEO - as she shifts her focus to finding overseas opportunities, and to concentrate on her own investment vehicle, Braavos.
David Hufton, who was named deputy CEO in 2018 and ascended to join Wierzycka at the helm of Sygnia last year, will take the role of sole CEO from June.
Interest rate remains unchanged
The Reserve Bank has kept the repo rate on hold at 3.5%, with all five members of the Monetary Policy Committee voted to keep rates unchanged. At the previous meeting, two voted to cut rates.
The bank hiked its GDP forecast for 2021 from 3.6% to 3.8%, Fin24 reports.
Tencent slumps amid concerns
Naspers and Prosus both lost around 1% of their value after Tencent reported its quarterly results yesterday - but the SA companies could face more pressure today after a large slump in Tencent's share price overnight. Investors are worried about a Chinese government crackdown on Tencent platforms, while in the US, regulators have also threatened tech companies with delisting from American bourses if they continue to fail to comply with US auditing rules.
Mediclinic weighs on Remgro results
Remgro this morning reported its interim results, with headline profit from continuing operations down 53%. An interim gross dividend of 30 cents (2019: 215 cents) was declared.
Its holding in Mediclinic was hit hard by the pandemic, while FirstRand didn't pay dividends and, due to an accounting reclassification, Remgro couldn't account the financial group's earnings for the period under review. Excluding Mediclinic and FirstRand, Remgro headline profit fell by "only" 7.7%. Remgro has stakes in Distell, RCL Foods, SEACOM and others.
Bain blasted at state capture commission
Athol Williams, a former partner at Bain & Company's South African branch, blasted his former employer in his testimony at the state capture commission. He accused the US consulting firm of plotting with former President Jacob Zuma to bring in Tom Moyane, the man that would drive SARS to the ground, Fin24 reports.
Markets hit by Covid resurgence
The rand - last at R14.89/$ - came under pressure overnight amid new concerns about rising coronavirus cases in Europe. Germany has ordered lockdown measures over Easter, and France and Italy have enacted more restrictions. In the UK, a new £5,000 fine will be imposed on people traveling outside of England without a valid reason. The JSE fell 1% as global markets declined yesterday, and the local property sector took the biggest hit.
Lesotho scraps Netcare hospital contract over sackings
Netcare’s contract to manage the biggest hospital in Lesotho has been cancelled by that country's government after the company fired 300 nurses who had been on strike for six weeks over higher pay, reports Business Day.
ADvTECH school numbers increase despite lockdown
ADvTECH's annual results show an 8% increase in revenue to R5.5 billion, with headline profit up 6%.
The company's full-year dividend was 20c, compared to 15c in the previous year.
While its pre-primary phase lost students, other schools and its tertiary education institutions saw growth. Its SA schools saw a 4% increase in students to more than 27,000 by February 2021, while schools in the rest of the Africa saw a 10% increase. Its tertiary education unit grew revenue by 9% to R2.3 billion.
ADvTECH's brands include Trinityhouse, Vega and Varsity College. Its share price declined almost 2% on Tuesday.
Master Drilling hit by South American lockdowns
Master Drilling reported its annual results, which showed a 71% decline in headline profit. The company, which provides drilling technologies, saw its revenue drop 17% to $123.1 million - hit hardest by a decline in its South American operations due to lockdowns. But its operations in India, Africa and Scandinavia remained operational.
Reserve Bank sued over Steinhoff
Fin24 reports that the South African Reserve Bank is being sued by a PIC-backed group for allegedly enabling Steinhoff to move assets worth €19 billion overseas while the group was technically insolvent – and for allowing its local entities to settle claims by foreign investors "to the detriment of the South African economy".
SAA business rescue practitioners prepare to wrap up
Bloomberg reports that the business rescue practitioners plan to wrap up their operations by the end of the month. SAA is close to being "both solvent and liquid," with remaining issues including outstanding employee payments and the appointment of a receiver to take over financial management. It is not yet clear when the airline will fly again. This morning, Business Day reported that the SAA flight that collected a batch of Covid-19 vaccines from Brussels last month experienced an “extraordinarily dangerous” event on take-off.
Pandemic hits Old Mutual
Old Mutual's annual results show a 75% decline in adjusted headline profit to R2.5 billion. The company reports a "net pandemic impact" of almost R4.4 billion, and said that it fast-tracked payment of approximately R13 billion in mortality claims during the year.
The company saw lower sales volumes in life and savings products due to lockdown restrictions and higher credit losses in its banking business as customers continue to face financial pressure. Still it reported a final dividend of 35c a share - from 75c previously.
Attacq's vacancy rate shrinks
The property group Attacq - which owns the developmental rights for the Waterfall City development as well as malls like Mall of Africa and Brooklyn Mall saw its net asset value (NAV) decreased by 4.4% to R11.1 billion for the past six months. But its overall occupancy rate improved from 93.6% at 30 June 2020 to 96.4% at 31 December 2020.
RMB's share price jumps 12% as profit loss narrows
RMB’s headline loss improved by 97% to R5 million, from a previous loss of R180 million loss in 2019. The company reported its half year financial results to end-December on Friday morning which showed its revenue dropped 83% to R111 million during the period.
The company said the rand’s strength over its reporting period against the Euro exchange rate helped keep its net asset value resilient. It decreased 4% from R4.9 billion at the end June 2020, to R4.7 billion by the end of December 2020.
The performance of its RMH Property investees was “pleasing in the context of the current environment,” the group said.
Loss after tax improved by 74% to a loss of R45 million, compared to a previous loss of R176 million.
The largest contributor to the performance was the elimination of funding costs of R139 million in 2019 as the company worked to settle all debt as part of the RMH unbundling.
During morning trade, RMB’s share prices climbed 12.4%.
Northam profit jumps 74%
Northam Platinum has released half-year results, which shows a 74% increase in headline profit to R3.3 billion. While it saw a decline in the metals it sold, the 9% decline in the rand/dollar exchange rate, and a 50% increase in metal prices gave it a boost.
SA gets new power producers
The companies, which will provide power generated by solar energy, wind, liquified natural gas and battery storage, are: ACWA Power Project, Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, Mulilo Total Coega, Mulilo Total Hydra Storage, Oya Energy Hybrid Facility, and Umoyilanga Energy.
US bond yields hit 14-month high
More volatility in the US government bond market, with the 10-year Treasury yield pushed past 1.7% overnight - a new 14-month high. Yields have been rising as more investors price in expectations of higher inflation as the US economy recovers from the Covid-19 crisis. The US Fed now expects that the economy will grow by 6.5% this year - from the prior estimate of 4.2%.
UIF recovers R2bn in wrong TERS payments
The Unemployment Insurance Fund (UIF) had recovered more than R2 billion that was inappropriately paid out last year in the fund's Temporary Employer-Employee Relief Scheme (TERS).
Eskom suspends load shedding during memorial service
On Wednesday night, Eskom increased load shedding from Stage 1 to Stage 2 - but outages will be suspended between 10:00 and 14:00 for the memorial service of King Goodwill Zwelithini.
Metair profit hit by muted vehicle demand
The automotive components company on Thursday said headline earnings per share dropped 56% to148 cents per share for the year to end December 2020. Group revenue also decreased 9% to R10.23 billion, from a previous R11.24 billion, largely driven by a reduced demand for vehicles in the first half of 2020.
The impact resulted to volumes falling 42% in the first half of the year in its the Automotive Components Vertical.
Metair said planned model launches, facelifts and the recovery in the market had a positive effect, leading to better volumes in the second half of the year.
It said aftermarket, OEM (original equipment manufacturing) and export demand returned strongly for the Energy Storage Vertical but the company still reported overall volume declines of 11%, which was below 2019 levels.
ARC Investments reports fall in net asset value
The investment fund African Rainbow Capital Investments, controlled by Patrice Motsepe and incorporated in Mauritius, has reported a 8% fall in its IFRS Net Asset Value (NAV) from June to December last year.
ARC Investments owns stakes in Alexander Forbes, TymeBank and Rain. TymeBank had onboarded 2.66 million customers at 31 December 2020, with approximately 50% of customers actively using their accounts.
Exxaro revenue up 12%
Exxaro reports its results for the year, with revenue up 12% to R28.9 billion, but headline profit down 2%. Overall coal output rose 4%.
OUTsurance profit jumps 23% thanks to fewer claims
Rand Merchant Investment Holdings saw its headline profit fall by 3% to almost R1.6 billion for the six months to end-December.
The company owns minority stakes in companies like Discovery (25%) and Momentum Metropolitan (27%), as well as almost 90% in OUTsurance.
OUTsurance’s normalised profit increased by 23% to R1.4 billion, thanks to fewer claims during lockdown in South Africa. Its Australian business Youi experienced “only” one large catastrophe – a hailstorm - during the six months, which resulted in a a retained loss of AUS$10 million, compared to the retained loss of AUS$31 million in the previous year due to the Australian bushfires.
OUTsurance's gross written premiums increased by 18% despite the low premium inflation experienced across the motor insurance portfolio. OUTsurance Business has largely settled its business interruption claims in the tourism and hospitality sectors. OUTsurance Life’s profit was “materially” impacted by higher claims during the pandemic.
"The overall new business premium growth for the OUTsurance group increased by a strong 40%" - RMI results.. This tends to happen when you pay business interruption policies out & your largest competitor refuses to do so.— Keith McLachlan (@keithmclachlan) March 17, 2021
Remgro warns of profit decline
Remgro has warned that its headline profit will fall by 45% to 55% for the six months to end-December. This was largely due to lower profits at Mediclinic and FirstRand, as well as lower interest income, due to the 300 basis points reduction in interest rates since January 2020.
Curro profit hit despite increase in learners
The independent schools group Curro saw its headline profit fall by 32% to R171 million in the past year, despite a 6% increase in learner numbers to almost 61,000.
The company contended with temporary school closures lasting almost three months in 2020 during lockdown.
Learner numbers in both primary and high schools were negatively impacted, but nursery schools were the hardest hit given that many parents kept small children at home as this was not a compulsory schooling phase.
Revenue increased by 5% to R3 million. Tuition fee income grew by 12% in line with the growth in learners as well as the annual inflationary fee increase.
Libstar profit drops 13%
Libstar increased its revenue by 4% during the past financial year- with food sales up almost 4% and personal care product sales growing by 8%. Food contributes 92% to the company’s revenue. Libstar produces food under store labels for Shoprite, Woolworths, Clicks, Spar and Pick n Pay.
Despite strong demand in the group’s retail and wholesale sales channel, demand for Libstar food products was hit by the slowdown in the hospitality and restaurant industries.
The industries were forced to completely or partially halt operations as a result of lockdown regulations.
The food producer's normalised earnings per share dropped 13.8% to 71.3 cents in the year to end-December.
Nedbank profit down 57%, no dividend
Nedbank's headline profit declined by almost 57% to R5.4 billion in the past year. In the first six months of the year, its profit was down more than 69%.
The bank said that it assisted clients with cashflow relief of more than R120bn of loans during "peak Covid stress". "Pleasingly clients have been able to reduce this level of support to R28bn, with only R2bn remaining in retail."
Like Absa, Nedbank has not declared a dividend, expecting to resume payments by mid-year. It also expects to grow headline profit by more than 20% in the six months to June 2021.
Shoprite see profit gains of almost 20%
The retailer delivered its interim results on Tuesday morning with trading profit showing an increase of 18.3% to R4.7 billion. During the period, the group also increased sales by 4.7% to R83.4 billion. Headline profit rose almost 11%.
Shoprite said consumers' changed shopping patterns, brought on as result of the Covid-19 pandemic have remained largely in place. Since the virus surfaced in the country, South African shoppers have avoided crowded areas such as malls and stocked up on food for home consumption, which meant less frequent visits to the shops.
This resulted in customer visits declining by 16.3%, despite the average basket spend increasing by 26.2%, Shoprite said.
Its liquor businesses, which were open for business for only 79 out 182 trading days saw sales decline by 21.8% as a result of the liquor bans.
Astral profit to fall by 45%
The poultry group Astral warned this morning that its half-year headline profit will be down by up to 45%. The company blames weak demand amid the pandemic and big increases in feed costs.
Probe into Huge share trading
The Financial Sector Conduct Authority (FSCA) has launched a probe into trading in telecoms company Huge Group following a complaint by a US-based investment advisor.
Fin24 reports that Glacier Pass Management exec Kerem Aksoy flagged what he believed to be "unusual trade activity" in Huge’s shares in December 2020 - weeks before the company announced a plan to buy software producer Adapt IT.
The company started buying its own shares in the week leading up to the announcement, Aksoy said. Huge's share price rose amid this buying spree. Its takeover offer of Adapt IT is based on its share price value. Huge Group is offering to exchange each Adapt IT share for 0.9 Huge share.
But Huge told Fin24 that it launched the share-buying programme in January last year.
Healthcare workers represent 60% of Discovery's Covid claims
Discovery Life has paid out a total of R1.5 billion in Covid-19-related claims to date. While healthcare workers made up just 4.9% of Discovery Life clients, they accounted for 60% of all Covid-19-related claims, Fin24 reports.
Mr Price buys Yuppiechef in R470m deal
Yuppiechef has a retail division (which represents 85% of turnover) with an online platform and 7 stores, as well as a wholesale division, which imports branded goods for wholesale distribution.
Mr Price says it is satisfied with Yuppiechef’s positive bottom-line performance and prospects for margin expansion.
The company says that the deal will give Mr Price "the opportunity to access the skills of a highly talented team and service a new customer base", while Yuppiechef will benefit from Mr Price's financial strength to "accelerate growth plans which include significantly broadening the product assortment into areas where we have well-established skills and expanding its physical presence beyond the currently limited number of stores".
Mr Price says it will pay approximately 1% of market capitalisation, in a cash deal.
Mr Price's current market cap is almost R47 billion, which puts a roughly R470 million value on the takeover.
Sun International’s income hit by half as pandemic effects bite
Hotel and casino group Sun International reported on Monday that its income from operations had declined 49% to R6.1 billion from a previous R11.8 billion, because of the lockdown and stringent restrictions on trading. Adjusted headline earnings fell from R763 million to a loss of R1.1 billion.
The group was forced to halt operations completely for three months between March and July last year.
For the first six months of the year, its income in South Africa declined 55% to R2.5 billion. Overall income for the full year fell 48% from the prior year to R6 billion.
Eskom extends load shedding
Eskom announced on Sunday that stage 2 load shedding will be extended to 05:00 on Wednesday following the loss of further generation capacity and to replenish emergency generation reserves.
"Over the past two days, Eskom teams successfully returned a generation unit each at the Matimba and Medupi power station. However, during the weekend we have suffered further breakdowns at five power stations, putting further strain on the generation capacity," Eskom said in a statement.
Additional breakdowns have occurred at the Tutuka, Majuba, Kusile, Matimba and Duvha units, adding to previous breakdowns at the Kriel and Kendal power stations. There were also delays in units returning to service at Hendrina, Duvha and restoring full load on the Cahora Bassa line.
No dividend for Absa shareholders
Absa reported its full-year results, which showed a 51% decline in headline profit to R8 billion.
While it saw a strong recovery in business in the second half of last year and revenue increased 2% to R81.4 billion over the year, the group - unlike some of its peers - has decided not to declare a dividend, "to conserve capital".
Stadio suffers loss
Stadio, the tertiary education group founded by Curro, suffered a headline loss of R70 million for the past year (after a headline profit of R70 million in the previous year) due in part to the impairment of some of its trademarks following a takeover.
The company saw its revenue increase by 14% to R933m, and student numbers rose 10% to 35,031.
Exxaro profit to fall
Exxaro, which has interests in coal, titanium dioxide, iron ore and energy, has warned that its headline earnings fell by as much as 6% over the past year. The company says this was due to various once-off items - but that it earned higher commercial coal revenue. Also, it saw record coal export volumes, albeit at lower US dollar prices, but benefiting from a weaker rand.
Aspen expects J&J vaccine production to boost results by end-2021
The pharmaceutical group Aspen saw a 17% increase in its half-year group revenue to almost R19 billion, with its headline profit up 16%. Its debt burden declined to R27.7 billion by the end of December, from R35.2 billion at 30 June 2020.
The company says “the technical transfer” to start producing the Johnson & Johnson vaccine in Port Elizabeth should be finalised in the second quarter, and it expects production should start to contribute to its results toward the end of the current financial year (end-June 2021).
The article has been updated to correct Aspen's year-end.
Sanlam expects more Covid waves
Sanlam CEO Paul Hanratty told Bloomberg that the company is preparing for two-and-a-half more Covid-19 waves, given that the vaccine programme “is not going to impact the current year very significantly”.
Weak mining, factory data
Standard Bank declares dividend despite fall in profit
Standard Bank declared a final dividend of 240 cents per share for the 2020 financial year.
The bank reported a 43% plunge in headline earnings to R15.9 billion from a previous R28.2 billion. Its personal and business banking unit was the hardest hit, with headline earnings declining 61% to R6.3 billion.
The group said the Covid-19 pandemic placed considerable strain on its retail, business and corporate clients, especially in its South African main market. Throughout the pandemic, the bank provided R129 billion in relief to individuals and businesses, while it provided R25 billion to its corporate clients.
Its share price was down more than 2% by Thursday midday.
Sanlam sees increase in new business
Sanlam reported a 13% fall in operating profit ("net result from financial services") this morning, due in part to higher death claims and last year's downturn in markets. New business volumes increased by 25% to R311 billion - thanks to strong growth in its Investment business (+37%).
New plan for Virgin Active UK
Brait this morning announced a restructuring plan for its Virgin Active UK unit. Lockdowns have hit its gyms hard, with revenue down almost 50% at Virgin Active Europe. The plan, which has the support of some of its creditors, involves writing off some arrears, and new funding from shareholders. The restructuring plan won't have an impact on Virgin Active in SA, the company said.
Steers, Debonairs sales down 30%
Famous Brands this morning reported a sharp slump in sales over the past year. Sales at its leading brands (Steers and Debonairs) in SA fell almost 30%, while at Vovo Telo, Europa and others, sales declined by two-thirds. The company said it was not in a position to predict how its profit will be affected for the year to end-February.
Famous brands update 12 feb. SA mainstream brands turnover down 30%. Signature brands turnover down 66%. Africa and Middle East turnover down 23%. Clearly shows affect of lockdown. The board cannot even now give estimates of losses— Wayne McCurrie (@WayneMcCurrie) March 11, 2021
Bell Equipment has received a buy-out offer from its largest shareholder, IA Bell. The family-owned company, which has a stake of almost 40% in Bell, plans to delist the group.
Kumba chair resigns
Kumba’s chairperson, Dr Mandla Gantsho, will step down in May. Gantsho has chaired its board since 2017, but wants to devote more time to his personal business interests.
Load shedding has returned, and will continue until Friday night
State power utility Eskom will on Wednesday implement stage 2 load shedding from 17:00 until 23:00 on Friday.
Eskom said there is a high probability that load shedding may run into the weekend.
“Eskom has had to extensively utilise the emergency generation reserves, which are being rapidly depleted. This period of load shedding will be used to replenish the emergency generation preserves,” Eskom said.
Murray & Roberts' Clough appointed head of New Guinea's Lombrum infrastructure project
Engineering and building company Murray & Roberts’s Clough has been appointed as the head contractor for the Lombrum Infrastructure Project in Papua New Guinea. The R2.5 billion project, whose objective is to redevelop the Lombrum Naval Base is a joint initiative between the Australian and Papua New Guinea governments.
The project “has been designed to benefit the local community and includes the construction, support, maintenance, and repair services of the Lombrum Naval Base, located in Manus.”
MTN embarks on new 'separation' strategy
This morning, MTN reported its results for last year – which showed a 52% increase in its headline profit, with a 12% rise in service revenue to R170 billion. Its number of subscribers increased by 28 million to 280 million across 21 markets.
But the company didn’t pay a final dividend for last year as it focussed on reducing its debt burden of R43 billion. Also, MTN is worried about “cash upstreaming from Nigeria” as well as the impact of Covid-19.
Its share price fell 2% in opening trade in reaction to the dividend announcement.
It also has a new strategy, called “Ambition 2025”, which will involve “structurally separating” its infrastructure assets and platforms, such as fintech, to attract third-party capital and partnerships into these businesses, over the medium-term.
Almost a fifth of Growthpoint offices now vacant
Growthpoint, SA’s largest listed property group, reported a grim set of results for the six months to end-December. Some 18% of its office space is now vacant, and more than 8% of its industrial properties.
The company, which owns 434 properties in South Africa valued at R71 billion, saw its distributable income per share fall by 31%.
Growthpoint, which owns 50% of the V&A Waterfront, says that the centre suffered “disproportionately” to the rest of the South African portfolio due to its strong reliance on international and local tourism and heavy weighting to the hotel, retail and restaurant trade.
Eskom to probe De Ruyter racism allegations
Eskom will appoint an independent senior lawyer to investigate allegations of racism levelled at its CEO André de Ruyter, Fin24 reports.
"The allegation not only brings Eskom into disrepute, but it also threatens to detract and distract the focus of the executive team and the GCE [group chief executive] in particular from their critical job of restoring Eskom to operational and financial sustainability," the board said in a statement.
This comes after the Standing Committee on Public Accounts (Scopa) announced last week that it planned to investigate allegations against De Ruyter by suspended chief procurement officer Solly Tshitangano.
Tshitangano accused De Ruyter of flouting procurement guidelines, but also of racism in how he deals with himself, suppliers, like the black female-owned Econ Oil, and contractors.
Adapt IT sees profit growth of almost 40%
Despite reporting a 2% fall in half-year revenue (to R707 million), the specialist tech firm has seen its profit grow by 37% to R27.5 million. .
Revenue decline declines were largely brought on by the ongoing challenging economic and trading conditions especially in its South African primary market which contributes 73% to its total revenue.
The group said the positive contributors to revenue were its education unit which grew 15% due to strong demand for e-learning solutions after most of the school year in 2020 was conducted online. Financial services also contributed positively and saw a 7% rise in revenue.
Royal Bafokeng declares maiden dividend after
The platinum group metals miner, Royal Bafokeng, on Tuesday declared its first dividend (575c per share) after reporting a 2,700% increase in its headline profit to R3 488.9 million last year.
The mining group's performance was also bolstered by a notable improvement in the PGMs (platinum group metals) prices, a weaker rand and strong operational performance, despite the impacts of the Covid-19 pandemic.
Telkom, e.tv succeed in halting spectrum auction
Telkom and e.tv succeeded in a legal bid to stop the radio frequency spectrum auction, with the High Court in Pretoria ordering the Independent Communications Regulator of South Africa (Icasa) to halt the auction, which was scheduled for later this month.
Telkom contends that the way the auction is structured will benefit the biggest players like MTN and Vodacom, and that it had a “fundamental flaw” because it included frequency bands that are still used by TV broadcasters.
For the first time in more than fifteen years, South Africa is auctioning off high-demand radio frequency spectrum, which will allow local cellphone providers to improve their service and expand 5G.
Mobile operators have long blamed the lack of spectrum for South Africa's high data prices.
In South Africa, spectrum is limited because television broadcasting is still hogging frequencies – because a move from the analogue TV system to digital terrestrial television has been delayed for half a decade.
Capitec sees big profit recovery in past six months
In a trading update, Capitec said its headline profit will be between 25% to 29% lower for the year to end-February.
But the group saw a sharp split: in the first six months to end-August, its profit fell by 78% - while in the second half it increased by between 14% and 22%.
Growthpoint payout to fall by 15%
The property group Growthpoint expects that its distribution per share will be at least 15% lower for the six months to end-December.
Old Mutual hit by R2bn in Covid death claims in just two months, worried about third wave
After putting aside almost R1.4 billion for expected Covid mortality claims last year, Old Mutual has hiked this provision by R4 billion after higher-than-expected claims. The company is also concerned about “emerging expectations of a third wave given evidence of virus mutation, the slow pace of the vaccination rollout and upcoming public holidays and the winter season”.
In January and February alone, it recorded some R1.9 billion in Covid-related mortality claims.
In a trading update on Monday, the company warned that its headline profit may decline by between 42% and 62%.
Massmart suffers loss of more than R900 million
Massmart suffered a headline loss of R924 million last year – smaller than 2019’s loss of almost R1.2 billion.
But its sales declined almost 8% to R86.5 billion in 2020. Game's sales fell by almost 16%, while Builders' sales were down 2%. Massmart Wholesale (Makro) saw sales fall 5%. While it more than doubled online sales at Builders, and also saw strong online growth at Game and Makro, online only contributed 2% of total sales.
The Walmart-owned company has appointed Barclays to sell the group’s interests in Cambridge Food, Rhino and Massfresh, which together employs 7,000 workers. Massmart will also review its stores in other African countries.
Absa exec Peter Matlare passes away
Matlare served as the CEO of the South African Broadcasting Corporation (SABC), the chief strategy and business development officer of Vodacom and later as the head of Tiger Brands, where he oversaw the expansion of the company into Nigeria and Kenya.
Nedbank expects steep profit drop
In a trading update, Nedbank warned that its headline profit could fall by between 55% to 60% for the past year.
Plastics give Mpact a boost
Packaging group Mpact posted a 6% increase in profit for the past year, with an increase in sales of its plastic products offsetting a slight decline in paper. The company lost 50 production days – and gross profit of R91 million - at its Springs paper mill due to the catastrophic failure of a municipal sub-station in Ekurhuleni. An insurance claim has been submitted and an interim settlement has been received. The company reduced its debt by almost R1 billion and believes it is “well positioned” ahead of good fruit crops and a gradual recovery in the fast food sector.
Trellidor sees strong SA sales
Trellidor’s half-year results showed that its revenue rose by almost 3% to R282 million, with profit up 20%.Strong Trellidor sales in South Africa (+8%) offset a decline in international revenue of 14%, particularly in other African countries. Trellidor also has a UK business.Its interim dividend has been hiked by 25%.
Germans charge Markus Jooste
Steinhoff's former CEO Markus Jooste and two other former executives have been charged by prosecutors in Oldenburg, Germany, with numerous counts of balance sheet manipulation. These are the first criminal charges against former executives, Fin24 reports.
Legal blow to SAA pilots
The Labour Court has dismissed an application by the SAA Pilots' Association for leave to appeal a prior judgment which held that the lock-out of the pilots was lawful. SAAPA members have been locked out since 18 December due to a pay dispute and the deadlock continues.
Sanlam operating profit down
In a trading update, Sanlam said that its operating profit for last year fell by between 18% to 28% - but its headline profit (which is the main measure of profit in SA) will be higher due to accounting changes.
Santam hit by pandemic claims
Santam's profit for the past year fell by 47% due in part to the large amounts it must pay out in business interruption insurance claims, as determined by court rulings. This partly offset by a very quiet year for vehicle insurance claims, as well as "limited" natural catastrophes.
Santam says motor insurance claims only returned to "normal" levels in November and December, after lockdown kept many South Africans off the road. Other claims were also subdued, and its MiWay subsidiary reported an underwriting profit of R486 million (2019: R393 million) or the year.
Santam has made a provision of R2 billion for business interruption claims at the end of last year - in addition to the R1 billion of interim relief payments made in August 2020, which will be offset against business interruption claims.
No dividend was declared for the year. Santam's share price jumped 3% to R255.61 on Thursday morning.
Momentum sees big rise in death claims
Momentum Metropolitan has seen a 43% fall in its half-year headline profit to R1 billion as the impact of deaths due to Covid-19 hit its bottom line.
Its Momentum Corporate unit, which underwrites employee benefits - including death and disability insurance - for many SA companies, saw 35% more death claims than normal. The number of death claims in the age group between 40 and 70 was almost 50% higher than usual. The unit suffered a headline loss of R212 million in the past six months, from a profit of more than R300 million in the same period in the previous year.
In Momentum's retail life businesses, average death claims were 20% higher than in comparable periods.
Liberty suffers large loss
Total death and disability claims paid during 2020 amounted to R11.7 billion - an 11% increase. The company set aside a "pandemic reserve" of R3 billion at the end of June, to make provision for the pandemic. Based on various studies and recent data, the reserve was increased by R73 million at the end of the year. The company says new long-term insurance business (down 10% to R7.3 billion) was hit by the impact of lockdown on face-to-face sales
FirstRand declares dividend after faster-than-expected profit growth
FirstRand became the first banking group to declare a dividend after the SA Reserve Bank's Prudential Authority lifted its effective ban on dividends last month.
The group – which owns First National Bank (FNB), RMB and Wesbank – reported a 20% fall in its half-year headline profit (to R11.1 billion).
"Since June 2020, earnings have recovered faster than expected driven by a better than anticipated rebound in the economy, which has supported transactional volumes, growth in deposit balances and an improved credit experience,” the company said in a statement. This enabled it to declare an interim dividend, of 110c (25% lower than its previous interim dividend). The group did not declare a final dividend in 2020.
After taking impairments into account, the loans and other credit the group extended over the past six months were flat compared to the same period in the previous year. But deposits increased by 8%.
FNB normalised profit before tax declined by 19% over the six months, but its customer base in South Africa increased by 3% to 8.5 million customers. Its deposits in SA grew by 19%, but ,”non-performing” loans increased by 26%.
FirstRand's share price rose by more than a percent by Thursday midday, and was last trading at R52.84.
Grindrod reports loss, as property deal collapses
Grindrod reported a headline loss of R168 million for the past year, which is slightly smaller than its loss in the previous year. Its revenue from core operations remained flat at R4.7 billion.
Its coastal shipping, container depots and multi-purpose terminal businesses saw profit growth of 15%, while Maputo Port's profit rose by 18%. Grindrod Bank was also profitable.
But a transaction to sell a big part of its private equity and portfolio (provided to Kwa-Zulu Natal North Coast property companies) fell through in December 2020. The company wrote off a part of the portfolio's value last year.
By midday on Wednesday, Grindrod's share price was up a percent to 503c.
Sasfin sees rise in bad debt
Sasfin saw a 66% decline in its half-year headline profit due in part to credit impairment provisions.
Its total income declined by 1.45% for the period.
The company's credit loss ratio doubled 240 bps. Some 80% of the loans it extended are up to date.
Murray & Roberts suffers loss
The construction group Murray & Roberts suffered a half-year loss of R167 million, from a profit of R163 million previously. Its revenue from continuing operations remained flat at R10.8 billion.
"Considering the group's order book of R60.5 billion and near orders of R19.9 billion, it is well positioned for a return to profitability in FY2022 and to achieve meaningful earnings growth in the short to medium term," the company said.
Standard Bank warns of profit hit
In a market update, Standard Bank has warned that its annual headline profit will be 40% to 50% lower than in 2019. Its results will be released next week.
ARM profit more than doubles
African Rainbow Minerals, founded and chaired by Patrice Motsepe, reported a 134% increase in its half-year headline profit to R5 billion, thanks in part to a surge in profit from its platinum operations. ARM Platinum's headline profit increased by R1.5 billion to R2 billion.
ARM Ferrous' headline profit climbed by 60% to almost R3 billion, as its iron ore division's profit doubled thanks to higher US dollar iron ore prices, higher export sales volumes and a weaker average exchange rate, which were partially offset by a 16% increase in unit cost of sales. But ARM Coal reported a headline loss of R222 million.
ARM interim dividend doubled to R10 a share.
Cashbuild doubles profit
Cashbuild, southern Africa's largest retailer of building materials, doubled its headline profit over the past six months, with revenue up 21% to R6.7 billion. South Africa has seen a spike in DIY and home improvement during lockdown, as consumers work from home.
Spur reports improved trading in February
Spur's half-year revenue dropped more than 40%, while headline profit was down 75%,Group alcohol sales were 39% lower due to the ban on sale of all alcoholic drinks for part of the period.Sales for the months of September and November 2020 declined by 26.2% and 21.0% respectively in South Africa relative to the prior year, with October 2020 being a particularly strong trading month in South Africa, trading behind the prior year by only 7.2%.New lockdown restrictions in December and January hit sales - but Spur says trading showed a marked improvement in February 2021, thanks to longer trading hours as the curfew was extended. Sales for February 2021 were at 82% of the prior year, with Spur and RocoMamas being the strongest performing brands.
WBHO hit by Melbourne lockdown, weaker SA revenue
The construction group WBHO saw its headline profit slump by more than 80% over the past six months, with revenue down by 11% to R20.4 billion. SA revenue was down 12% and in Australia, income slumped 27% due to lockdown restrictions in Melbourne. But in the rest of Africa there was a 24% increase in revenue, largely due to strong activity in Mozambique.
$JSEWBO: 1H21 in-line with guidance. Order book steady. Has seen an increase in activity in mining and acceleration in public sector spending. In SA, there has been a "noticeable increase" in new projects from SOEs. Renewable energy projects under Eskom also picking up.— Chantal Marx (@chantal_marx) March 2, 2021
Civil servants want big wage hike
Public sector unions have demanded a CPI plus 4% increase in wage negotiations – while government is proposing a wage freeze for the next three years. Fin24 reports that they are also taking government to the Constitutional Court as they want government to honour the 2018 three-year wage agreement for CPI plus 1% increases. Government did not pay the increase last year.
New car sales down 13%
New car sales fell by more than 13% in February compared to a year ago, after a similar contraction in January. But vehicle exports for the first two months of the year were ahead of the same period in 2020, Naamsa reports.
Steinhoff makes R17bn offer to pay claims
Steinhoff is offering to pay R17 billion to claimants in more than 90 separate lawsuits in South Africa, Germany and the Netherlands stemming from the collapse of its share price. Under the scheme, some of these parties will receive about 5.5% of their claims.
Sea Harvest profit gains
Sea Harvest has seen its revenue for the past year grow by 10% to R4.4 billion, with headline earnings up 3%. The group benefited from good performances from its South African fishing unit, its Cape Harvest Foods segment (which includes Ladismith Cheese) and the Australian operations.
Gold suffers worst month since 2016
Gold saw its worst month since November 2016, falling 6% in February. The precious metal has fallen out of favour as investors become more optimistic about global growth, and as US government bond yields spike, which means that gold is less appealing as it doesn’t offer interest payments. It was last trading at $1,735/oz.
The rand is still weak, at R15.00/$ this morning.
Bidvest boosted by hygiene services in UK
The corporate services company Bidvest posted half-year headline profit growth of 6%, thanks in part to a strong performance from its newly acquired hygiene service provider in the UK, PHS. The group's interim dividend was hiked by 3%.
Bidvest says 95% of its employees have been able to return to work - "a massive shift from the approximately 75% of employees that were unable to work during the height of the lockdown in 2020".
Hyprop warns of third wave risk
Hyprop, which owns Hyde Park Corner, Rosebank Mall, Canal Walk, Cape Gate and other properties, has seen its headline profit slump from 329.9c in the six months to end December 2019, to only 114.6c in the same period in 2020. The company warns that a third Covid-19 wave remains a risk, "as do the long-term effects of the pandemic on an underperforming local economy". It expects an increase in rent reductions, and a rise in costs - especially for municipal and utility charges.
RCL Foods sees strong sugar, bread sales
RCL Foods - which owns brands like 5 Star maize meal, Bobtail, Rainbow and Farmer Brown - has seen its half-year revenue up 10.5% to R15.7, while headline profit jumped 12%. The company said sugar sales picked up, while baking delivered a "substantial improvement", underpinned by strong demand and a turnaround at the Gauteng bakeries. But lockdown restrictions continued to have a negative impact on pie sales.
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