Here’s what caught our attention on Thursday:
1.The morning after Mboweni’s budget speech
South Africans are reeling following finance minister, Tito Mboweni’s budget speech on Wednesday. The minister’s stance on Eskom was that government would not be funding its debt, but will allow R69 billion over three years to support it. Furthermore, personal income tax brackets were not increased and GDP growth for 2019 was revised to 1.5% from 1.7%.
All eyes will now be on rating agency, Moody’s which may or may not downgrade SA’s sovereign ratings in the coming days. Reuters reported on Wednesday that Moody’s said the budget shows ‘limited fiscal flexibility’ within the challenging economic environment.
We’ll wait till then.
ICYMI: #Budget2019 in a nutshell
2.Adcock Ingram results
Pharmaceutical company, Adcock Ingram posted a ‘solid performance’ within each of its business units during the six months ended December 31 2018. The company is reporting a 16% increase in headline earnings per share to 217.2 cents, as well as a 16% increase in turnover to R3 595 million. The company says its results were achieved against the backdrop of a price-regulated environment, alongside tough trading conditions. A dividend of 100 cents per share has been declared.
Retailer Woolworths, which is reeling after the resignation of Australian unit, David Jones’ CEO and recent blows from local companies for alleged plagiarism, is reporting a 2.9% drop in headline earnings per share to 200.4 cents, while adjusted diluted headline earnings per share fell by 9.2% to 202.9 cents. The company says trading conditions are unlikely to improve in the short term, both locally and in Australia, but is betting on its FBH business restructuring and food and Country Road group for boosts. An interim dividend per share of 92.0 cents has been declared, down 15.2%.
4.Aveng trading statement
Construction firm, Aveng is projecting widening of headline losses and basic losses by more than 100% for the six months ended December 31 2018. The company says headline loss for the period will be between R742 million and R820 million, compared to a loss of R335 million in 2017. The basic loss in earnings will be between R876 million and R967 million, compared to a loss of R347 million previously. The company attributes its losses to the increase in the weighted average number of shares in the period. Results are expected to be published on February 25.
For the six months ended December 31 2018, Discovery says its normalised profit from operations decreased by 4% to R3 799 million, headline earnings decreased by 18% to R 2 252 million and normalised headline earnings decreased by 16% to R2 376 million. The company says its performance was a result of planned investment in five new businesses and ‘strong operating performances’ from all its businesses, with the exception of Discovery Life. An interim gross cash dividend of 101 cents per share was declared.