Here’s what caught our attention on Monday:
1. SAA CEO steps down
Vuyani Jarana, CEO of loss-making state carrier, South African Airways, resigned over the weekend, citing a lack of funding and a drop in government support for the airline’s turnaround plan. His resignation comes as SAA faces a mountain of debt. Jarana’s resignation is the second high profile departure of a CEO from a South African parastatal in a week, following Eskom CEO, Phakamani Hadebe’s stepping down, reportedly for health reasons. Both utilities are now under pressure to find a replacement for these key positions.
2. Delta Property results
Real estate investment trust, Delta Property Fund, which is a fully black-managed fund and holds a property portfolio of R11.4 billion, has published its results for the year ended February 28, 2019. The company is reporting a marginal decrease in full year distributable earnings to 73.84 cents per share, compared to 97.24 cents in 2018, but says it is in line with its revised guidance to the market. Delta Property Fund’s net property income decreased by 9.7%, attributable to provisions raised during the year. The company says a full year distribution of 55.39 cents has been declared, down from 97.24 cents in 2018.
3. Aspen concludes deal with Lactalis International
Aspen Pharmacare has announced the completion of the divestment of its nutritionals business to French company, Lactalis Group. The transaction was completed for a gross consideration of €740 million on May 31, 2019. Aspen says the net cash inflows from the transaction will amount to approximately €635 million, adding that the financial effects remain in line with Aspen’s expectations.
4. Vehicle sales data
Vehicle sales dropped 5.7% to 40 506 units in May from 36 794 in April, data from the National Association of Automobile Manufacturers of South Africa showed on Monday. Sales have dropped every month this year except April. The decrease in purchases are being attributed to the general subdued economy.
5. Rand update
The week ahead will see the release of Q1 GDP figures on Tuesday, Sacci business confidence on Wednesday and the Q1 current account on Thursday, keeping traders cautious. The rand strengthened on Friday, mostly due to a weaker US dollar after data showed that US consumer spending had slowed in April and as global trade tensions continue to rise. On Monday, the rand was at R14.58 to the dollar at 8:41.