Here’s what caught our attention on Wednesday:
1.TymeBank has a new CEO
TymeBank announced the appointment of its new CEO Tauriq Keraan on Wednesday. Keraan previously held the position of TymeBank’s deputy CEO and he takes over from former CEO Sandile Shabalala who resigned in June for personal reasons. According to the company’s statement, Keraan played a pivotal role in the development and inception of TymeBank in 2012, and its subsequent market launch in 2019. The leadership change is effective immediately.
2. Massmart business in crisis?
Massmart’s incoming CEO Mitch Slape has his work cut out for him. The retail and wholesale giant says it expects to report an operating loss of up to R30 million for the six months to June. Retail analysts say Massmart’s businesses, more specifically its largest division Massdiscounters, is in need of a major ‘Edcon-like’ scrutiny and rationalisation. The Massdiscounters division expects to see losses increase to between R395 million and R425 million for the period, from R95 million in 2018.
3. Distell trading statement
In a trading update released on Wednesday, Distell – the maker of brands like Pongrácz sparkling wine and Savanna cider – said it expects to see a drop in basic earnings per share for the year ended June 30, 2019 of between 44% and 49%. Distell attributes losses to the impairment taken on its investment in Best Global Brands, as well as a credit loss provision of R266.1 million for its investment in Zimbabwe.
The company also sees headline earnings per share falling between 1% and 6% to 6.7 cents and 40.1 cents, compared to 668.2 cents in 2018. Final results will be published on August 28 2018.
4. Mpact results
Paper and plastics packaging company Mpact is reporting a 27.9% increase in headline earnings per share to 39 cents for the six months ended June 30, 2019. The company’s revenue climbed R5.2 billion, up 4.2% while underlying profit increased by 29.4% to R218 million. The company also sees underlying earnings per share increasing 25.1% to 39.4 cents. Mpact pins its results to recent capital investments, which it says more than offset the challenging trading environment and market conditions. The company is declaring an interim gross cash dividend of 18 cents, up 20%.
5. Rand update
The rand is hovering around the R15 mark after rating agency Moody’s cited risks to the country relating to power utility Eskom. On Tuesday, Moody’s said the state-owned utility ‘urgently’ needs a turnaround plan as it sees its capital structure as unsustainable. Government last week said it would provide an additional R59 billion to Eskom over the next two financial years, after it reported losses amounting to R20 billion.
Adding to local woes is the US-China trade war, which is hurting emerging market currencies across the board. US President Donald Trump implemented a 10% tariff on an additional $300 billion worth of US imports from China. China retaliated, saying it woud no longer import US agricultural produce like soybeans and pork. The rand was at R14.88 to the dollar at 8:50.