Here’s what caught our attention on Tuesday:
1. Absa results
The Absa Group is reporting a 3% increase in normalised headline earnings per share to 977.5 cents for the period ending June 30, 2019 and a 5% increase in headline earnings per share as per the international financial reporting standards to 920 cents. Normalised basic earnings per share rose 3% to 976.5 cents and the company’s net asset value per ordinary share increased 7% to 12 335 cents. Total normalised income increased 6% to R39.07 million. A dividend of 505 cents per share is being declared, up 3%.
2. SAA losses may amount to R9bn in the last year
State-owned airline South African Airways is not in good shape. According to Moneyweb, the airline has been in decline since 2012, and suffered total losses of nearly R18 billion between 2012 and 2017. The airline is yet to publish its 2018 annual report and, according to Moneyweb estimates, losses at the state carrier may have increased to more than R9 billion on the back of a weak rand and jet fuel price increases during the reporting period.
3. Steinhoff holds investor presentation
Embattled retailer Steinhoff is holding an investor presentation in Cape Town on Tuesday. The company’s CEO Louis du Preez is due to update shareholders on the company’s restructuring and financial restatement progress, as well as unpack events that transpired between December 2017, when the company’s accounting scandal emerged, to date. According to the retailer’s statement, the presentation will touch on its 2017 and 2018 annual reports, its 2019 H1 report and an operational outlook.
4. Market pricing in a credit downgrade
Eskom and South Africa’s related financial woes are not doing any favours for the market, which is said to have already priced in a credit downgrade for the country, even though rating agency Moody’s is only due to give its verdict in November. Bloomberg is reporting that South Africa’s risk premium has climbed since mid-July, when government announced funding plans for Eskom. Yields are also rising while those of other emerging markets fall, hinting that investors are positioning for fiscal deterioration and a credit downgrade.
5. Platinum miners join the EV revolution
Platinum-group metal producers such as Anglo American Platinum want in on the global electric vehicle boom. Bloomberg is reporting that the platinum miner is looking to find ways to develop a lithium battery that uses platinum-group metals instead of cobalt and nickel, as the EV boom poses a major threat to its biggest market. It is aiming to create a new multi-billion dollar source of demand for the metal. Amplats and miner Platinum Group Metals have already agreed to invest up to $4 million in Lion Battery Technologies to conduct research on the best way the metal can be used in a battery.