Five things making headlines in South Africa today

National Treasury outlines plans to save the economy, Adcock Ingram results, Bidcorp results and more.
Pharmaceutical company Adcock Ingram reports 11% increase in Heps for the year ended June 30, 2019. Picture: Moneyweb

Here’s what caught our attention on Wednesday:

1. Sale of Eskom power plants could help save the utility

Disposing of some of Eskom’s coal-fired power plants and selling electricity back into the grid may be one of the options government is considering to rescue the state-owned entity. Bloomberg is reporting that according to an economic policy paper released by National Treasury on Tuesday, the reforms could involve selling power stations through a series of auctions which would include related staff contracts, coal-supply contracts and environmental obligations. The sale could raise around R450 billion, although it is speculated that unions may oppose the proposal.

Read: Eskom could sell some coal-powered plants to raise R450bn

2. Adcock Ingram results

Pharmaceutical company Adcock Ingram is reporting an 11% increase in headline earnings per share to 421.7 cents for the year ended June 30, 2019. The company  says it delivered ‘robust results’ despite volatile trading conditions characterised by weak economic growth and a decline in consumer spending. The company’s revenue and gross profit increased 11% to R7.08 billion and R2.78 billion, respectively. The group disposed of its Zimbabwean enterprise and its investment in Ayrton Drug Manufacturing during the reporting period. Adcock Ingram has declared a final gross dividend of 100 cents per share.

3. Bidcorp results

Bidcorp is reporting a 12.5% increase in headline earnings per share to 1442.6 cents for the year ended June 30, 2019. The company’s trading profit increased by 11% to R6.7 billion and revenue of R129.3 billion is being reported, up 9.8%. The company, which specialises in food services through technology, attributes its performance to positive trading in most geographies including the UK and Europe, despite ‘low food inflation and moderate economic growth’. The company’s South African operations delivered stronger results in the second half even as tough economic conditions persisted, it says. A final gross dividend of 330 cents per share is being declared for the period.

Read: Bidcorp reports 12.5% rise in year profit

4. Distell results

Distell, the maker of alcoholic beverages including Savanna, Hunters cider and Nederburg wine, is reporting a 1.7% decline in headline earnings to R1.4 billion while headline earnings per share fell to 656.4 cents, down 1.8% for the year ended June 30, 2019. Comparable group revenue is up 9.4% to R26.2 billion. The company says its spirits category delivered strong revenue growth, buoyed mostly by white spirits. Its wine portfolio delivered muted growth as a result of wine supply shortages. A gross cash dividend of 240 cents is being declared.

Read: Distell turned off crisis-hit Zimbabwe

5. SA’s plans to boost GDP

National Treasury says it has a solution for South Africa’s high unemployment rate and slow economic growth problems. In a policy paper released on Tuesday, it has outlined plans including easing visa rules to enable more tourism and disposing of Eskom’s power plants to raise money. According to Bloomberg, Treasury says more needs to be done to improve education and South Africa’s public-transport systems, enabling more youth empowerment programmes and reducing a skills shortage. It says reforms could lift economic growth by 2 to 3 percentage points and create more than a million jobs over a decade.

Read: SA sees selling coal plants and visa reform boosting GDP

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