COMPANY NEWS IN BRIEF
Northam Platinum warns of profit fall as low PGM prices persist
South Africa's Northam Platinum warned of a sharp fall in profit on Wednesday, saying it expected an uncertain global economic outlook to keep platinum group metal (PGM) prices low for "some time". It said its headline earnings per share for the year to June 30 could decrease by as much as 87% to between 3.24 rand and 5.66 rand from 24.15 the previous year.
This is mainly due to a 35.5% fall in the rand price for its metals and despite a 7.3% increase in sales volumes, Northam said in a trading statement.
"The current price environment may last for some time and this, combined with higher general inflation, is placing pressure on the entire PGM sector," Northam said.
Nedbank Group analyst Arnold Van Graan said Northam's operational performance, which increased refined metal output from its own production by 10%, had lessened the impact of low metal prices and kept unit cost increases below inflation.
-REUTERS-
Botswana aims to negotiate bigger stake in HB Antwerp diamond dealer
Botswana intends to renegotiate its proposed purchase of a stake in Belgian gem dealer HB Antwerp to double the size of its shareholding at no extra cost following the downturn in the diamond market, the country's mines minister said on Tuesday.
Botswana is the world's biggest diamond producer by value, meaning its economy has been disproportionately hit by a drop in demand for diamonds caused by a global economic slowdown.
Lefoko Moagi told parliament the weaker diamond market had also affected the company's valuation, giving the country room to renegotiate.
"We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023," Moagi said. "Instead of the 24%, we will negotiate to get 49.9% for the same amount initially proposed.”
Finance ministry budget documents showed in February that the country had set aside 890 million pula ($65.95 million) for the 24% stake, valuing the Belgian company at about $275 million.
The HB Antwerp deal was announced during Botswana's negotiations for a new sales contract with Anglo American's diamond unit De Beers in March 2023.
As Botswana sought to increase its power to market its stones outside a decades-old agreement with De Beers, it said the HB Antwerp deal would strengthen its presence in the downstream diamond industry.
It includes supplying the trader with rough diamonds for five years through the state-owned Okavango Diamond Company (ODC).
-REUTERS-
DBSA hails 'stellar' result despite forex hit; declares maiden dividend
The Development Bank of Southern Africa (DBSA) reported a slight drop in its annual net profit, primarily due to lower foreign currency gains on the back of a more resilient rand and a rise in non-performing loans in the rest of Africa. The state-owned development bank, which lends in dollars and euros to fund projects outside of South Africa, said net profit fell 11.5% to R4.6 billion for the year ended in March, allowing it to declare a maiden dividend of R48 million to its sole shareholder, the National Treasury. During the year, the group had approved a dividend policy allowing it to distribute a portion of its profit.
On the downside, non-performing loans (NPL) jumped as loans in the rest of Africa underperformed, while the DBSA's unlisted equity investment portfolio also saw a slight decline due to negative fair value adjustments and capital redemptions.
The DBSA's sustainable earnings, which exclude currency exchange gains or losses, rose 7% to R4.5 billion for the year, thanks largely to an 18% jump in net interest income to R7.7 billion. Cost optimisation strategies also enabled the bank's cost-to-income ratio to improve to 21% from 23.5% the previous financial year, while total assets increased 9% in the year to R118.3 billion, driven by higher disbursements and funding activities. The DBSA also reported a robust liquidity and capital position, with its total equity base increasing 9.2% to R52 billion, while total cash holdings at end-March totaled R10.8 billion.
-FIN24-
The Ackerman family's voting control at Pick n Pay has come to an end
Retail group Pick n Pay said on Tuesday its founding Ackerman family have now seen a three-percentage-point reduction of their voting rights to 49%.
Ackerman Investment Holdings is the sole holder of Pick n Pay B shares, which have the same voting rights as ordinary shares but aren't entitled to distributions. In May, the family announced it would allow its voting control to fall below 50% after a planned R4-billion rights offer, also immediately giving up the right to nominate the chairperson, CEO, and chief financial officer. This entity directly held just 25% of Pick n Pay as of 2023, but had been a controlling shareholder after receiving voting shares during the collapse of a pyramid structure in 2016.
On 8 August, shareholders had approved a change in the entitlement of the Ackerman family to B shares to a ratio of 1.64254 per ordinary share, from 1.98061 before. The reduction in voting rights has been "undertaken to support Pick n Pay in its transformation", the group said on Tuesday.
Pick n Pay has also been encouraged by the success of the rights issue, which was heavily oversubscribed, seeing it as a sign of faith in its brand and turnaround strategy.
After 14 years as chair, Gareth Ackerman will step down from the position next year. He, along with siblings Suzanne Ackerman and Jonathan Ackerman, will remain on the board.
-FIN24-
Rand, JSE gain after US inflation surprise
Stocks and currencies in developing economies extended gains Tuesday after the latest US data fuelled wagers that the Federal Reserve will start lowering interest rates as early as next month.
The MSCI gauge for emerging currencies jumped to session highs after US producer prices rose by less than forecast in July, sending US yields lower. The Indonesian rupiah, the Philippine peso and the South African rand registered the biggest appreciations in a basket of peers. By Tuesday late afternoon, the rand was trading around R18.15/$, after hitting R18.50 last week. A year ago, the rand was trading at R18.94.
The JSE's All-Share Index ended the day around half a percent higher, with Santam (+5%), Harmony (+4%) and DRDGold (+4%) the major winners.
-BLOOMBERG-
South Africa's Northam Platinum warned of a sharp fall in profit on Wednesday, saying it expected an uncertain global economic outlook to keep platinum group metal (PGM) prices low for "some time". It said its headline earnings per share for the year to June 30 could decrease by as much as 87% to between 3.24 rand and 5.66 rand from 24.15 the previous year.
This is mainly due to a 35.5% fall in the rand price for its metals and despite a 7.3% increase in sales volumes, Northam said in a trading statement.
"The current price environment may last for some time and this, combined with higher general inflation, is placing pressure on the entire PGM sector," Northam said.
Nedbank Group analyst Arnold Van Graan said Northam's operational performance, which increased refined metal output from its own production by 10%, had lessened the impact of low metal prices and kept unit cost increases below inflation.
-REUTERS-
Botswana aims to negotiate bigger stake in HB Antwerp diamond dealer
Botswana intends to renegotiate its proposed purchase of a stake in Belgian gem dealer HB Antwerp to double the size of its shareholding at no extra cost following the downturn in the diamond market, the country's mines minister said on Tuesday.
Botswana is the world's biggest diamond producer by value, meaning its economy has been disproportionately hit by a drop in demand for diamonds caused by a global economic slowdown.
Lefoko Moagi told parliament the weaker diamond market had also affected the company's valuation, giving the country room to renegotiate.
"We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023," Moagi said. "Instead of the 24%, we will negotiate to get 49.9% for the same amount initially proposed.”
Finance ministry budget documents showed in February that the country had set aside 890 million pula ($65.95 million) for the 24% stake, valuing the Belgian company at about $275 million.
The HB Antwerp deal was announced during Botswana's negotiations for a new sales contract with Anglo American's diamond unit De Beers in March 2023.
As Botswana sought to increase its power to market its stones outside a decades-old agreement with De Beers, it said the HB Antwerp deal would strengthen its presence in the downstream diamond industry.
It includes supplying the trader with rough diamonds for five years through the state-owned Okavango Diamond Company (ODC).
-REUTERS-
DBSA hails 'stellar' result despite forex hit; declares maiden dividend
The Development Bank of Southern Africa (DBSA) reported a slight drop in its annual net profit, primarily due to lower foreign currency gains on the back of a more resilient rand and a rise in non-performing loans in the rest of Africa. The state-owned development bank, which lends in dollars and euros to fund projects outside of South Africa, said net profit fell 11.5% to R4.6 billion for the year ended in March, allowing it to declare a maiden dividend of R48 million to its sole shareholder, the National Treasury. During the year, the group had approved a dividend policy allowing it to distribute a portion of its profit.
On the downside, non-performing loans (NPL) jumped as loans in the rest of Africa underperformed, while the DBSA's unlisted equity investment portfolio also saw a slight decline due to negative fair value adjustments and capital redemptions.
The DBSA's sustainable earnings, which exclude currency exchange gains or losses, rose 7% to R4.5 billion for the year, thanks largely to an 18% jump in net interest income to R7.7 billion. Cost optimisation strategies also enabled the bank's cost-to-income ratio to improve to 21% from 23.5% the previous financial year, while total assets increased 9% in the year to R118.3 billion, driven by higher disbursements and funding activities. The DBSA also reported a robust liquidity and capital position, with its total equity base increasing 9.2% to R52 billion, while total cash holdings at end-March totaled R10.8 billion.
-FIN24-
The Ackerman family's voting control at Pick n Pay has come to an end
Retail group Pick n Pay said on Tuesday its founding Ackerman family have now seen a three-percentage-point reduction of their voting rights to 49%.
Ackerman Investment Holdings is the sole holder of Pick n Pay B shares, which have the same voting rights as ordinary shares but aren't entitled to distributions. In May, the family announced it would allow its voting control to fall below 50% after a planned R4-billion rights offer, also immediately giving up the right to nominate the chairperson, CEO, and chief financial officer. This entity directly held just 25% of Pick n Pay as of 2023, but had been a controlling shareholder after receiving voting shares during the collapse of a pyramid structure in 2016.
On 8 August, shareholders had approved a change in the entitlement of the Ackerman family to B shares to a ratio of 1.64254 per ordinary share, from 1.98061 before. The reduction in voting rights has been "undertaken to support Pick n Pay in its transformation", the group said on Tuesday.
Pick n Pay has also been encouraged by the success of the rights issue, which was heavily oversubscribed, seeing it as a sign of faith in its brand and turnaround strategy.
After 14 years as chair, Gareth Ackerman will step down from the position next year. He, along with siblings Suzanne Ackerman and Jonathan Ackerman, will remain on the board.
-FIN24-
Rand, JSE gain after US inflation surprise
Stocks and currencies in developing economies extended gains Tuesday after the latest US data fuelled wagers that the Federal Reserve will start lowering interest rates as early as next month.
The MSCI gauge for emerging currencies jumped to session highs after US producer prices rose by less than forecast in July, sending US yields lower. The Indonesian rupiah, the Philippine peso and the South African rand registered the biggest appreciations in a basket of peers. By Tuesday late afternoon, the rand was trading around R18.15/$, after hitting R18.50 last week. A year ago, the rand was trading at R18.94.
The JSE's All-Share Index ended the day around half a percent higher, with Santam (+5%), Harmony (+4%) and DRDGold (+4%) the major winners.
-BLOOMBERG-
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