ThinkDaily 22 February 2023

The JSE ended lower on Tuesday in line with global markets as the resources index fell by almost 3%. Wall Street posted its worst performance of the year yesterday after an unexpectedly strong S&P Global’s composite purchasing managers index release which shows that the US economy is not slowing down yet.

On the oil front,  Russia has recently announced plans to cut output by 500,000 barrels a day in March or about 5% of total production in retaliation to Western sanctions. 


Sibanye-Stillwater Historical Share Price (Source: ThinkTrader Web)

In company-specific news, Sasol released a mixed set of first-half results yesterday morning, which were supported by higher oil prices but offset by operational difficulties in their mining and synfuels operations. Sasol will pay a R7 dividend per share. No dividend was paid in 2020 and 2021, but in 2022 it paid a final dividend of R14.70/share. The company expects further pricing and demand volatility for the rest of 2023, given a volatile global macro environment.

Motus released a positive set of interim results for its first half, the company upped its dividend 9% year on year to 300c as its revenue rose 14% year on year to R51.22bn, operating profit 22% to R2.62bn and profit 10% to R1.55bn, despite shortages of some vehicle models over the last 18 months and consumers disposable income weighed by high inflation and interest hikes.

Adcock Ingram increased its dividend due to higher revenue, trading profit and profit. Its profit increased by almost one fifth, trading profit 15% and revenue 8% year on year in the six months to end-December as the interim dividend was hiked 20% to 125c despite an uncertain macro environment, higher energy, food and commodity prices and higher inflation.

Kumba Iron Ore saw its net profit decrease by 55% to R19.7bn (2021: R43.7bn), while headline earnings per share dropped 46% to about R56 per share due to a decrease in global iron ore prices and disruptions to Transnet’s rail and port services. The dividend for 2022 will be 56% less than the previous year. The company will pay a total dividend of R45 per share against the 2021 dividend of R103 per share. The miner was also affected by extreme weather conditions.  

Sibanye-Stillwater released a profit warning yesterday, cautioning the market that it expects to report a 40% to 46% year-on-year decrease in earnings per share (EPS) and 46% to 51% decrease in headline earnings per share (HEPS) for the year ended December 31 due to the three-month strike at it’s South African gold operations; severe weather in Montana, in the US; and lower platinum-group metals (PGMs) basket prices.

The South African Finance Ministed, Enoch Godongwana will give his budget speech for this year this afternoon at 14:00
 
Market Moves (21 February 2022)