NATIONAL NEWS - Here’s what caught our attention on Wednesday:
Tiger Brands results
Packaged foods and beverages company, Tiger Brands delivered a mixed set of results, under what it says were difficult trading conditions during the six months ended March 31, 2019.
The company is reporting a 12% drop in headline earnings per share from continuing operations to 762 cents, while operating income decreased by 24% to R1.5 billion and revenue from continuing operations fell by 2% to R15.4 billion.
The company says in its statement that subdued consumer spending increased sales volumes in its domestic business, while low price inflation impacted margins.
The company has declared an ordinary dividend of 321 cents per share as well as a special dividend of 306 cents per share, as a result of the once-off offer received from the Brimstone sale.
Furniture and retail company, Lewis, says its traditional brands continued to gain momentum during the year ended 31 March, as the company sees a 24.3% increase in headline earnings per share to 376.2 cents, and an 18.4% increase in headline earnings to R308.4 million.
The company’s operating profit increased 16.8% to R443.0 million and the operating margin increased by 7.2% within management’s guided range of 5 and 10%. Lewis added that it is also beginning to see the benefits of its strategy of diversification across market segments and retail channels.
Finally, a total dividend of 234 cents per share has been declared, up 17%.
April inflation rate
South Africa’s headline consumer inflation rate for April is expected to be released by the Statistics office on Wednesday. In March, consumer inflation increased to 4.5% year-on-year from 4.1% in February 2018, and is recorded as the highest inflation rate since December, amid a sharp rise in fuel prices.
South Africa’s January core inflation rate, which excludes the prices of food, non-alcoholic beverages, petrol and energy is also expected to be released on Wednesday.
In March core inflation increased by 4.40% compared to the same month in the previous year.
Update to follow.
Eskom debt speculation
Eskom is under pressure to work fast and find ways to remedy its growing debt load, which is said to be approaching R500 billion. Bloomberg is reporting that the state utility has, however, not consulted stakeholders who own R243 billion of its bonds on its plans to cure its massive debt pile.
Eskom is currently not selling enough electricity to cover its operating and borrowing costs, and has already been given a R69 billion bailout over three years by the government.
According to Bloomberg, the utility says it is in negotiations with lenders to remedy the situation, but a credit analyst claims the utility needs to work fast and make decisions to service the debt.
Sasol’s Lake Charles project estimate jumps to $12.9bn
The cost estimate of Sasol’s Lake Charles Chemicals Project in Louisiana has been bumped up to as much as $12.9 billion, the petrochemicals company said in a Sens statement on Wednesday, adding that the revised estimate includes a contingency of $300 million.
The revised increase is almost $1 billion more than what was expected three months ago. The company attributes the revised increase to adjustments to the February 2019 cost forecasts, remaining work and additional contingency costs.