Star 2022-11-24

LOGISTICS utility Transnet yesterday told Parliament how it planned to spend the R2.9 billion pledged in the Medium-Term Budget Policy Statement to recapacitate the State-owned entity. Transnet wants to fix 350 of its locomotives to fill in gaps in capacity, for customers such as Eskom, ArcelorMittal South Africa (Amsa) and the timber industry. Transnet group chief executive Portia Derby told the standing committee on appropriations that in some instances, as with the Majuba power station, it only had 21 trains to service the station when it required at least 42, while the chrome industry needed 35 trains to the available 20 and other sectors needed 198 locomotives against the available 138. The utility needs the R2.9bn to fix the 315 locomotives which would complete the fleet at 1…

E-commerce segment is expected to be profitable by financial 2025 NASPERS, the global internet group, yesterday reported a heavy 74% slide in core headline earnings to $372 million (R6.4 billion) in the six months to September 30 due to lower profitability across associates and fair value losses for the investment in China-based Tencent. The decline was partially offset by reduced share-based compensation expenses, as well as lower finance costs due to a revaluation gain on euro bonds, chief executive Bob van Dijk said in the results yesterday. Of the lower contributions from associates, $879m related to Tencent. There was also lower profitability from Delivery Hero of $530m due to a once-off gain in the prior year. These were offset by an increase in Naspers’ share of gains…

FOOD prices have surprisingly pressured consumer inflation to rise marginally after two consecutive months of decline, leaving the South African Reserve Bank (SARB) with no choice, but to hike its benchmark lending rate for the last time this year. Another interest rates hike will make the cost of borrowing even higher, lifting the repurchase rate – the rate at which the SARB borrows money to commercial banks – from an already elevated 6.25%. Data from Statistics South Africa (StatsSA) yesterday showed that the headline inflation rose to 7.6% year-on-year in October, up from 7.5% in September. This was the first time consumer prices had risen since July’s 7.8% peak, and was above market expectations of 7.4% and the upper limit of the SARB’s target range of 3% to 6%. On…

MOBILE operator Telkom’s interim profit dived 52.9% as consumers moved away from legacy technology to new technologies such as fibre and LTE. In its interim results for the six months ended September 30, 2022, the mobile operator said yesterday that profit dipped by 52.9% year-on-year to R641 million, while headline earnings per share (Heps) decreased by 51.9% to 137.2 cents. The mobile operator’s Heps was expected to decrease between 45% and 55%. Earnings before interest, taxes, depreciation and amortisation (Ebitda) decreased by 17.3% to almost R5m. “This was due to limited top-line performance resulting from legacy revenue declines and pressures on our cost base. Direct costs increased, driven by materially higher handset and equipment costs. “While the rest of the operating costs were well-managed, energy costs increased significantly…

EVERY business that I talk to is suffering from load shedding. It is simply not possible to run a modern economy without power. We can forget about being competitive in the Fourth Industrial Revolution if we cannot fix the basics like power, water and the rule of law. After all, electricity was the main source of progress in the Second Industrial Revolution and that was 150 years ago! I haven’t lost faith that we will win in the end, but to survive and even thrive we must confront the brutal facts of our current reality and take the right actions to adapt. These facts are that 2022 has already been South Africa’s most intensive load shedding year, while energy availability (at 53%) is also at an all-time low. Things will…

BUSINESS confidence in South Africa has dipped further into contractionary territory as a majority of business owners feel pessimistic about the economic climate and the ongoing power cuts that have crippled activity. The business confidence index (BCI) slipped to 38 points in the final quarter of 2022, with more than six out of 10 respondents dissatisfied with prevailing business conditions. The BCI survey was conducted by the University of Stellenbosch’s Bureau for Economic Research (BER) between October 26 and November 14 on behalf of Rand Merchant Bank (RMB), covering just more than 1 000 senior executives in the building, manufacturing, retail, wholesale and motor trade sectors. Although the BCI was little changed, RMB/BER said the outcome hides striking dynamics among the sectors, both positive and negative. After…