Star 2024-02-16

The Treasury’s Gold and Foreign Exchange Contingency Reserve Account may be a hedge THE SOUTH African Reserve Bank (SARB) will likely kick-start its rate-cutting cycle at the end of next month, Standard Chartered economists say. They added that the National Treasury may have to consult the central bank on the potential use of its Gold and Foreign Exchange Contingency Reserve Account (GFECRA) to hedge against short-term fiscal concerns. The SARB’s GFECRA is currently treated as “a contingent asset of the State” while the “value of its unrealised gains help to reduce net debt” levels. Standard Chartered’s chief economist for Africa, Razia Khan, said hedge funds and civil society economists were arguing that South Africa did not need excessive reserves and that a proportion of GFECRA gains could be used either…

SOUTH32 is scrambling for a way out of a potential electricity supply crisis at its Mozal Aluminium project in Mozambique that is powered by Eskom. Meanwhile port delays at Richards Bay forced a reduction in shipments, although elevated capital expenditure yielded an uplift in manganese production from its two mines in the Kalahari Basin. Spun off BHP Billiton in 2015, South32 yesterday reported a 15% decline in revenue for the half-year period to December at $3.1 billion (R59bn), with after tax profits from all of its operations also falling 92% to $53 million. With basic earnings per share for the half year also down 92% at US$1.2 cents, investors in the company on the JSE reacted negatively, shaving off 3.7% off its shares, which traded at R36.72…

Primedia Outdoor, a division of Primedia, has been slapped with a R2.7 million penalty and has to give R1.3m free ad space to small, medium and micro enterprises (SMMEs). The Competition Commission yesterday said it welcomed the Competition Tribunal’s green light to a consent deal reached between the Commission and advertising company Primedia Outdoor. The February 13 Tribunal order follows an investigation by the Commission. It found that between September 2004 and March 2018 media firms, under the auspices of an industry association Out of Home Media South Africa (OHMSA), had entered into collusive agreements, which fixed prices and trading conditions in contravention of the Competition Act. OHMSA members include: Boo! Media, Insight Outdoor, Outdoor Network, Adreach, Tractor Outdoor, SP Media, Primedia Outdoor, JB Media, Likhwane Media, Anchor Zedo, Jonet…

ESKORT has given a vote of confidence to the South African economy – in spite of domestic headwinds – with a huge expansion of its food production facility in Heidelberg, the small town where the company has produced pork products for 70 years. The leading pork manufacturer yesterday unveiled its new 10 000m² development in Heidelberg, which has expanded its Gauteng production capacity by 50% and will drive hi-tech efficiencies in its production. The enlarged factory is equipped with the largest continuous box freezer in Africa, capable of freezing 120 000kg of products to -18°C every 24 hours. Boxes move on a conveyor belt through the freezing chamber where the air is kept at -41°C – a temperature that occurs naturally only in polar regions. Chilled and frozen…

AUDIT, tax and accountancy advisory company Deloitte is exiting Zimbabwe, with its management in the country buying out the operation, a development that may point to a shrinking market for the services it offers. The exit of Deloitte comes on the heels of the departure of banks such as Standard Chartered and Barclays. However, other accountancy and audit firms such as Ernst and Young are still offering services in Zimbabwe. “This heralds the exit of one of the big four firms. The reasons for the exit may be many, but principally a lack of competitiveness, a shrinking market, etc. “The event may not necessarily be a major one on its own, unless followed by exit of other big firms such as PricewaterhouseCoopers,” said banker and economic analyst Matthew Chidavaenzi. Zimbabwean…

Blue Label Telecoms said core headline earnings per share were expected to increase between 47.07% and 47.2% for the six months to November 30, 2023, from 3.94 cents at the same time a year before. Earnings per share were expected to increase between 45.49% and 45.84% to a loss equivalent to 8.74c a share, a statement said yesterday. Core headline earnings amounted to R420 million (November 2022: R35m), equating to core headline earnings of 47.15c per share (3.94c per share). Excluding the positive contributions of R65m in the six-month period, and the negative contributions of R421m in the comparative period, due to the recapitalisation of Cell C, core headline earnings fell by R100m (22%) from R455m to R355m, and core headline earnings a share fell 23% from 51.72c a share…