In SA, we have a busy week ahead and, among others, expect the following companies to report results:
- Raubex (Interim Results) – Management has guided for headline earnings per share (HEPS) to improve between 10% and 20% y/y, with growth driven by strong execution of its order book. The group has a healthy balance sheet and remains highly cash generative. The project pipeline is appealing and bodes well for growth over the remainder of the financial year.
- Redefine Properties (Full-Year Results) – Distributable income per share for FY22 has been guided to be flat y/y at 52.6 ZAR cents. The dividend per share is expected to range between 42.1 ZAR cents and 47.3 ZAR cents, representing a pay-out ratio of between 80% and 90%. In its latest update, the company noticed an improvement in occupancies as well as relatively high retention rates, though renewal growth remained negative, while lease escalations deteriorated.
- Sirius Real Estate (Interim Results) – The group provided a trading update for the half-year ended 30 September 2022 with strong rental collections despite recent disposals. Like-for-like growth in Germany was 2% while the UK realised growth of 4%. Despite the current economic headwinds, the group continued to see strong demand for the range of conventional and flexible spaces offered. Due to the strong rent roll performance, and the highly diversified income stream, the company expected portfolio values to increase, despite potential yield expansion across the multi-let sector.
- Telkom (Interim Results) – The group made a slow start to the year, with revenue over 1Q23 falling 3%, due to weakness in the Mobile (-2%), BCX (-4%) and Fixed Legacy Voice (-20%) segments. According to Bloomberg, however, revenue for FY23 is expected to be flat y/y, suggesting a sustained recovery during the second half of the year. Nevertheless, HEPS are expected to fall 8% y/y, due to increased input-cost prices amid the high inflationary environment.
- Sappi (Full-Year Results) – Per recent guidance, EBITDA over the final quarter of the year will come in ahead of the record high seen during 3Q22 (+156% y/y to $371 million), due to improved market conditions, with lower-than-expected energy prices in Europe (particularly gas). HEPS for the full year are expected to total $1.09, compared to 15 US cents in FY21, signalling a strong recovery from the group this year.
- Multichoice (Interim Results) – The company reported weak results over FY22 with revenue growth of 4% y/y, amid a 23% y/y decline in HEPS. For FY23, however, the market expects a significant improvement in HEPS (+211% y/y), with revenue growth coming in marginally higher (+5% y/y).
- Richemont (Interim Results) – For 1Q23 the group reported sales growth of 20% y/y, driven by strong performances in Europe, the Americas and Japan, which helped offset weakness in China as the region continued to battle with Covid-19 restrictions. Sales growth at the half-year point, however, is expected to slowdown (2Q23: +7%, 1H23: +9%) as market uncertainty persists.
- The Foschini Group (Interim Results) – Management has guided for HEPS to increase between 8% and 28% y/y, as retail turnover grew 31% y/y. Overall growth was driven by upbeat performances across all categories including TFG Africa (+23%), TFG London (+4%) and TFG Australia (+105%).
On the corporate actions front, Remgro, Zeder Investments and Altron will trade ex-dividend on Wednesday, 9 November 2022. Several companies are set to host shareholder meetings during the week, including the likes of RMI Holdings, RCL Foods, Trellidor, AVI, BHP and Italtile.
Earnings releases in the US continue next week. So far, around 421 companies in the S&P500 have reported results for the quarter ended 30 September 2022, with 291 (70%) boasting a positive EPS surprise and 238 (57%) reporting a positive revenue surprise. Releases next week will be headlined by:
- Berkshire Hathaway – The group is set to report a subdued performance over 3Q22, with adjusted EPS expected to increase just 3%, and revenue expected to increase 8%, as supply-chain challenges and high inflation continue to weigh on the operations of the underlying businesses. The diverse nature of the group, as well as its strict adherence to long-term principles, however, should support growth in the future.
- Akamai Technologies – Adjusted EPS are expected to fall 16%, amid a 2% increase in revenue, as the company remains under pressure due to increased competition from hyperscale cloud providers and vendors, such as Cloudflare and Fastly. Increased demand in the company’s Security and Compute segments will be key for its longer-term growth and will also help offset a slowdown in its Core Content Delivery Network (CDN) business.
- The Walt Disney Company – 4Q22 adjusted EPS are set to climb 38%, with revenue anticipated to increase 15%, as the company continues to benefit from an acceleration in its streaming-service (Disney+) subscriber numbers. The domestic parks business also made a sizeable contribution to growth amid a strong recovery in demand.
In Europe, we have AstraZeneca on our radar:
- According to Bloomberg, adjusted EPS and revenue for the pharmaceutical giant will increase 43% and 10% respectively, with growth supported by multiple positive clinical-trial outcomes, notably for Camizestrant, a drug that could potentially treat breast cancer. Other near-term growth drivers for the company include EU approval of the Tezepelumab asthma drug and the Nirsevimab RSV antibody, among a few others.
In the Asia-Pacific region releases are expected from vehicle manufacturers Suzuki, Honda, and Nissan.
Economics Weekly: Trade surplus steadily compresses amid dissipating support factors
South Africa unexpectedly recorded a nominal trade surplus of R19.70 billion in September, reflecting an increase from the downwardly revised R6.20 billion (previously R7.20 billion) surplus in August. The outturn exceeded the Bloomberg consensus prediction of a narrower trade surplus of R4.7 billion.
