Companies reporting interim results include:
* African Rainbow Minerals – Per a recent trading statement, headline earnings per share (HEPS) are expected to increase between 34% and 44% y/y, to between R25.29 and R27.17, driven by higher profits from the manganese and coal businesses.
* AVI – Management has guided for HEPS to increase between 0% and 1% y/y, despite solid revenue growth (+7.2% y/y). The top-line figure was inflated by further price increases, while sustained pressure on input costs weighed on profitability.
* Bidvest – Over the four-month period ended 31 October 2022, the group saw good momentum in both revenue and trading profit, driven by improved overall activity amid strong contract wins. This was supported by robust expense management. Bloomberg consensus is looking for a 11.1% increase in revenue and a 9.4% improvement in earnings.
* Shoprite – In a recent trading update, management said that Merchandise sales were up 16.8%, Supermarkets RSA grew 17.5%, Furniture increased 8.6%, while the Other operating segments rose 12.5% in the six months to 31 December. The gross margin, however, came under some pressure, due to the group’s strong commitment to price leadership amid high inflation. The operating margin also took a knock, particularly due to massive diesel spend utilised in energy generation. Bloomberg consensus is looking for a 9.1% increase in EBITDA and a 26.9% improvement in earnings.
* Momentum – Normalised HEPS has been guided to increase between 40% and 55% y/y, due to an improved mortality experience (post Covid-19), particularly in Momentum Life. This was supported by an improvement in investment variances.
FY22 earnings are expected from:
* Nedbank – Per a recent trading statement, HEPS is expected to range between R28.20 and R29.40, representing growth of between 17% and 22% y/y.
* Royal Bafokeng Platinum – According to management, HEPS are expected to fall around 48.2% y/y to R12.03, due to operational challenges at the Styldrift mine, decreased Impala royalty income, on-mine inflation tracking higher than CPI and an increase in taxes.
* Quilter – Over the final quarter of the year, AUMA from continuing operations grew 3% q/q, to £99.6 billion and was down 11% y/y – this was mainly due to weak and volatile market conditions. Net client inflows were still in positive territory, but down to £159 million from £236 million.
* JSE – according to Bloomberg, Africa’s largest stock exchange is expected to report subdued results (HEPS: +1.71%; Revenue: +2.80%).
* Standard Bank – Increased transactional activity and fee growth, which more than offset elevated costs and impairments during the period, led to guidance for HEPS growth between 30% and 35% y/y.
* Sanlam – Recent guidance revealed that HEPS over FY22 will be between R4.16 and R4.60, compared to R4.38 in FY21. The company’s overall performance was impacted by lower mortality claims, credit and structuring earnings as well as a weaker underwriting experience in SA.
Also look out for releases from property companies MAS Plc, Hammerson, and Fortress REIT.
On the corporate actions front, Cashbuild will host a general meeting (GM) for shareholders to vote on the proposed odd-lot offer, while Nampak will seek shareholder approval for a proposed rights-offer and share consolidation. Transaction Capital will host its AGM. TFG Preference Shares, Emira Property Fund, BHP, and Sasol will all trade ex-dividend on Wednesday, 8 March 2023.
Corporate releases in the US have slowed down significantly as the earnings season draws to a close. At the time of writing, 491 companies in the S&P 500 have reported results, with 332 (68%) boasting a positive EPS surprise and 283 (58%) reporting a positive revenue surprise. Aggregate earnings, however, have declined ~2.7%, despite 5.7% growth in revenue. There are no specific names on our radar for next week.
In Europe we expect full-year earnings figures from Dufry, Admiral, Legal & General and Hannover Re.
Releases in the Asia Pacific region remain limited.
Economics Weekly – GDP Preview: A load-shedding induced decline in GDP and a possible two-quarter recession
Stats SA will release GDP data for the fourth quarter of 2022 on Tuesday, 7 March 2023. Based on the latest high-frequency economic activity data, we estimate that the economy relapsed in the fourth quarter by 0.4% q/q, following better-than-expected growth of 1.6% q/q in the third quarter. Our expectation is slightly better than consensus, which predicts -0.5% q/q. The decline in 4Q22 will confirm economy-wide weakness, but more particular in the goods-producing sectors. In contrast, some services sectors might have held up, limiting the decline.
