Inertia dominant

The year’s performance was a long way from disastrous for Hudaco, which managed to nudge headline EPS marginally in the right direction, but its results announcement eloquently paints a picture of a missed opportunity. It talks of starting the year with a new president and a new hope for the country, but ending up frustrated, for the time being at least, by a combination of economic inertia and political rhetoric. Hudaco clearly got excited about the recovery plan detailed in President Cyril Ramaphosa’s maiden state of the nation address, and felt the pain when it didn’t translate into meaningful investment.

It had hoped that this would produce real growth for its businesses, which have been pottering along in austerity mode, but it has now come to see that the extent of past mismanagement means it is going to be some time before the benefits start to flow. Nor were matters improved by the extreme volatility of the rand, which had a strong start to the year and then dropped about 33% against the dollar from March to September.

Hudaco is expecting more of the same in the run-up to the elections in May, with inertia being the dominant theme as business adopts a wait-andsee approach. The company hasn’t entirely abandoned its optimism, and points out that its businesses are well placed to reap immediate benefits from any kick-start to the economy driving investment in the sectors that represent its traditional markets. Everybody’s praying for a positive electoral outcome, followed by real drive from the government on the economic front.