Hits&Misses

High interest rate environment boosts Standard Bank, hurts AECI

SANTAM reported a 64% surge in net profit for the year to December as favourable investment markets more than compensated for its underwriting margins, which came under pressure from claims related to floods in the Western Cape and other natural disasters. Net income climbed to R3.25bn from R1.98bn a year earlier as global bond and equity markets perked up in 2023 compared with a year ago.

HARMONY Gold will pay a record interim dividend after benefiting from a stronger gold price and a rise in output. The miner reported a 14% rise in total gold production for the six months to December, mainly as a result of higher recovered grades at its South African mining operations, Mponeng and Moab Khotsong, and at its tailings treatment facility near Klerksdorp.

STANDARD Bank expects its earnings to jump as much as 28% in the year to endDecember from the same period a year earlier, driven by the high interest rate environment. Africa’s largest bank by assets said in a trading update that its headline earnings per share would rise to between R25.22 and R26.25 from R20.50. Standard Bank, like its peers, has benefited from high interest rates, which boosted its lending margins.

AECI this week reported a 12% fall in full-year headline earnings per share to R11.32 due mainly to the prevailing high interest rate environment. Its mining business’s revenue rose 8.4% to R19.6bn, with a record earnings before interest and taxes (ebit) of just more than R2bn, up 18%, driven by new international contracts. Revenue from its South Africa-based chemicals business softened 4% to R8.15bn while ebit dropped

8% to R515m.

MOTUS reported a 27% drop in half-year profit after new vehicle sales volumes came under pressure. Headline earnings per share were R6.62 in the six months ended December, compared with R9.02 in the same period in 2022. The group has been grappling with high interest rates, loadshedding and rising competition in the passenger car market. It is looking to expand its international business further, saying South Africa’s growth potential is limited.

GRINDROD Shipping reported a loss of $9.6m (R184m) for the year to endDecember from a $103.4m profit the previous year. Its basic headline loss per share was $0.41c from headline earnings per share of $5.42 the previous year. Grindrod said a reduction in demand for dry-bulk vessels, weaker spot market rates, rising costs and impairment losses contributed to the weak performance. Grindrod owns and charters a fleet of drybulk vessels.