Our currency was the casualty on the market yesterday, trading at around R15.70 to the dollar. The mid-R13s back in June are now a distant memory. With a hike in the repo rate of 25bps dominating the headlines, some are concerned that the SARB has erred by focusing on inflationary pressures that are driven by costs (like the oil price) rather than demand.
MTN Group is continuing its strategy of exiting frontier markets, like Yemen. Much of the recent share price momentum is a result of investors believing that MTN is focusing on the right regions. MTN Yemen has around 4.7 million subscribers and contributes 0.3% of group EBITDA. MTN will sell the business to Zubair Investment Center LLC, the minority shareholder in MTN Yemen.
Liberty Holdings released an operational update for the nine months ended September. S tandard Bank's acquisition of Liberty is expected to close in the first quarter of 2022. The SENS announcement talks about the "special relationship" between the companies since 1974, which sounds like one of Mrs Ghost's romantic movies on Netflix. Liberty's recent new business growth is strong, although mix and margin remains a challenge. Group AUM is up 8% this year to R838 billion.
Grindrod Shipping has announced earnings for the three months and nine months ended 30 September. The latest quarter has been immensely profitable, with headline earnings of USD44 million, taking the nine-month total to USD65 million. In the comparable nine-month period in 2020, the group recorded a headline loss of USD14.5 million. A quarterly dividend of USD0.72 per share has been declared.
Nepi Rockcastle has confirmed that its tenants are achieving sales in line with pre-pandemic levels, despite footfall still being 11% lower than Q3 2019. There are concerns though, with Eastern European countries seeing an uptick in Covid cases and restricting movement of unvaccinated people. Net operating income for the first nine months of 2021 was in line with the prior period overall and 6% higher if we exclude the impact of disposals.
Tsogo Sun Hotels has released a trading update for the six months to September 2021. Revenue has approximately tripled vs. the prior period but the headline loss per share has only improved by between 70% and 76%. Unfortunately, system-wide room sales in September were still at only 48% of September 2019 levels.
Investec has reported strong growth in revenue in the six months to September and adjusted earnings per share ahead of pre-Covid levels. Return on equity was 11.2% and net asset value per share increased 9.3%. Interestingly, Investec will distribute a 15% holding in Ninety One to shareholders, after which Investec will only hold a 10% interest in the asset management business that it previously unbundled and separately listed.
Orion Minerals has announced that the Prieska Copper-Zinc Project will be entirely powered by renewable energy and green hydrogen sources. This is expected to save significant energy costs for the project and obviously aligns with ESG and Carbon Net-Zero targets as well. Good news all round!
Bowler Metcalf is expanding into the medical and agricultural packaging sectors with the acquisition of Skye Plastics for an undisclosed sum. A due diligence and formal sales agreement is still required.
Sirius Real Estate has raised another EUR300 million through a corporate bond issuance, a strong follow-up to the EUR400 million raised in June.
Have a great weekend!
The Finance Ghost
