Capitec continues growth streak

Capitec, South Africa's third most valuable bank, has booked 17% compound annual growth for five -consecutive years, saying this is indication of the underlying strength of its business, given the period has marked by civil unrest, a pandemic, the war in Ukraine, as well as devastating floods in KwaZulu-Natal.

Headline earnings rose 17% to R4.7 billion in the lender's half year to end-August, almost 60% above pre-pandemic levels, with active clients rising 13% to 19 million, and transactions on its banking app jumping by more than half.

Receding Covid-19 conditions had prompted a return of the bank's pre-pandemic risk appetite, with total loan sales and disbursements growing 35% to R26.5 billion, although it said on Thursday that given recent increasing interest rates and cost-of-living pressures on consumers, it had tightened its criteria, leading to more muted growth as the period drew to a close.

The lender upped its interim dividend 16.67% to R14 per share, 85% higher than what it paid for the six months to end-August 2019, and representing about a R1.62 billion payout.

The group’s interest income on loans increased by 13% to R7.4 billion, also benefiting from rising interest rates as well as growth of its gross loan book, which rose 18% to R77.9 billion.

The firm also reported growth in "quality banking clients" of 16% to 5.1 million which it said helped with transaction volumes. A quality banking client is a client who has stable inflows into their account and stable product usage over a consecutive 3-month period.-Fin24

Barloworld hints Avis is heading to the JSE

Shares in Barloworld climbed more than 6% on Wednesday, after the diversified industrial group hinted that it is likely to unbundle and separately list its car rental business, Avis Budget Southern Africa, also flagging double-digit increases in continuing revenue and operating profit so far in its 2022 year.

In early trade, its shares had risen 6.64% to R95.55, with the firm reporting a "robust performance" from its equipment businesses in the 11 months to end-August, amid strong demand from the mining industry. The firm also reported good growth for its Ingrain division, sugar producer Tongaat Hulett's former starch business, which Barloworld acquired towards the end of 2020.

Barloworld said on Wednesday the work to unbundle its Avis business was “now far advanced”. It said it had been evaluating the exit of Avis either through or a sale or an unbundling and separate listing of the business, but that to date, none of the offers received were attractive enough.

As a result, Barloworld said it continued to "progress preparatory work for an unbundling and separate listing of Avis in parallel".

It remains "committed" to separating the Avis business this calendar year, adding that a further update regarding this would be made when it released results in November.

Casparus Treurnicht, head of research and portfolio manager at Gryphon Asset Management, said the main reason behind share bounce is the further detail on the unbundling of Avis. "That is an immediate value unlock story and without a doubt that is why the share is up so strongly this morning."-Fin24

Eskom will not finalise financial statements

Eskom will not finalise its annual financial statements by the statutory deadline of 30 September due to "significant key matters" that will take some time to close out with auditors, Public Enterprises Minister Pravin Gordhan has told the Speaker of Parliament.

Two other entities reporting to Gordhan – Denel and Alexkor – will also miss the deadline to finalise and submit their annual financial statements.

In a letter to the Speaker published in Parliament's Parliament's Announcements, Tablings and Committee Reports (ATC) on Wednesday, Gordhan says he cannot comply with the Public Finance Management Act's requirement that annual financial statements and reports are tabled within six months of the end of the financial year.

In the case of Eskom, Gordhan says he expects the annual report to be finalised by the end of October or the beginning of November. Gordhan writes that as the previous year's audit ended late and Eskom had to change auditors, the audit for 2022 started late.

Eskom has been unable to service its debt for several years and is dependent on bailouts from the Treasury to remain a going concern. The company is hoping that a solution to transfer some of its debt to the national government will be announced at the October medium-term budget policy statement.-Fin24

PetroSA parts ways with CEO

State-owned oil company PetroSA has parted ways with its CEO only two years into his contract under circumstances the company says it will not disclose.

Pragasen Naidoo, a chemical engineer and a former group chief of operations at Petrosa's holding company, the Central Energy Fund, was appointed in January 2020. He was the first permanent CEO since 2014.

Naidoo had three years left on his contract and is believed to have received a large settlement from the company. The chairman of the board of Petrosa Nkululeko Poya said he would not comment on the matter as it was between the employer and an employee. Naidoo also declined to comment.

Naidoo's departure follows the resignation of the board that appointed him. The board, headed by Frans Baleni, a former director of the Development Bank of Southern Africa (DBSA), served for only a year until asked by the CEF to resign because the holding company had plans to restructure the group. CEF then appointed some of its own directors, including Poya, to serve on the Petrosa board.

Petrosa is technically insolvent and has made large losses for several consecutive years. However, it has continued as a going concern in the faith that its turnaround strategy would bear fruit. Over the past year, it has retrenched about 400 staff, mostly on a voluntary basis.-Fin24

Karpowership aims for environmental ruling

Karpowership, the Turkish company seeking to supply 1 220 megawatts of power to South Africa, will refile an application to the environment department in a bid to move its project forward at a time when the nation is suffering its worst-ever power cuts, a person familiar with the situation said.

The application will be filed by Jan. 8 and a response from the department will be given by the end of March, the person said, asking not to be identified as a public statement hasn’t been made. The company will then aim to complete its financial arrangements in May and electricity from its gas-fired power plants mounted on ships may be supplied about a year later, the person said.

Karpowership in March last year won more than 60% of an emergency power tender seeking to secure 2,000 megawatts of electricity to ease shortages that have plagued South Africa since 2008. While the companies were originally meant to commence supply this month, projects equivalent to only 7.5% of that total have concluded their financial arrangements.

Eskom is currently reducing supply to the grid by between 3,000 and 4,000 megawatts, causing rolling blackouts, because of breakdowns at its coal-fired power plants. The power cuts have restrained economic growth and spurred criticism of the government.

The Department of Environmental Affairs didn’t immediately respond to a request for comment. -Fin24


Namibian Sun 2022-12-04

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