| Friday 22 October 2021 Good morning Voornaam,
Yesterday was a bright red day on the JSE, with resources counters taking the most damage. The ALSI ended the day -1.25% down while the Resources index took a -2.8% hit. Jitters about Evergrande are still giving investors opportunities to buy their chosen dips.
Sasol dropped -4.7% after releasing a production and sales update for the three months ended September. Everyone forgets that there's also a coal export business inside Sasol, which is experiencing the same issues with Transnet that the broader industry is complaining about. Overall, sales volumes in Sasol were down vs. the prior quarter across most product lines in the Energy and Chemicals segments.
Kumba dropped -3.77% after announcing an increase in quarterly production to 10.8 Mt while sales dropped to 10.1 Mt. With yet another nod to the state of our p ort and rail infrastructure in this country, full year production and sales are expected to be at the low end of guidance (40.5 Mt and 39.5 Mt respectively). Interestingly, the sales to markets outside of China helped support an average year to date realised price of USD181 per wet metric tonne, 17.5% above the benchmark price.
In other mining updates, Anglo American's production is up 2% vs. Q3 2020. Diamonds and iron ore were the standout contributors, with copper and metallurgical coal down vs. the prior year. South32 also released a quarterly report, maintaining FY22 production guidance and highlighting a 7% increase in manganese production, including a quarterly record at South Africa Manganese. Quarter-on-quarter though, production in most metals was lower.
Encouragingly, the RMB Holdings board has politely declined the ridiculously cheeky offers from Brightbridge and Fledge for large parts of the property portfolio. Unfortunately, a long way down in the SENS announcement, the board also acknowledges that Brightbridge is the "most likely acquirer" due to their deep knowledge of the business. This leaves the fund in a tricky situation in achieving an orderly value unlock for shareholders.
Vivo Energy is the R26bn company that you've possibly never heard of. The company is the leading pan-African retailer and distributor of Shell and Engen-branded fuels and lubricants. Between 130 - 140 new sites are expected to be added by the end of 2021 and again in 2022.
Quantum Foods, the largest producer of eggs in SA, expects HEPS for the year to September 2021 to be between 27% and 42% lower than the previous year. The company attributes this to high raw material costs and the impact of the outbreak of avian flu back in April.
Metrofile is acquiring 70% of IronTree Internet Services, with the remainin g 30% to be purchased in 2024. The deal value will be between R80 million and R140 million, with the maximum applying if 2024 revenue is R100 million. IronTree will enhance Metrofile's digital offering to clients.
In the final announcement of the day, tongues were set wagging by Rebosis agreeing to sell a massive office property portfolio for R6.3 billion to a subsidiary of Vunani Capital Partners Limited (VCP). If the deal goes ahead, VCP will only hold between 6% and 9% of the portfolio, with the rest held by equity investors who are needed to make the deal viable. Those investors are currently unnamed.
Other than the excellent DealMakers summaries to finish off the week, I've written a feature on Clicks' earnings announcement. Have a lovely weekend!
The Finance Ghost
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