- Capitec has secured approval from the Competition Commission to acquire Guardrisk Life’s life insurance business, marking a significant step in its expansion into the life insurance sector. This follows Capitec’s announcement in April of a new life cover product, piloted among its employees with a 15% uptake. Capitec’s profit after tax for its insurance business rose by 12% to R3.17 billion in 2024. The bank began issuing credit life insurance policies in May 2023 under its own licence. By February 2024, it had 558,417 active policies, with a 3% increase in the average sum insured to R75.2 billion.
- Alex Beard, the former head of oil at Glencore, has been charged with corruption by the UK’s Serious Fraud Office (SFO) for allegedly conspiring to make corrupt payments to benefit Glencore’s oil operations in West Africa, specifically in Nigeria and Cameroon. As the highest-profile individual to be charged in a series of investigations into corruption and market manipulation at Glencore, Beard is scheduled to appear at Westminster Magistrates’ Court in London on September 10, 2024.
- Dis-Chem faced scrutiny over its transformation progress at its annual general meeting (AGM), where concerns were raised about its “zero Black representation” at the executive management level. This scrutiny follows a 2022 controversy involving a memo from then-CEO Ivan Saltzman that called for a hiring moratorium on white individuals. Although the memo was withdrawn, the company has been criticised for slow progress in racial and gender diversity. At the AGM, it was noted that Dis-Chem’s top management had no Black representation and only 14.2% senior management diversity. CEO Rui Morais acknowledged the issues, promising enhanced transformation efforts and better disclosure of diversity targets in future reports.
- Murray Munro, former CFO of Tongaat Hulett, has had his reconsideration application dismissed by the Financial Services Tribunal (FST), upholding the JSE’s public censure and R6 million fine. The FST’s decision confirms Munro’s disqualification from holding director positions for ten years and affirms the penalties for his role in the company’s accounting scandal. Analysts suggest this outcome could impact Munro’s defense strategy, possibly forcing him to self-fund his legal battles. Tongaat Hulett, currently in business rescue, faces ongoing civil and criminal proceedings related to fraudulent financial activities that severely impacted its financial results.
- Police fired tear gas in Abuja, Nigeria, to disperse protesters rallying against the high cost of living and economic reforms. Demonstrations occurred in multiple cities, including Lagos, where protesters demanded the reinstatement of subsidies for petrol and electricity, and measures to combat insecurity. President Bola Tinubu’s reforms, including fuel subsidy removals, naira devaluation, and increased electricity tariffs, have led to 34% inflation. Despite Tinubu’s call for patience, Nigerians complain of insufficient political sacrifice. Tinubu recently signed a new minimum wage law to ease the hardship, but many Nigerians remain unemployed or self-employed, exacerbating the economic strain.
- Mondi delivered a strong performance in the first half of the year, reporting underlying EBITDA of R11.3 billion, down from R13.6 billion in 2023 due to lower selling prices and inflationary costs. CEO Andrew King highlighted improved market conditions, stronger order books, and higher sales volumes. The company continues to invest R24 billion in organic growth, with significant contributions expected from 2025. Despite cost pressures, Mondi maintained a robust financial position, declared a R4.60 interim dividend, and reported net debt of R32 billion. Improved market demand and customer restocking led to increased volumes, with price benefits anticipated in the second half of the year.
- MTN Ghana has reported robust first-half earnings, with profit rising by 36% due to increased subscribers and service revenue despite a weaker cedi. The company posted revenue of 8.1 billion cedi, up 31.3%, while profit after tax grew to 2.33 billion cedi. Mobile subscribers grew by 3.9% to 28.4 million, and active data subscribers increased by 15.9% to 16.4 million. Mobile Money revenue surged by 44.8% to 1.9 billion cedi. The group invested 2.8 billion cedi in capex, and the interim dividend rose by 30% to 0.065 cedi per share. MTN Ghana continues to face macroeconomic challenges but remains committed to enhancing digital connectivity.
- ArcelorMittal South Africa (Amsa) reported a net loss of R1.2 billion for the first half of the year, a 240% increase from the previous year’s R359 million loss, due to trading and operational challenges. Revenue dropped by 3% to R20.5 billion. The loss was exacerbated by operational interruptions at the Vanderbijlpark blast furnaces and difficult trading conditions. Cash generated from operations fell by R607 million to R284 million, despite lower working capital needs and higher foreign exchange gains. Amsa, with a net debt of R3.8 billion, anticipates a gradual recovery in the second half of 2024, supported by operational improvements, increased production volumes, and potential market shifts. CEO Kobus Verster expressed confidence in capitalising on emerging opportunities. Internationally softening interest rates and provisional safeguard duties on hot-rolled steel are expected to aid recovery. The Amsa share price rose by 2% but has nearly halved over the past year.
- ZESCO, Zambia’s state-owned power utility, has agreed to purchase 218 megawatts (MW) of electricity from Eskom in South Africa to address a power shortfall. The deal aims to cushion a deficit of over 1,000 MW caused by reduced hydropower capacity due to lower rainfall and drier conditions. The imported power, expected to supply Zambia’s national grid this month, will help mitigate the impact of the Maamba Energy coal-fired plant’s routine maintenance shutdown, which will take out an additional 135 MW of power generation. The cost of the deal was not disclosed.
- Anheuser-Busch InBev reported stronger-than-expected core profit for Q2, with a 10.2% rise in normalised EBITDA, surpassing the forecast of 8.3% growth. Despite this, the world’s largest brewer saw its volumes and revenues fall short of expectations, with volumes down 0.8% and revenues up 2.7%, against the predicted 0.6% decline and 3.5% increase. CEO Michel Doukeris expressed satisfaction with the company’s performance amid ongoing recovery from Covid-19 impacts and inflationary pressures. AB InBev’s full-year outlook remains at 4%-8% core profit growth. Bad weather in China and inflation in Argentina significantly affected volumes and revenue in these regions.
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The Council for Medical Schemes (CMS) has advised medical schemes to cap their premium increases at 4.4% for 2025 to shield members from financial strain and the risk of losing health coverage amid the ongoing cost-of-living crisis. This guidance, posted on the CMS website, aims to ensure affordable annual contribution rates in line with the Medical Schemes Act’s mandate to protect beneficiaries’ interests. The recommendation aligns with the South African Reserve Bank’s 2025 CPI forecast. High inflation, interest rates, and consumer debt levels threaten members’ ability to afford premium hikes, potentially leading to lapses in coverage. The CMS previously reprimanded five major schemes, including Discovery Health and Momentum, for announcing 2024 increases without approval, ordering them to retract or issue disclaimers.
South African food inflation in June decelerated to 4.6% year-on-year (y-o-y), the Bureau for Food and Agricultural Policy (BFAP) reported in its latest ‘BFAP Food Inflation Brief’. Month-on-month (m-o-m), food inflation rose slightly by 0.5%. This marks the fourth consecutive month where y-o-y food inflation was lower than the overall consumer price index (CPI) headline inflation, which stood at 5.1%. The rand appreciated by 1.8% against the dollar y-o-y in June, reaching R18.42/$1. The Thrifty Healthy Food Basket cost R3,795 in June, up 4.1% from last year but down 1.5% from May, comprising 30.6% of a low-income family’s budget.
Packaging manufacturer Mpact has agreed to sell its Versapak business to Greenpath Recycling, a unit of Sinica Manufacturing, for R267.7 million. Greenpath will acquire Versapak as a going concern, with employees transferring to the buyer. The purchase price will be adjusted based on stock and certain employee liabilities. The sale excludes cash, debtors, creditors, and properties, with lease agreements in place for the operational sites in Paarl and Roodekop. The sale aligns with Mpact’s portfolio optimisation plan following a 2021 strategic review. The transaction awaits SA competition authority approval and is expected to close in Q4 2024. Mpact anticipates a significant drop in interim earnings.
Woolworths is struggling to compete in South Africa’s competitive online food delivery market. While its online sales grew by 13.3%, contributing 9.2% to total sales, its Woolies Dash service faces ongoing challenges. Competitors Pick n Pay and Checkers Sixty60 have outpaced Woolworths, with Pick n Pay’s online sales surging 74.4% and Sixty60 maintaining market leadership. Analysts note Woolworths’ affluent customer base should give it an advantage, but execution issues have hampered its progress. The SA food delivery market is expected to reach $1.1bn in 2024, with Checkers Sixty60 leveraging logistical efficiencies to dominate the segment.
Debswana Diamond Company reported a 49.2% drop in rough diamond sales for the first half of 2024, with sales falling to $1.29 billion from $2.54 billion year-over-year, according to the Bank of Botswana. The decline, driven by a global diamond market downturn, led to a 47.3% decrease in local currency terms. Debswana, a joint venture between the Botswana government and Anglo American’s De Beers, sells 75% of its diamonds to De Beers and the rest to state-owned Okavango Diamond Company. Following a new ten-year deal, ODC’s share of Debswana’s output will increase, aiming to boost national revenues.
Law firm Adams & Adams has appointed Stuart Boyd as its new COO, tasked with overseeing operational functions and enhancing innovation and client service. Boyd brings over 28 years of experience in legal and financial services, including nearly 13 years as COO at Webber Wentzel and a prior tenure at Adams & Adams. Boyd succeeds Dave Forbes, who is retiring after 15 years. Chairperson Kelly Thompson expressed enthusiasm for Boyd’s return, highlighting his strategic vision and leadership. Boyd, a Chartered Accountant, aims to support the firm’s growth and new strategic initiatives, reinforcing its position as a leading African law firm.
Lexus has launched its second plug-in hybrid model in South Africa, the NX 450h+ PHEV F Sport, priced at R1,336,200. This mid-size SUV boasts a system output of 227kW, accelerating from 0-100km/h in 6.3 seconds. With an 18.1 kWh lithium-ion battery, it offers an electric range of up to 76km and 30% better fuel consumption when in self-charging hybrid mode. The NX 450h+ comes in F Sport trim, featuring a range of standard features like a 10-speaker sound system, Head-Up Display, and Adaptive Cruise Control. This launch follows the introduction of the Lexus RX 450+ in April.
Mali will establish a state-owned airline, Mali Airlines-SA, more than a decade after the last national airline ceased operations. The military-led government announced that the new airline will serve regional capitals. Mali, a vast Sahelian nation, shares borders with seven countries, making road travel perilous due to ongoing separatist and jihadist insurgencies. Recently, Malian soldiers and their Russian allies faced significant casualties from ethnic Tuareg rebels and Islamist fighters. The Council of Ministers approved the airline’s creation on Wednesday. Due to fuel shortages in July, Bamako was unable to refuel commercial aircraft for a week, affecting airlines like Turkish Airlines and Ethiopian Airlines.
South African manufacturers‘ sentiment improved significantly in July, as political clarity boosted demand and business activity following the May 29 elections. The Purchasing Managers’ Index rose to 52.4 from 45.7 in June, marking the first return to expansion since April, according to Absa Group Ltd. This exceeded economists’ median estimate of 48. The data suggests a strong start to the third quarter, with orders increasing as political uncertainty diminished. The African National Congress, losing its majority for the first time in 30 years, formed a coalition with business-friendly rivals, alleviating fears of a leftist alliance. Business activity and new sales orders surged, and export sales rebounded after months of decline.