Classic Business

Warwick Lucas, CIO of Galileo Asset Management

&

Prof Raymond Parsons, from School of Business and Governance at North West University

It’s been a blisteringly red-hot run for the country’s platinum group metals miners. It’s worth repeating the recent earnings numbers. Amplats reported a record EBITDA of R41.6 billion, Sibanye Stillwater’s EBITDA increased by 230% year-on-year to more than R49 billion, Implats EBITDA rose by 231% to just over R25 billion. Even ROYAL Bafokeng Platinum, which listed on the JSE 10 years ago as the first community company to do so, rewarded shareholders with a maiden R1,5 billion dividend during the 12 months ended December 2020 on the significant growth in its cash flows.

Over 12 months, the FTSE/JSE Africa Platinum Mining Index is up an eye-watering 226% as of last night’s close, thanks to surging prices for palladium and rhodium, dug up with platinum and used in vehicle autocatalytic converters.

The question now on investors lips is how long can this last?

Michael Avery sat down with Rene Hochreiter, Mining Analyst at Noah Capital Markets; and David Holland of Fractal Value Advisors and Adjunct Professor at the University of Cape Town Business School, to get two differing views.

Exxaro, which supplies coal to Eskom, has declared a record ordinary dividend after getting a boost from its best ever thermal coal exports and a weaker rand in its year to end-December.

The group has also announced a special dividend and share buybacks after selling additional parts of mineral sands company Tronox, which is bringing in an estimated R5.6bn

Michael Avery spoke to Riaan Koppeschaar, Finance Director of Exarro Resources about the outstanding force majuer issue with Eskom and ho the political dynamics between Australia and China are impacting South African coal exports.

Rieka Van Wyk, board member and chair of the Legal Committee of the Ecommerce Forum of South Africa

Chantal Marx, head of equity research at FNB Wealth and Investments

Johan Kruger

Head of Context

Consulta

Peter Attard Montalto, Head of Capital Markets Research Intellidex

Jeremy Sampson, MD of Brand Finance Africa

Gert Claasen

Technology & Innovation Executive - Safripol

Nedbank full year 2020 results were broadly in-line with consensus expectations.

The market was well-guided to a 57% decline in HEPS in line with the mid-point of the guided range.

Nedbank Africa Regions saw the largest decline in headline earnings, declining 97% y/y in stark contrast to peers. Nedbank’s SADC exposure, Zimbabwe in particular being the main drag.

Retail Business Banking saw a ~70% decline in headline earnings, while CIB saw a 41% decline. This dynamic is consistent with the peers.

The elephant in the Nedbank room at the moment are the revelations that have come tumbling out of the Zondo Commission that Nedbank benefited improperly from its relationship with Gupta-linked state capture enabler regiments Capital. Nedbank released a statement recently stating that Nedbank was not aware at the time of entering into any of the transactions in question of any associated unlawful or corrupt conduct by Regiments. Nedbank denies that it was complicit in any such unlawful or corrupt conduct that may have been perpetrated by Regiments and others.

But These commission agreements set up a conflict of interests. Regiments was supposed to be advising its clients, in this case ACSA, in their best interests meanwhile it was being incentivised by Nedbank to direct business Nedbank’s way and was in turn profiting from double dipping effectively.

Michael Avery spoke to Nedbank CFO Mike Davis about the allegations which nedbank contines top deny. He also said the bank refuses to release the paper trail citing confidentialy even when opressed onw hwther the bank would release a redacted version.