Bumper Sea Harvest; Sugar tax hits RCL Foods; Vox buys out Investec; manufacturing sentiment slips

By Linda van Tilburg

  • Sea Harvest Group reported a surge in first-half sales and profits, after buying former rival Viking Fishing Group and the remaining shares of a business in Australia, as well as a move outside of seafood with its acquisition of Ladismith Cheese. The company’s first half sales surged by 86% to R1.87bn. CEO Jean-Pierre Verster said Sea Harvest’s plans to diversify in order to mitigate risks of relying solely on revenue from SA fisheries was therefore seemingly paying off, especially in the light of the recent delay of the Fishing Rights Allocation Process (FRAC) for 2020. The company’s stocks on the JSE however dropped by more than 5% in yesterday’s trade.
  • RCL Foods reported a 60.8% drop in full-year profit yesterday hurt by a poor performance in its sugar and chicken divisions. The company said declining local market demand, mainly due to the implementation of the Health Promotion Levy (sugar tax), resulted in an adverse sales mix and a significantly lower sugar result. Chicken was negatively impacted by low selling prices due to an oversupplied retail poultry market with dumped imports at record levels, as well as a rising feed cost environment. Shares in RCL Foods however jumped by more than 8% on the JSE.
  • Other winners on the stock market yesterday included Sun International, lifted by more than 10% after the release of its half year results which indicated marginal increases in revenue and earnings. The Rand closed the day firmer trading at R15.24 to the dollar while the JSE ended softer; the All Share Index lost 0.86% with Sasol and Steinhoff losing more than 6% in value.
  • Vox Telecom SA shareholders including Rand Merchant Bank agreed to buy out fellow investor Investec in a R2bn ($130m) deal, backing further growth at the South African fibre-network operator. Metier Private Equity and the internet company’s management are also part of the transaction. The group said it was looking to accelerate fibre roll-out outside of South Africa’s main cities and to the country’s small businesses. Investec was part of a group that bought Vox for R452m in 2011, and owned about one third of the company.
  • South African manufacturing industry sentiment slid back into contraction in August, signalling that recovery in July was unsustainable. Absa’s Purchasing Managers’ Index fell to 45.7 points from 52.1 in July. Absa said respondents continued to be fairly downbeat about exports for a third straight month, while domestic demand likely also weighed on orders.
  • The petrol price will be increasing by 11c per litre for both 93 and 95 octane while diesel will be increasing by 26c per litre. The price of illuminating paraffin will jump by 24c per litre wholesale. The main reason for the fuel price increase is the weakening rand.
  • Zimbabweans are relying on Tesla to help them pay their bills. Amid power outages of as long as 18 hours a day, Econet Wireless, Zimbabwe’s biggest mobile-phone operator, is turning to the Elon Musk’s Tesla for batteries that can keep its base stations running. The installation of 520 Powerwall batteries, with two going into each base station, is the largest telecommunications project in which Tesla has participated to date. Econet has around 1,300 base stations in the country and two other mobile-phone companies operating there. Distributed Power intends to install more batteries and could eventually roll the project out to other African countries.