COMPANY NEWS IN BRIEF

Cashbuild to withdraw from Zambia

Cashbuild is closing its two underperforming stores in Zambia, which has proven to be a tough trading environment for the building materials retailer, said CEO Werner de Jager.

The group on Wednesday released its financial results for the year ended 26 June. Its revenue dipped 12% to R11.1 billion as the surge in DIY projects experienced during the Covid-19 lockdown ran its course.

The group's headline earnings declined by a third to R436 million.

De Jager noted that its performance in the previous financial year was "exceptional" - profits more than doubled. As a standalone, the 2022 financial year's performance is still solid – and the second-best year to date in terms of performance, said de Jager. "It is still a very good set of results on a standalone basis," he said.

Anthony Clark, analyst of Small Talk Daily Research, noted that Cashbuild had an extraordinary run during the pandemic that continued into the post-pandemic recovery period. But the slowdown in growth for the building materials, DIY and construction sectors overall was expected.

De Jager also discussed the group's strategic plans for the year ahead. It will "extract" itself from Zambia by closing down the two stores in the country. "In fact, they have stopped trading," De Jager said. Cashbuild used to have three stores in the country, and the remaining two are still underperforming, noted De Jager.

Cashbuild has 318 stores across southern Africa, including Namibia, Eswatini, Lesotho, Malawi and Botswana. During the period, it opened four new stores but closed five stores – some of which were affected by the looting, and two that were not performing. There are five stores that haven't reopened since the looting – four of them have dates to reopen, but the final one will probably be closed, he added. -Fin24

SA's Aspen signs vaccine deal with SII

Aspen Phamacare has signed a deal with the Serum Institute of India to manufacture and sell four Aspen-branded vaccines for Africa.

That's as the South African company seeks to utilize its near-idle Covid-19 vaccine production lines.

Shares in Aspen jumped 6% in afternoon trade on Wednesday on news of the deal and after it posted a 31% increase in full-year profit.

CEO Stephen Saad said the deal gives Aspen an assured pipeline of vaccine orders for years to come. That's after concerns that its 450-million-dose vaccine production line was being put at risk.

The drugmaker has a contract with Johnson & Johnson to package its Covid-19 vaccine in vials.

Earlier this year it also extended an agreement allowing it to package, sell and distribute the vaccine in Africa under its own brand Aspenovax.

But it has not yet received a single order for the COVID vaccine. Aspen said in a statement that under the Serum agreement it will produce hexavalent, pneumococcal, polyvalent meningococcal and rotavirus shots. Those are all vaccines commonly administered in Africa.

The statement added that the two companies may also discuss expanding the agreement to include new products. -Reuters

Impala Platinum's profit plunged

Impala Platinum's profit plunged almost a third as the mining company faced lower metal prices and grappled with several operational issues.

Profit for the year ended in June, declined 30.8% to R33.13 billion, down from R47.85 billion in the previous year.

Headline earnings of R32 billion fell by 12%. Revenue of R118.3 billion represented a decline of 9% compared to the previous year due to softer metal prices as well as a 4% drop in sales flowing from lower production volumes and extended furnace maintenance.

Cost of sales increased by a percent to R77 billion, due to increased cash costs and depreciation, which also ate away at profits.

“In a period typified by increasing global macro-economic headwinds, escalating geopolitical conflict, and several localised challenges, Implats continued to reap the benefit of elevated metal pricing, albeit off the record levels achieved in the prior comparable period," said Implats CEO Nico Muller.

Still, the group’s balance sheet remained debt-free, with closing net cash increasing to R26.5 billion, from R23.5 billion in the previous year. The Implats board approved a final dividend of R8.9 billion or R10.50 per share, bringing the total dividend for the year to R15.75 per share, compared with R22.00 in 2021.-Fin24

Santam hammered by worst natural catastrophe

Santam's profits were hammered by an unprecedented level of claims in the first half of 2022. The group said it was "one of the most challenging underwriting periods in the company's history".

The KwaZulu-Natal floods alone cost the insurer R4.4 billion in gross claims – with its reinsurers taking on a large part of the payouts. Total claims paid out by the insurer in the six months to 30 June came to R14.2 billion - almost R4 billion higher than in the same period last year.

The insurer did sound an alarm in its trading update in June, saying that the KZN floods were "by far" the largest natural catastrophe in its history. Still, it estimated that its gross exposure would only be around R3.2 billion at the time.

"The current estimate of Santam's gross exposure to the KZN floods is R4.4 billion. However, significant adjustments to gross exposures may still occur. The KZN floods were the most significant natural catastrophe in Santam's history," said Sanlam in a statement.The insurer said its reinsurance programme provided effective protection against this natural catastrophe, limiting the net impact to Santam to only R566 million, including reinsurance reinstatement premiums.

The significant rise in claims saw Santam's net underwriting margin – which measures profits after paying claims and other costs – fall to 2.3% from 6.7% in June 2021, well below the group's target range of 5% to 10%. This was despite the 7% growth in Santam's gross written premiums and the reduction in the Covid-19-related contingent business interruption (CBI) claims provisions.-Fin24