COMPANY NEWS IN BRIEF

Cashbuild cuts dividend almost a third

Cashbuild's shares fell over 4% on Wednesday morning after it slashed its interim dividend by nearly a third, with SA's biggest building materials retailer reporting that earnings are being squeezed as struggling South Africans holding back on home renovation spending.

Revenue fell 4% to R5.6 billion for the six months to 25 December, while diluted headline earnings per share fell 38% to 704 cents. The company said it would pay shareholders a 400c interim dividend, a 32% fall.

The company, which has a chain of 316 stores and supplies building material products directly to cash-paying customers in the middle- to lower-income segments, said it typically serves home builders and improvers, as well as contractors, farmers and traders.

Its shares dropped 4.09% to R190 in early morning trade just after the market opened at 09:00, having lost more than 30% over the past 12 months.

Looking forward, the company expected conditions to get tougher in the next six months, saying that group revenue for the six weeks post the period end were 8% lower than the comparative six-week period in the prior year.

"We continue to expect trading conditions to remain challenging," CEO Werner de Jager said in a statement.

"Although our operations are less affected by load shedding due to either generators, battery power or solar systems at our stores, these installations come at a cost," he said.-Fin24

MTN Ghana reports profit surge

MTN Ghana, Africa's biggest mobile operators third-most profitable market, says investment in its network and of its surplus cash helped offset tough economic conditions in the west African country in its 2022 year, when profits grew more than a third, and subscribers by double digits.

Profit after tax rose 42.7% to 2.85 billion Ghanaian Cedi (R4.05 billion) in the 12 months to end-December, when group service revenue grew 28.3%, while mobile rose by 12.8% to 28.6 million.

Economic conditions in Ghana have been difficult, with the country struggling with a surge in inflation and rising government debt, raising the prospect of a sovereign debt crisis.

The average monthly inflation rate during the year 2022 was 31.5% and rose for twelve months in a row to reach 54.1% in the month of December, MTN Ghana said, with authorities in the country responding by increasing interest rates.

Finance income increased by 161.3% on gains from the investment of surplus cash in call and fixed-term deposits, the company said.

The group also invested about R3 billion in modernisation of infrastructure, improve IT systems and expand network capacity and coverage across the nation, rolling out 400 2G, 400 3G and 1 142 4G sites.-Fin24

Harmony Gold interim profits rise

Harmony Gold has reported a 36% rise in half-year net profit, as a strategy to invest in higher-margin, longer-life assets has begun to pay off.

The miner on Wednesday reported an increase in net profit from R1.4 billion in the six months to end December 2021 to R1.9 billion in the comparative period in 2022.

Revenue of R23.3 billion increased 6% while operating profit grew 7% to R5.4 billion. Headline earnings per share was 18% higher at R2.93 a share. Earnings per share grew 31% to reach R2.98.

The miner reported a 5% decrease in total gold production to mainly due to the closure of its Bambanani mine in June last year. Underground recovered grades however increased to 5.68g per tonne, up from 5.39g per tonne. Harmony enjoyed a 12% increase in average gold price received while all-in sustaining costs grew by 11%.

No interim dividend was declared due to the allocation of capital towards near-term copper and growth projects.

"Our strategy of allocating growth capital towards high-margin, long-life assets has started to deliver the desired results", said Harmony CEO Peter Steenkamp.-Fin24

Load shedding is slashing Woolworths' profits

Food and fashion group Woolworths has increased its first-half earnings by more than half and nearly doubled its interim shareholder payout, with a sharp rebound in Australia helping to offset load shedding in South Africa, which is costing it R15 million per month in lost profits.

While load shedding's total impact on adjusted operating profit for the period came in at about R90 million, strong results from Australia saw a surge in sales off a low base due to Covid-19 lockdowns in the previous reporting period. This helped lift headline earnings 70% to R2.74 billion for its six months to 25 December.

Headline earnings per share rose by just more than three quarters, while the company upped its dividend by 96.9% to 158.5c per share, representing about a R1.6 billion payout.

The JSE-listed retailer was, however, cautious about its outlook for its second half, saying there could be slower profit growth from its continuing operations as it expected the trading environment to "prove more challenging".

It said higher inflation and interest rates were anticipated to bring more pressure to bear on consumer demand and costs, while in SA "an imminent resolution to the debilitating power crisis and stimulus for economic growth appears remote".-Fin24