Sasol sees earnings crushed as oil drop 57%

In its trading statement for the six months ended 31 December 2015, Sasol advised shareholders that the group’s performance had been negatively impacted by highly volatile global markets. The group’s profitability was adversely affected by a 57% lower average Brent crude price, while the price of a basket of commodity chemicals fell by 23% compared to the previous year. However, these sharp declines were partly offset by a 24% weaker average R/$ exchange rate. As a result, the group expects Sasol’s headline earnings per share for the period to decline by between 23% and 28%, or by between R7.36 and R8.96, compared to headline earnings of R32.00 in the first half of the 2015 financial year. In addition, the group expects to see its earnings per share decrease by between 62% and 67%, or by between R19.86 and R21.47, from R32.04 in the previous corresponding period. However, on a normalised basis, which excludes the impact of once-off items, earnings per share are only expected to decline by between 8% and 13%. Lastly, the group’s results for the six months ended 31 December will be announced on the 7th of March 2016.
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Facebook delivers outstanding results

With US earnings season now fully under way, Facebook became the most recent high-profile company to deliver fourth quarter results. After falling by 2.97% in the regular session, Facebook’s shares surged more than 12% in after-hours trading. This was after the group announced it had easily topped analysts’ expectations. For the period, the group reported earnings of 79 cents per share on revenue of $5.84bn, beating expectations of earnings of 68 cents per share and revenue of $5.37bn. When compared to the previous period a year ago, earnings increased by 46%, while revenue came in 52% higher. Lastly, Facebook’s total active monthly users grew to 1.59bn, above estimates of 1.58bn.
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Apple misses on revenue but comfortably beats on earnings

Apple ended marginally higher during yesterday’s session, up 0.55%, as it rose to trade at $99.99 per share. However, the stock ticked lower in after-hours trade after releasing mixed results for the first quarter. During the period, Apple reported earnings of $3.28 per share, comfortably beating analysts’ expectations of $3.23 per share. Despite that, revenues came in weaker-than expected at $75.9bn, up from $74.6bn a year ago, but marginally lower than expectations of $76.54bn. This can be mainly attributed to the stronger dollar, while iPhone sales for the period also missed expectations.
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Lewis weathering extremely challenging trading conditions

On Monday, Lewis shed 2.67% as it moved to trade at R43.78, following the release of a trading update for the 3rd quarter and 9 months ended December 2015. In it, the group advised shareholders that the group’s trading conditions remained extremely challenging. In addition, trading was also significantly impacted by the implementation of the National Credit Regulator’s affordability assessment. As a result, the group recorded a 5.4% increase in revenues for the 9 month period, while merchandise sales grew by 4.7%. On the upside, the debt collection performance remains stable, with debtor costs for the period increasing by 16.5% when compared to the previous corresponding period. Lewis now trades on a 5.51 historic price/earnings multiple with an 11.81% dividend yield.
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Mixed bag for GE while ZAR strenghtens in risk-on trade

General Electric ended marginally lower on Friday, down 1.22%, after posting mixed results that beat some analysts’ expectations, while failing others. For the 4th quarter, total profits jumped by 22% to $6.28bn, up from $5.15bn previously. Meanwhile, adjusted earnings came in at $0.52 per share, slightly higher than expectations of $0.49 per share. Revenue for the quarter stood at $33.9bn, down from $42bn a year ago and slightly lower than expectations of $35.92bn. This was led by a 16% drop in oil and gas revenue, which contributed to an 8% decline in industrial profits. The decline in revenues was however partially offset by a 20% increase in energy management revenue.
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MTN: Another day, another crisis

On Thursday, MTN once again featured in the news for all the wrong reasons, with the stock ending 4.32% lower at R112.62. During the session, news broke that MTN was among the mobile-phone operators named for allegedly evading taxes in a report by Cameroon’s National Anti-Corruption Commission. In it, the regulator announced that the ministries of finance and post and telecommunication allegedly colluded by providing illegal tax rebates. In response, MTN’s Cameroon unit has denied being part of any corruption-related actions and has stressed its interactions with the Government of Cameroon and its representatives have always been transparent and legal.
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Anglo American: Another Disposal

Most basic resource stocks ended the day sharply lower, following further declines in the oil price and global equity markets. Anglo American ended 7.5% down and was offered no respite, despite releasing a SENS detailing its decision to sell its Callide mine in Australia to Batchfire Resources for an undisclosed amount. Callide, an open pit thermal coal mine, produced 5.6mn tons in the first months of 2015 and is one of the four Australian coal mines that the group plans to sell. This follows on from a major restructuring plan that was announced at the end of last year.
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Netflix expansion pays off

On Tuesday, Netflix topped analysts’ expectations after its international expansion boosted subscriber growth. For the 4th-quarter, Netflix added a total of 5.59mn subscribers, up from 4.33mn additions a year ago. Of this amount, 4.04mn subscribers were from outside the US, beating expectations of 3.51mn and up from 2.43mn a year ago. Looking ahead, this trend is set to continue following the expansion into an additional 130 countries earlier this year, with South Africa being one of them. For the quarter, the group recorded revenue of $1.82bn, up from $1.49bn, but slightly lower than expectations of $1.83bn. However, earnings came in at $0.07 per share, above expectations of $0.02 per share. As the 4th-quarter US earnings season gains momentum, S&P 500 company earnings are expected to fall by 4.4%. However, when excluding energy companies, earnings are expected to grow by 1.5%.
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MTN boosted by removal of Iranian sanctions

On Monday, MTN climbed 2.3% to trade at R120.50, boosted by recent developments regarding its subsidiary in Iran. On Saturday, the US announced it, along with a number of world powers, had lifted a host of devastating sanctions against the country. As a result, MTN would now be able to free up more than $1bn in frozen accumulated dividends, which has accrued to them due to their 49% stake in the unlisted Irancell. Irancell currently features as the country’s second largest mobile phone operator when measured by number of subscribers. Despite the recent uptick in its share price, MTN has still fallen around 37% in the last 12 months.
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Mr Price gets crushed 17.82% on trading update

In a trading update for the third quarter, 27 September 2015 to 6 December 2015, MRP announced the group had recorded sales growth of 6.5% and comparable sales growth of 3.4% compared to the previous corresponding period. Mr. Price Sport featured as the top divisional performer after increasing its total sales by 12.4%, while comparable sales increased by 5%. However, Miladys saw total sales decline by 1.5%, while comparable sales fell by 2.1%. Overall, the group recorded weighted average space growth of 3.8%. Retail selling price inflation was 6.6% and unit sales were in line with the previous corresponding period. Cash sales, which constitute 83.2% of total sales, grew by 8.3%, while credit sales decline by 1.4%. This decline was mainly due to the group’s strict granting criteria, consumers’ low credit appetite and recent legislative changes impacting new account applications. Looking forward, the sales base in February and March of the Q4 trading period, and beyond, is less challenging. Although the January base is still high, an improvement in sales growth rate has been experienced to date. MRP ordinary shares finished the day down 17.82%, or R34.04, lower.
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