Among others, the following local companies are set to report results this coming week:
- Sasol (Interim Results): In a recent trading statement, management guided for headline earnings per share (HEPS) to increase by between 12% and 17% y/y, tracking behind full year market expectations (+31%). Despite impairment charges, the group is expected to deliver a solid strong set of results, underpinned by a reasonable operational performance across most of the value chain, higher crude oil and product prices, and increased demand for specialty chemicals products.
- Bidvest (Interim Results): In a November trading update, management highlighted that while trading conditions remained challenging, they were pleased with the quality of earnings. The group benefited from greater commodity and agricultural volumes in various businesses (particularly Freight), as well as the annuity type nature of many of its operations. However, businesses exposed to the infrastructure and construction sectors witnessed further contraction in demand.
- Mondi (Full Year Results): In the company’s third quarter trading update, management said that they were confident with the progress made during the year and expected a strong 4Q17. However, continuing cost pressures and negative currency impacts could result in an underlying performance for the year modestly below market expectations.
- Anheuser-Busch Inbev (Full Year Results): While recognising the increased volatility in some key markets, management expect accelerated revenue growth in FY17. The company expects cost of sales per hl to increase in the low single digits on a constant geographic basis, despite unfavourable foreign exchange transactional impacts, and growth in premium brands. Growth for FY17 was expected to be driven by the solid growth of the company’s global brands and strong commercial plans, including revenue management initiatives.
- RCL Foods (Interim Results): Management guided for HEPS to rise by between 46% and 66%, tracking behind full year market expectations. The bottom-line performance was heavily weighed on by one-off items.
- {{41363|Shoprite}} (Interim Results): In a January operational update, the group reported turnover growth of 6.3%, with RSA Supermarkets and the Furniture divisions offsetting weakness in the non-RSA Supermarkets. While top-line growth has slowed, low internal inflation could point to an improvement in real organic growth and reasonable margin gains locally.
- AECI (Full Year Results): HEPS are expected to increase by between 15% and 19% y/y, significantly ahead of expectations (+1.2%). This points towards a strong recovery during the second half (1H17 Adjusted HEPS +2%) and depending on the detail, could result in earnings upgrades for FY18. The improvement in performance was most likely supported by better prospects in global mining and the group’s solid pipeline in the mining chemicals business.
- Santam (Full Year Results): In a recent trading statement, management said that HEPS would increase by between 29% and 34% y/y, well ahead of market expectations. Management also noted that the underwriting result held up well, following two significant catastrophe events, as well as an increase in large property claims during 1H17. The net underwriting margin is expected to be close to the midpoint of the long-term target range of 4% to 8% of net earned premiums.
- Liberty (Full Year Results): The company guided for basic HEPS to rise by between 40% and 55% y/y, with the midpoint of this range slightly ahead of full year market expectations. Normalised HEPS are expected to increase by between 1% and 15% y/y. This represents a strong performance in the second half of the year from 1H17 (Normalised HEPS -30% y/y), with the result (particularly investment returns) likely also benefiting from solid equity market returns over the period.
- Nedbank, Barclays Africa, Hyprop Investments, Attacq, Growthpoint, African Rainbow Capital, Cashbuild, Wilson Bayly Holmes, Aveng, Group Five, Murray & Roberts, Impala Platinum, Advanced Health, Ascendis Health, Clover and Sun International will also release results next week.
- From a local corporate actions perspective, Tuesday marks the last day to trade in Exxaro and Resillient REIT to receive their latest distributions. These counters will trade ex-dividend on Wednesday. Choppies Enterprises will host an EGM on Monday for passing of an ordinary resolution appointing PricewaterhouseCoopers as the company’s new auditors. Rhodes Food Group will host an AGM on Thursday.
Scheduled earnings in the US are limited this week but there could still be some interest generated by some large-cap counters including Autozone, Best Buy Co Inc. and Macy’s Inc. Bloomberg estimates are guiding for positive earnings growth for all the above-mentioned counters. According to Bloomberg intelligence, analysts expect Macy’s 4Q17 same store sales to register the first increase since 4Q15, driven by a 1% gain over November-December selling period. Margins in 4Q17 likely remained under pressure amid rising shipment costs to fulfil digital orders and promotions to spur traffic and sales.
Europe remains busy this week with over 100 companies set to release results across the region. Focus will be on healthcare and agricultural products manufacturer Bayer, and property counter Hammerson as well as banking counters including Bank of Ireland and Standard Chartered PLC. According to Bloomberg intelligence, Hammerson is expected to beat consensus adjusted EPS estimates of 31 pence given robust leasing activity on the back of improved consumer confidence in France and positive momentum in Dublin. Tenant sales in France in 3Q17 beat REIT peers and footfall across the portfolio beat national indices.
In the Asia Pacific Region, focus will likely be on Caltex Australia which will release full year results on Monday. The company has provided FY17 profit guidance below analysts’ expectations due to Supply & Marketing despite strength in Refining. Retail margins would have been lower in 2H17 compared to the first six months on the back of increased retail competition and a rising commodity price environment.
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