Among others, the following local companies are set to report results this coming week:
- Sasol (Full Year Results): Management recently guided HEPS to decrease by between 11% and 21% y/y. The mid-point of this range is in-line with market expectations (consensus: -16.8%). HEPS were negatively impacted by a stronger rand, a low oil price, tax litigation claims, and the impact of labour actions (R1.06 billion) at Sasol Mining in 1H17, and an increase in rehabilitation provisions. Excluding the last three factors, HEPS would have declined by between 3% and 13%.
- BHP Billiton (Full Year Results): The company reported solid quarterly results in its 4Q17 production update. Production in copper, iron ore and petroleum was in line, and the cyclone Debbie impacts on Met Coal volumes were lower than expected. Consensus expects a strong recovery from the prior year’s results.
- AngloGold Ashanti (Interim Results): The company expects to deliver a headline loss per share of between 19 cents and 23 cents compared to headline earnings of 23 cents per share in 1H16. The decline in earnings was due to a number of factors including, a provision for potential retrenchment costs of US$47 and the estimated costs of the settlement of silicosis class action claims and related expenditure of US$46 million.
- Imperial (Full Year Results): In a recent trading statement, management guided for HEPS to fall by between 11% and 14% y/y, marginally better than expected previously (Bloomberg: -15%). Earnings growth was weighed on by foreign exchange losses and higher finance costs. In addition, prior period HEPS was enhanced by a foreign exchange gain from internal restructuring.
- Grindrod (Interim Results): The company expects the headline loss per share to improve by between 64% and 69% y/y. EBIT is anticipated to be positive and was supported by stronger mineral commodity exports. The Ports and Terminals division delivered decent profits and the Shipping division recovered to above break-even, which could signal a turning point for the company.
- Shoprite (Full Year Results): In the company’s recent operational update, sales were up 10.4%, which was slightly behind consensus and points towards a deterioration in sales momentum in 2H17. RSA Supermarkets experienced challenging conditions over twelve months, while non-RSA Supermarkets were impacted by lower commodity prices and the devaluation of certain currencies. Consensus is looking for 11% growth in HEPS for the year.
- Woolworths (Full Year Results): In its July operational update, management said that HEPS would decline by between 5% and 10% y/y, with the mid-point of this range falling behind expectations (consensus: -4.9%). Top-line performance (+3%) came in better than expected as Politix lifted the overall number Australia. Real organic growth deepened into negative territory and it seems as if high income consumers in South Africa are now also facing a crisis of confidence, which was not the case in previous downturns.
- AdvTech (Interim Results): HEPS are expected to increase by between 4% and 7% y/y. Excluding litigation costs and other corporate action costs, normalised earnings per share is anticipated to grow by between 20% and 25%. While normalised growth has slowed down compared to the prior period, these numbers have surprised to the upside and point to a robust operating performance.
- Basil Read, Adcock Ingram, Aveng, Murray & Roberts, Northam Platinum, African Energy Partners, Pembury Lifestyle Group, Sea Harvest and Massmart will also report results next week.
- Tuesday marks the last day to trade in MTN and Mondi to receive their most recently declared dividends. These counters will trade ex-dividend on Wednesday. Investec Property Fund, Sovereign Food Investments, Adcorp, Stor-Age Property REIT, Telkom and Naspers will host AGMs next week.
Earnings releases in the US trickle down even more this week with just a few retail counters scheduled to release results towards the end of the week. Luxury jewellery and specialty retailer Tiffany & Co will set the tone followed by multinational office supply retailer Staples, the world’s largest retailer of diamond jewellery Signet Jewelers and discount variety stores Dollar Tree. Whilst Signet Jewelers are expected to report a fall in earnings of 9% y/y for the quarter, Bloomberg is guiding for positive earnings growth from Tiffany & Co (+3% y/y), Staples (+3.1% y/y) and Dollar Tree (+21.3% y/y). It has been tough for US retailers so far this year. Data from S&P Global Market Intelligence shows that 24 US retailers have gone bankrupt in 2017 compared to 11 by this time last year (2016 total: 18). According to Factset, 91% of the companies in the S&P 500 have reported earnings thus far with 73% reporting earnings above the mean estimate and 69% having reported sales above the overall expected average. So far, for 2Q17, the blended earnings growth rate for the S&P 500 is 10.2% – this is ahead of what was expected at 30 June.
In Europe, the focus will likely be on quarterly results Marine Harvest – a Norwegian seafood company with operations in a number of countries around the world. Group CEO Alf-Helge Aarskog stated that performance during the first quarter was driven by all-time high salmon prices which boosted operational results, particularly in Marine Harvest Scotland and Marine Harvest Canada. Bloomberg consensus is guiding for overall earnings growth of 30% y/y for FY17.
In the Asia Pacific region, a number of large-cap Chinese companies are set to release results this week including the largest fixed-line service and third largest mobile telecommunication provider in China, China Telecom. The group recently reported that mobile subscribers increased by 2.8 million to 229.9 million during June, slightly below the net addition of 3 million during May 2017 but ahead of the 12-month average (1.8 million) – 4G subscribers grew by 4.8 million, better than the net gain in May (4.7 million) but below the 12-month average (5.2 million). Bloomberg consensus is suggesting full year earnings growth of around 12.8% y/y and revenue growth of 5.1% y/y.
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