News in South Africa 12th March:
1. Eskom will not be privatised:
Government has no intention to privatise power utility Eskom, said Public Enterprises Minister Pravin Gordhan.
The minister was addressing a debate on the privatisation of Eskom during a mini-plenary session of the National Assembly on Thursday.
“There is much work to be done to reposition and revitalise Eskom after the tragic damage that has been done by state capture,” he said. “Let me make it clear, right at the outset – Eskom is not being privatised,” he told members of Parliament.
Gordhan said that there are “no secrets” in government’s agenda when it comes to Eskom. However, private sector participation in the energy space is part of government’s agenda, he explained. He used an example of rooftop solar systems being installed by households as a form of private sector participation. In particular, poorer households can have solar panel rooftops installed with the aim of electrifying their homes, and then selling excess power to Eskom so that they can earn incomes too.
The minister said that ensuring energy security is vital for the well-being of the country – and that it must happen within the context of climate change commitments such as reducing carbon emissions. For this reason, there must be “an appropriate balance” between renewables and fossil fuel-based power. Additionally there must be a just transition for workers and communities affected by changes in energy production.
2. Manufacturing and mining production down:
Two sets of downbeat data released yesterday – manufacturing production was down in January from the previous year, while mining production fell as well.
Manufacturing Production:
Manufacturing production decreased by 3.4% year-on-year in January 2021, data from Stats SA show.
Stats SA on Thursday released manufacturing production data for January. On a month-on-month basis, manufacturing production increased 0.5%. The consensus expectation was for a 1% year-on-year decline and a 0.7% month-on-month decline.
According to Stats SA, six out of ten manufacturing divisions reported a slowdown in activity.
Among the biggest contributors to the year-on-year decline was the petroleum, chemical products, rubber and plastic products category (down 13.9%), food and beverage production was the second biggest negative contributor having declined by 4.9%.
Notably the production of beverages declined by 26.2% year-on-year. Stats SA did not indicate if this was linked to the ban on alcohol sales during the month.
Mining Production:
Mining production reported its 11th consecutive month of year-on-year declines, with January production down 6.2% from the previous year.
Stats SA on Thursday released mining production and sales data for January. On a month-on-month basis, production picked up by 4.5% compared to December 2020. The consensus expectation was that of a 1.9% decline in year-on-year production and growth of 0.4% on a month-on-month basis.
Among the major contributors to declining year-on-year production were platinum group metals (down 14.5%), followed by coal (down 13.5%). Gold production was down 14.1%.
On the flip side, manganese ore was a significant positive contributor with production up 34.7% year-on-year. Notably, diamond production increased 44.2% on a year-on-year basis and 9.8% on a month-on-month basis.
3. SAA needs pilot trainers:
South African Airways (SAA) is in urgent need of pilots.
More specifically, it needs specialised pilot instructors to train its slimmed-down pilot contingent to enable those pilots to requalify for line operations in terms of the relevant technical and safety standards.
SAA’s own specialised pilot instructors are among the pilots who have been locked out of the airline since December.
The airline’s emergency training procurement request appears to have been issued on Monday (March 8).
The document calls for replies “by latest tomorrow (Tuesday 09 March 2021)”. However, it also requests recipients to confirm their availability for “the weekend of 06 March 2021”.
As part of its business rescue plans, the airline had significantly cut is pilot roster, which has led to disputes with the SAA Pilots Association (Saapa).
Saapa pilots have been locked out of the airline over the dispute, and have received no salaries since December. Attempts to replace these pilots has been met with resistance from Saapa’s legal team, who says it goes against the Labour Relations Act.
4. Fees must fall protests on the rise:
Student protests in South Africa have escalated and spread to other provinces in the country. Students have been protesting fee and administration issues this week, with the action starting at Wits University.
However, things escalated on Thursday when police shot and killed a bystander at the protests.
Students were joined by ANC leaders in protesting against the ANC-run government’s failure to uphold the ANC’s promise of free education. The demonstrations have continued on Friday, with a more muted police presence.
President Cyril Ramaphosa says the action taken by the police during student protests in Braamfontein is unwarranted.
5. Standard Bank declares dividend:
Standard Bank declared a final dividend of 240 cents per share, despite a 40% fall in its headline profit.
“The groups ongoing resilience is underpinned by our diverse client base and varied revenue streams. Our strong capital position enabled us to provide substantial support to our clients, employees and our communities.” – Sim Tshabalala, Group Chief Executive
Standard Bank Groups (SBG or the group) results for the twelve months ended 31 December 2020 (FY20) reflect the very difficult operating environment. Covid-19 placed considerable strain on our retail, business and corporate clients, particularly in South Africa. The group’s strong capital position enabled us to respond quickly and significantly.
- Group headline earnings were R15.9 billion, a decline of 43% on the prior year (FY19) and return on equity (ROE) was 8.9%.
- Banking operations headline earnings were R15.7 billion, down 42% on FY19, and ROE was 9.6%. In the first six months of the year (1H20), the groups results were negatively impacted by lower activity levels and higher credit charges. In the second six months of the year (2H20), activity recovered, however credit charges
remained elevated and the negative impact of the interest rate cuts in 1H20 became more pronounced. - Overall banking revenues declined marginally (down 2%). Costs were well contained (up 1%). This led to negative jaws of 306 basis points (bps) and a cost-to-income ratio of 58.2%. Credit impairment charges increased to R20.6 billion, 2.6 times those reported in FY19.
- Despite a significant increase in risk weighted assets, the groups common equity tier 1 capital adequacy (CET1) ratio remained robust at 13.3% as at 31 December 2020. A final dividend of 240 cents per share has been declared, representing a payout ratio of 24% on FY20 headline earnings.
The groups diverse client base, geographic footprint and business mix cushioned a weak performance in South Africa.
- The Standard Bank of South Africa Limiteds headline earnings declined 72%.
- Africa Regions grew headline earnings 9% and 4% in constant currency (CCY).
- Africa Regions contribution to FY20 banking headline earnings increased to 58%. Angola, Ghana, Kenya, Mozambique, Nigeria and Uganda remained the top six contributors to Africa Regions headline earnings.
All information sourced from articles posted by: BusinessTech, Business Insider, News24, Fin24, Moneyweb, and ENCA.
