Reviewing some local earnings results, we look at Africa’s largest supermarket retailer, Shoprite Holdings Limited (JSE: SHP) and touch base with MTN’s (JSE: MTN) latest earnings results. We also highlight the most prominent findings from February’s Non-Farm Payroll (NFP) data report and review how the market reacted.
Shoprite Holdings Limited (JSE: SHP)
Despite the giant retailer reporting double-digit sales growth, CEO Pieter Engelbrecht raised concerns over the country’s deepening energy crisis. Constant power outages resulted in a “total spend of R560 million on diesel” for the six-month period that ended 1 January 2023, “leaving the group’s trading margin at 5.7%, down from 6.1% reported last period.” Should the nation’s power crisis persist, Shoprite could be staring down a potential R1 billion annual diesel bill come the end of the next six-month period.
MTN Group Limited (JSE: MTN)
South African multinational mobile telecommunications company, MTN Group Limited, reported a 40.4% increase in basic earnings per share (EPS) to 1 071 cents, from 763 cents in 2021. Moreover, the group hiked its final dividend by 30 cents per share to 330 cents per share, representing a 10% year-on-year increase. Group revenue surged 15% in constant-currency terms to R196.5 billion for the 2022 fiscal year as MTN enjoyed heightened demand for data across Africa. Despite some stellar financial results, “MTN Group is reeling from the adverse effects of load-shedding.” The telecommunications giant incurred an R695 million reduction in earnings before interest, tax, depreciation, and amortisation (EBITDA). Despite robust operational ability, MTN has lamented the challenges associated with the country’s energy crisis. Closing at ZAR141.33 on Friday, 10 March, MTN opened at ZAR141.00 flat on Monday, 13 March, and as of 12:30 p.m., the group has seen its share price fall more than 8% since the market opened.
February’s Non-Farm Payroll (NFP) Data Report
Last week Friday’s Non-Farm Payrolls (NFP) report came in with a slight upside surprise, with a higher-than-expected 311,000 jobs added to the U.S. economy in February 2023, exceeding expectations of 205,000. The unemployment rate increased to 3.6% in February, slightly higher than the 3.4% reported in January, while the annual wage inflation, measured by the Average Hourly Earnings, increased marginally to 4.6% from 4.4%.
Despite higher-than-expected jobs data, the U.S. Dollar weakened marginally, closing 0.62% lower on Friday. Moreover, the S&P 500 Index closed 1.45% lower on Friday, while the NASDAQ Composite Index and the Russell 2000 Index closed 1.76% and 2.95% lower, respectively.
Sources: fx street, ITWeb, MTN Group Limited, Shoprite Holdings Limited, Trading View
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