Under the National Environmental Management Act: Air Quality Act, Sasol is required to obtain atmospheric emissions licenses based on minimum emission standards. Although the company has spent more than R7 billion on emission reduction projects in the past five years, it still struggles to achieve full compliance.
Specifically, the main challenge is to reduce sulfur dioxide emissions from boilers in Seconda operations. Sasol applied for an alternative emission load basis for these boilers, but the application was denied by the National Air Quality Officer. Sasol plans to appeal the decision to the Minister of Forestry, Fisheries and the Environment. Although Sasol has a roadmap to address this problem, it is clear that it cannot be solved overnight.
“Farewell, Bill,” says Leon Goosen.
Bell Equipment CEO Leon Goosen has resigned. He’s been in the hot seat during a period of very challenging global conditions, and yet the performance at Bell has been exceptional. The share price is up about 200% since the lows of the pandemic and is up more than 31% in the past 12 months.
It will exist until the end of December 2023 for the handover period, although a successor has not yet been named.
Main EPS for the interim period is expected to be at least 30% higher, implying a bottom line of 273 cents for the interim period. This is an attractive multiple valuation when calculated annually, as the share price is only R15.25.
Improved market conditions this year contributed to this positive development. However, Bell’s cyclical nature is why the market places a stubbornly low multiple on the business.
Invicta keeps trucking afloat
Invicta has announced further investment in Singapore with the acquisition of a 50% stake in KMP Far East, a company focused on heavy duty diesel engine parts for industrial and agricultural machinery in Southeast Asia.
The move follows Invicta’s early acquisition of KMP in the UK and US.
Invicta also acquired 100% of the shares of Imexpart Limited (Imex), the independent distributor of truck parts, in the UK.
This acquisition provides geographic diversification in line with Invicta’s strategy and provides opportunities to leverage the company’s strong purchasing capabilities to improve gross margins at Imex.
Invicta shares are up 7.8% in the past year, and swing traders no doubt benefited from a channel between R26 and R29 that the share price has been stuck in.
Thrisa: The taste of heavy metal
Tarisa provided a quarterly production update, including news of the net cash balance, which is a significant percentage of the market value.
The company’s share price has suffered due to weakness in the metal platinum group (PGM) prices, reaching a 52-week low of R16.70 in July. It has jumped about 15% in the past week, due to an improvement in PGM prices along with a weaker dollar.
Although Tarisa cannot control stock prices or commodity prices, she can manage her own production and capital allocation. In the third quarter, PGM production increased 7.9% sequentially (Q3 vs. Q2), driven by improved recovery and flat return. However, vineyard production declined by 6.4% although grades, yields and recoveries were stable.
The primary problem is pricing, with PGM prices down 16.6% in the third quarter. On the other hand, the prices of metallic chromium witnessed an increase of 7.8% over the same period.
Most importantly, Theresa’s cash position has improved, with cash on hand increasing from $205.8 million in March 2023 to $242.6 million in June. The net cash position increased from $101.1 million to $141.5 million during the same period.
The Karo project remains on track, and Tarisa expects to contribute $135 million over its duration. The amount of US$130 million, which has been completed, remains undrawn as of the reporting period.
Although the impact of PGM pricing on Tarisa’s share price cannot be ignored, the company offers decent exposure to PGM compared to other alternatives in the market thanks to strength of operations and exposure to chromium to help smooth out some of the volatility. Those who bought in the last drop were rewarded. DM
After years of investment banking by The Finance Ghost, his mother’s dire prediction came true: he became a ghost.
This story first appeared in our weekly Daily Maverick 168, available nationwide for R29.