ArcelorMittal has confirmed that 2021 was its finest annual earnings earlier than curiosity, tax, depreciation and amortisation (ebitda) efficiency since 2008. This was pushed by a shocking 47% enhance in realised rand costs and a 34% enhance in crude metal manufacturing. This mix was sufficient to enhance the ebitda margin from 0.2% in 2020 to 21.6% in 2021.

Headline earnings per share (HEPS) of R6.15 appear absurd versus a share value of R9.25 – a trailing P/E a number of of 1.5x! The share value fell 7.3% in response to this outcome, in an ideal reminder that trailing P/E multiples are harmful for cyclical firms which have simply had a bumper 12 months. It’s all concerning the forward-looking expectations, and ArcelorMittal is in for a harder 12 months.

Jubilee Metals: A very good instance of cyclical earnings

Jubilee Metals was a Twitter favorite in 2021, rewarding shareholders who had picked this tailings enterprise over a sector peer like DRDGOLD. Jubilee is now nicely off its 52-week excessive, as steel costs have cooled off.

The Inyoni platinum group metals (PGMs) processing facility was recommissioned in November 2021. That is an built-in chrome- and PGM-processing facility, which will increase manufacturing capability significantly. Regardless of all this mission work, Jubilee nonetheless managed to satisfy contractual obligations for manufacturing.

To offer an concept of how cyclical this enterprise is, attributable earnings for the six months to December 2021 got here in at R389-million versus R815-million within the previous six months and R627-million within the corresponding six months in 2020.

Hudaco shines a lightweight

Industrials group Hudaco has put out a powerful outcome for the 12 months to November 2021. Working revenue was 61.9% increased than in 2020 and 17.9% increased than in 2019, so there’s through-the-cycle development right here. Importantly, the corporate has demonstrated some resilience to inflation, noting that it handed will increase on to customers.

With a powerful stability sheet and a enterprise mannequin that appears to be having fun with this atmosphere, Hudaco is following an inorganic development technique alongside its natural development. The corporate has acquired Cadac as a going concern, so Hudaco has invited itself over to your subsequent braai. Particulars on the deal have been mild, with the acquisition value famous as being a most of R100-million.

A blended week for Sasol

By shut of commerce on Thursday, 10 February, Sasol was down greater than 5% for the week. The group launched a buying and selling assertion that mirrored increased gross margins and development in adjusted ebitda of between 66% and 76% for the six months to December 2021.

This seems like a powerful outcome at first blush, after all, nevertheless it all comes right down to what the market was anticipating to see versus what the corporate delivered. In December, Sasol had alerted the market to issues of safety and moist climate that resulted within the lack of a couple of million tonnes of coal manufacturing.

This decreased yield charges within the gasification course of at Secunda, which is maybe excellent news for the atmosphere however not nice for Sasol shareholders.

HEPS fell from R19.16 within the comparable interval to between R14.25 and R16.17. There’s nonetheless lots to smile about for shareholders, with Sasol up 24.5% already in 2022.

Gold Fields will get the gold medal

Gold Fields has massively outperformed sector friends Concord Gold and AngloGold Ashanti in current occasions. Although Anglo has faltered in its operations, Gold Fields has put in a stable efficiency with the elements that it might probably management, corresponding to its prices and manufacturing volumes.

Full-year gold manufacturing in 2021 was 5% increased than in 2020, which is in keeping with the higher finish of the corporate’s steering. All-in sustaining prices got here in barely above steering, with elevated mission capex at Salares Norte as one of many drivers of this. The large query is whether or not gold will shine throughout excessive inflation.

A spectre of labour unrest

As a rustic, we can’t afford to undergo one other interval of labour unrest in our mining sector (or any sector, actually). It didn’t get a lot consideration up to now week, however Wesizwe Platinum introduced that it has suffered protests and calls for made by the neighborhood across the Bakubung Platinum Mine.

This has come at a essential stage of the mission building and the corporate seems to have acquired little or no help from authorities in response to allegations of intimidation of staff and harm to property. The share value fell by greater than 13%, earlier than recovering to be about 10% down by shut of commerce on Thursday. DM168

After years in funding banking by The Finance Ghost, his mom’s dire predictions got here true: he turned a ghost.