South Africa’s Mvelaphanda Resources reported a sharp drop in full-year headline earnings on Thursday, hit by an accounting change, but said it had repaid its debt and is selling off some of its investments.
Mvela, a black-owned investment company with stakes in South African miners such as Northam Platinum and Gold Fields, said last year it would delist and sell its more-than 50% stake in Northam to comply with local bourse regulations.
Mvela said headline EPS for the year to end-June fell to 10 cents from 1 663 cents the previous year, in line with the company’s own forecast of a headline EPS of 5 to 13 cents.
Headline earnings are the main profit gauge in South Africa and strip out certain one-time items.
Mvela said the two periods were not directly comparable as the results were compiled based on different accounting treatments of the Northam and Gold Fields investments.
The company had cash of R57-million at the end of June and will gain a further R59-million from dividends declared by Gold Fields and Northam.
Under JSE rules, Mvela has to delist because it currently derives most of its earnings and net asset value from another firm, Northam.
Mvela sold 44-million Northam shares to Kazakh group ENRC earlier this year and also sold around 7,7-million Gold Fields shares during the financial year.
The company said its unbundling would be concluded as soon as there is a resolution to an ongoing arbitration case. — Reuters