17 January 2025 | FNB Week Ahead

South32 (2Q25 Update)

In 1Q25, copper production increased due to higher planned grades, while alumina, zinc, and manganese declined. At the time of the 1Q25 update, the group remained on track to meet full-year guidance. During 2Q25, civil unrest in Mozambique impacted South32’s Mozal Aluminium operations—the effect of which will be quantified in this update.

BHP Group (2Q25 Update)

In 1Q25, copper equivalent production increased 4% y/y to 476.3 kt. Iron ore production rose 2% y/y to 64.6 Mt, steelmaking coal production was down 19% y/y to 9 Mt, energy coal production advanced 2% y/y to 3.7 Mt, and nickel production was down 3% y/y to 19 kt.
For FY25, management previously guided for:

• Copper production: 1,845–2,045 kt
• Iron ore: 255–265.5 Mt
• Metallurgical coal: 16.5–19 Mt
• Energy coal: 13–15 Mt

Sasol (2Q25 Update)

The company had a measured start to FY25 with the following highlights:

• Positive contribution of the Production Sharing Agreement (PSA) license on South African gas flow.
• Successful ramp-up at ORYX.
• General improvement in chemical sales revenue due to higher prices, despite an oversupplied market.

After 1Q25, full-year guidance was mostly maintained:

• Mining saleable production: 30–32 million tonnes (Mt).
• Gas production volumes from Mozambique: 0–5% higher.
• Secunda Operations (SO): 7–7.2 tonnes, driven by improved coal supply and operational performance.
• Natref production: Increase of 0–10%.
• ORYX GTL production: 40–60% higher.
• Liquid fuel sales: Projected increase of 0–4%.
• Chemicals Africa sales volumes: Projected increase of 0–4%.
• Chemicals America and Eurasia sales: Expected to remain in line with FY24.

Quilter (4Q24 Trading Update)

At the 3Q24 mark, the wealth manager reported a strong performance during a typically slower summer quarter, with growth in AUM bolstered by higher net inflows, improved productivity, and persistency levels as well as positive markets. Management remained confident about the group’s prospects.

Retailer Festive Season Updates

Several retailers, including Clicks, Mr Price, Truworths, Lewis, and The Foschini Group, are expected to release festive season updates.

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Corporate Action Highlights

On Wednesday, 22 January 2025, the following companies will trade ex-dividend:

• Clicks
• Cafca
• RFG Holdings
• Primeserv
• Lewis
• Reunert
• Netcare
• Argent Industrial

Additionally, companies such as MC Mining, Labat Africa, Sasfin, and Sygnia will host AGMs.

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US 4Q24 Earnings Season

The US earnings season gains further traction next week. So far, 35 S&P 500 companies have released results:

• 57% have reported better-than-expected sales numbers.
• 83% have reported better-than-expected earnings.
• Sales surprise factor: +1.52%.
• Earnings surprise factor: +10.12%.
• Aggregate sales growth: 7.14%.
• Aggregate earnings growth: 22.84%.

Notable Updates

• Netflix (4Q24): Expects revenue growth of 15% y/y, higher paid net additions compared to 3Q24, and an operating margin of 22% (a five-percentage point y/y improvement).
• Halliburton: Despite a weak year, full-year guidance for free cash flow and shareholder returns was unchanged. Earnings are expected to decline 19% off a 1.8% revenue drop due to slow North American oilfield activity, which may only improve in early 2025.
• Johnson & Johnson (3Q24): Adjusted EPS came in at $2.42, with sales growing 5.2% y/y to $22.5 billion. FY24 adjusted operational sales are expected to increase by 5.7–6.2%, with EPS between $9.86 and $9.96. The outlook remains slightly clouded by ongoing talc-based product lawsuits.

Other companies to watch include Charles Schwab, General Electric, Procter & Gamble, United Airlines, and American Express.

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