Trading Day – Truworths posts record earnings and Sri Lanka faces food crisis

Truworths reported record earnings for the 53 weeks ended 3 July 2022, as it posted its highest headline earnings and earnings per share since 2016.

Sri Lanka faces a potential food crisis as its rice yields fall for a second consecutive year, with expected output to be down 49% from previous years due to the lack of fertilisers.

Here is the biggest news of the day.

• Truworths reports its highest HEPS and EPS figures to date. Truworths reported a HEPS and EPS result of 760c – 785c and 775c – 800c, respectively, for the 53 weeks ended 3 July 2022. The group’s previous highest HEPS and EPS figures were recorded in 2016 at 667.6c and 667.1c, respectively. The company has made no material acquisitions since 2016, meaning organic growth is responsible for the achieved results.
• Exxaro releases impressive half-year results. Exxaro expects its HEPS to increase between 18% and 32% for the six months ended 30 June 2022. The HEPS is, however, calculated from a lower weighted average number of ordinary shares (WANOS). Its EBITDA is expected to increase between 137% and 151%. These results were driven by an increase in the price and sales volume of coal.
• Oil prices rise as the U.S. oil and gasoline reserves drop lower than expected.
• Santam’s HEPS and EPS are expected to fall by more than 40%. Santam announced that it expects its HEPS and EPS to fall by 43% – 62% and 41% – 61%, respectively. The poor result was driven by lower underwriting results and lower investment income.
• Reserve Bank of New Zealand increases interest rates by 50 bps. New Zealand’s reserve bank had its seventh consecutive interest rate hike of 50 basis points to dampen inflation, marking its most aggressive rate hike since 1999.
• Sri Lanka may face a food crisis. Sri Lanka’s rice crops have had disappointing yields due to a lack of fertilisers for a second consecutive season. The expected yield is 2.3 tonnes per hectare, which hit 4.5 tonnes in previous years.
• Japan’s economy expanded by 2.2%, lower than the expected 2.5%. Japan had its third consecutive quarter of economic expansion from April to June 2022, but it missed the median forecast.