SAA June take-off confusion; Covid-19 hammers Absa, Netcare; PetroSA circles Sasol; diesel rations; Distell

Written on 05/26/2020
Jackie Cameron

By Jackie Cameron

  • SAA is set to take off again. It aims to resume domestic flights between Johannesburg and Cape Town from mid-June, it said on Tuesday. SAA, which is under a form of bankruptcy protection after guzzling taxpayers funds for a decade, suspended all commercial passenger flights in late March, when the government imposed one of the strictest lockdowns on the African continent. But President Cyril Ramaphosa said in an address to the nation on Sunday that domestic air travel for business purposes would be phased in after June 1, when the country moves to level 3 of a five-level alert system. “SAA is committed to restart further operations on an incremental basis, and will regularly provide updates on progress,” the statement said, reports Reuters.*
  • Absa bank has been hit hard by the Covid-19 shock to the economy, warning that bad debts have doubled. It expects its first-half profits to fall by more than 20%, says Reuters. JSE-listed hospital group Netcare has lost about R800m in revenue as Covid-19 containment measures have halted elective surgery, according to reports.
  • South Africa’s alcoholic-beverage makers are pushing the government to allow smaller bars to convert into drink-collection points when a nationwide ban on sales is lifted next week. Allowing taverns in poorer communities to sell alcohol for home drinking will prevent local residents traveling long distances and help reduce illicit sales, Richard Rushton, chief executive officer of wine and spirits maker Distell, said in an interview on Monday, reports Bloomberg.
  • South Africa has implemented diesel rationing, with demand for the fuel recovering faster than expected. “The opening of the economy has resulted in a more rapid recovery than expected,” the South African Petroleum Industry Association said in a statement Tuesday, according to Bloomberg. Stock rationing has been implemented to manage demand and to preserve supplies, and is expected to continue to the end of May.
  • South Africa’s state-owned Central Energy Fund is considering buying assets that have been put on the block by fuel and chemical maker Sasol as it seeks to restore itself to profitability, reports Bloomberg. The CEF “needs to put an end to the losses” at its units, including oil company PetroSA, Chairman Monde Mnyande told lawmakers on May 12. “We are looking at those and discussing very strongly with Sasol” what assets that we can acquire, he said. Sasol needs to cut debt and is trying to avoid raising capital through a $2bn rights offer. Sasol was among the best performers at the end of trading on the JSE on Tuesday, gaining just under 8%.

* SAA BRPs contradicted this statement earlier today, saying a decision has not yet been made, and more clarity on level 3 lockdown and the changes for domestic travel need to be assessed.