The rand’s gains in recent months have reflected poorly on Christo Wiese’s industrial holding company, Invicta, which delivered a weaker set of interim results on Monday.
Invicta reported headline earnings per share (HEPS) and sustainable HEPS down 14%, largely as a result of the strong rand.
The strengthening of the rand against major currencies, particularly the dollar, was the main factor affecting the financial results, Invicta said, and resulted in a forex loss of R18m, compared with a R33m gain in the previous comparable period.
The company reported profit down 23% at R273m for the period, while shareholder equity fell by 10% year on year to just more than R5bn.
Offshore
Addressing its forex losses for the period, Invicta blamed its strategy to focus on offshore expansion, which it said would ultimately prove beneficial.
“With our strategy focused on expanding offshore, our business has become more reliant on the major currencies, and the forex adjustment reflects that relationship. We believe our strategy is sound and will prove to be beneficial in the long term.”
Despite profit being down, Invicta’s net asset value per share increased by 4% from the previous comparable period, and the group reported cash in hand of R734m.
“Our trading results for the current period are consistent with those of the previous period, demonstrating our core operations’ strong and reliable nature,” the company said.
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