Brimstone Investments reported a drop in intrinsic net asset value (NAV) in its interim results after a corporate restructuring which deconsolidated its Sea Harvest subsidiary.
This takes Brimstone’s intrinsic NAV to almost R2.8bn — down 7% — bringing the number slightly closer to the company’s R1.26bn market valuation on the JSE. Revenue was down 39% from the previous comparable period.
Headline earnings per share (HEPS) soared 110% in the period, primarily due to fair value gains of R76.2m compared with fair value losses of R40.3m in the prior period.
The first half of this year saw Brimstone deconsolidating seafood producer Sea Harvest after it completed its acquisition of certain subsidiaries of Terrasan, diluting Brimstone’s stake in the subsidiary. The deconsolidation resulted in a net loss on deemed disposal of R562.1m being reflected in the company’s interim results.
Brimstone also disposed of its entire stake in Milpark, and part stakes in Phuthuma Nathi, MTN Zakhele Futhi and Equites, with the company saying “these disposals have contributed to further implementation of our debt-reduction strategy aimed at significantly reducing Brimstone’s gearing”.
The boost in HEPS was also the result of Brimstone increasing its profit share in its fishing and food processing associate, Oceana, to R187m from R94.9m.
Brimstone said economic pressures weighed heavily on SA consumers in the first half of this year, resulting in a difficult trading environment, which further dragged down growth.
“The economic environment, characterised by a volatile rand and high interest rates in SA, remained challenging during the period under review.
“While a persistently high unemployment rate continued to impact consumer spending, easing inflation contributed to the prospect of a possible interest rate cut in the short term. Electricity grid stability and reduced load-shedding over the period are early signs of a favourable long-term solution to our energy crisis.
“SA also had free, fair and peaceful elections during the period and the sentiment about the new government of national unity has had a positive impact on domestic investment markets,” the company said.
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