JSE Close: Resources Rise as Sappi Alerts and Datatec Surges

The JSE closed marginally lower on Thursday, with the All Share slipping 0.01% as a 1.53% surge in Precious Metals & Mining and a 0.96% gain in Resources provided a floor against broader industrial weakness. The Industrial 25 fell 1.1% and Construction & Materials added 0.74%, leaving the market in a divided mood. Datatec led the gainers with a 6.14% jump after a bullish trading statement, while Life Healthcare slumped 10.98% after flagging a R130 million revenue hit from a major funder under curatorship. Sappi also hit the alert radar with a US$413 million quarterly net loss and suspended its debt covenants.

SAP Sappi posts US$413m loss, suspends covenants

Sappi reported a catastrophic second quarter, delivering a net loss of US$413 million as Adjusted EBITDA collapsed 51% year-on-year. The pulp and paper group saw net debt surge 18% to US$1.964 billion, pushing its leverage ratio to 6.1 times Adjusted EBITDA and forcing management to proactively suspend covenant testing until March 2027. This buys operational breathing room but signals the balance sheet is under extreme structural pressure. The group recognised US$276 million in impairments on European graphic paper and North American high-yield pulp assets, reflecting continued deterioration in those segments. Management has cut FY2026 capital expenditure to a bare-bones US$250 million and maintained liquidity of US$824 million in cash and undrawn facilities. Near-term guidance for Q3 remains bleak, with Adjusted EBITDA expected to fall below Q2 levels and a US$23 million maintenance hit at Ngodwana adding to the headwinds.

DTC Datatec forecasts FY26 Headline EPS to jump up to 58.8%

Datatec released a trading statement projecting FY26 Headline Earnings Per Share to grow between 51.0% and 58.8%, with underlying EPS rising 31.7% to 37.3%, driven by strong and exceptional performances from its Westcon International and Logicalis International divisions. The technology distribution and systems integration group is benefiting from robust demand across its core geographies, confirming the operational momentum seen in recent periods. At a forward multiple of 9.5 times earnings, the stock appears undemanding relative to the growth trajectory. The shares closed 6.14% higher at R78.01, making Datatec the top performer on the board. It is worth noting that the trading statement relies on unaudited figures and that management has changed the definition of underlying earnings to exclude share-based payments, introducing a minor comparability caveat.

LHC Life Healthcare flags R130m revenue hit from funder curatorship

Life Healthcare released a trading update for the six months ended March 2026, projecting normalised EPS growth of 6% to 10% on the back of improved margins and operational efficiencies. However, the headline was dominated by a R130 million direct revenue reduction following a major medical scheme being placed under curatorship, a development that sent the shares down 10.98% to R11.27. The southern Africa EBITDA margin improved by approximately 0.5% and weighted average occupancy exceeded 70% in the second quarter, showing underlying operational resilience despite a 0.4% decline in paid patient days. The group also recorded R38 million in impairments on its non-acute businesses. Private hospital operators depend on stable funder relationships, and the curatorship introduces counterparty risk that could linger into the next reporting period even if efficiency gains persist.

SSU Southern Sun projects 18-22% HEPS growth on hotel occupancy strength

Southern Sun published a trading statement for the year ended March 2026 projecting Headline EPS growth of 18% to 22%, driven by overall occupancy rising to 62.9% with resilient MICE demand and foreign-inbound travel. The group maintained a net cash position of R86 million despite returning R694 million to shareholders via dividends and buybacks. Trading momentum accelerated in the second half, supported by major international events like the G20 in Gauteng, though offshore operations in Mozambique and Tanzania faced headwinds from geopolitical disruption. The shares closed 3.28% higher at R10.70, extending the recent re-rating of domestic hospitality names. The figures are provisional and unaudited, consistent with a sustainable operational recovery, with final audited results due on 20 May 2026.

AEL Altron raises FY26 Group HEPS guidance to 68-74% growth

Altron updated its trading statement to narrow and raise FY26 guidance, with Group HEPS now expected to grow 68% to 74% and continuing operations HEPS up 31% to 37%, signalling high management confidence ahead of final results due in May. The IT services and solutions group has delivered exceptional operational momentum, with the sharp upward revision confirming the turnaround strategy is fully on track. Despite a recent 11% price rally over the past 30 days, the forward price-to-earnings ratio of 9.6 times suggests the market has not yet fully priced in the acceleration. The guidance relies on unaudited financial information and figures remain subject to external review, but the narrowing of the range upwards is a credible positive signal. Investors evaluating the stock will want to assess the sustainability of this growth trajectory relative to the current market rating.

GFI Gold Fields delivers 15% Q1 production growth, reaffirms guidance

Gold Fields reported 15% year-on-year Q1 attributable gold-equivalent production growth to 633,000 ounces, driven primarily by a 245% production surge at Salares Norte as that asset continues to ramp up. Net debt fell 34% to US$1.304 billion even after distributing a US$1.234 billion final dividend, leaving leverage at a very low 0.19 times net debt to Adjusted EBITDA. Management reaffirmed full-year production guidance of 2.40 to 2.60 million ounces and the fortress balance sheet provides flexibility to accelerate shareholder returns if the gold price remains elevated. Some core assets faced headwinds, with Tarkwa, Agnew, and Gruyere reporting year-on-year declines of 25%, 31%, and 25% respectively, while All-in Sustaining Costs rose 13% year-on-year to US$1,829 per ounce. The company also faces legal uncertainty following notices of dispute and arbitration with mining contractor Engineers and Planners regarding historical claims.

LSK Lesaka raises FY2026 Adjusted EPS guidance to R5.50-R6.00

Lesaka delivered a 247% year-on-year expansion in Q3 Adjusted EPS to R1.80, with Group Adjusted EBITDA up 45%, prompting management to raise full-year guidance to R5.50 to R6.00 for FY2026. The Consumer and Enterprise segments drove exceptional profit growth, validating the diversified fintech platform strategy, though the Merchant segment showed continued weakness with a 13% revenue decline. The raised guidance offers a clear earnings trajectory for investors evaluating Lesaka's pending Bank Zero acquisition, which is not yet included in the projections. It is noted that the stock drifted 1.93% lower despite the positive results, possibly reflecting market caution around the Merchant segment performance or prior-period restatements that affected Q3 FY2025 comparatives. The group operates across multiple fintech verticals, and the underlying momentum in the growth segments appears robust.

MTN Routine Uganda subsidiary results notice draws no new data

MTN published an administrative SENS notice directing shareholders to the Q1 2026 financial results of its MTN Uganda subsidiary, hosted on the group's external reporting portal, without providing group-level metrics. This mechanical cross-reference is a routine regulatory compliance filing confirming that MTN Uganda has met its quarterly disclosure obligations across jurisdictions. The notice contains no new financial data or updated guidance for the broader MTN Group. The shares fell 3.90% to R210.65 on the day, underperforming a telecom sector index that declined 3.77%, reflecting broader sector weakness rather than any company-specific development contained in this filing.

What we are watching

Tomorrow brings final audited results from Southern Sun (20 May) alongside routine disclosure obligations across the board. Sappi covenant compliance will remain a key watchpoint for pulp and paper sector analysts as the group navigates the most challenging phase of its restructuring cycle.