Invicta Holdings' Offshore Expansion Tackles Market Challenges Despite 990,000 Forex Loss

Invicta Holdings, led by South African billionaire Christo Wiese, has reported steady trading results for the six months to Sept. 30, 2024. However, its profits were affected by a foreign exchange-related loss as the South African rand strengthened against major currencies. The Johannesburg Stock Exchange JSE-listed company, which continues to expand its industrial parts and components businesses offshore, saw headline earnings per share fall by 14 percent to 231 cents, compared to 269 cents during the same period in 2023.

While trading results remained in line with the previous period, the company faced a foreign exchange loss of R18 million 990,000, a sharp contrast to the R33 million 1.8 million gain reported in the prior comparable period. CEO Stephen Joffe reiterated that the companys offshore expansion strategy, though increasingly reliant on foreign currencies, remains sound. We believe our strategy is solid and will prove beneficial in the long term, he said. Joffe acknowledged that market uncertainty exacerbated by elections in several countries where Invicta operates and rand volatility presented challenges for the business.

We are confident that Invicta is well-positioned with experienced teams, strong customer relationships, and a solid footprint both nationally and globally to continue to provide sustainable returns to shareholders, Joffe added.

Over the past six months, Invicta has made several strategic moves to enhance shareholder value. This includes the redemption of 6.9 million outstanding preference shares for R703 million 39 million, unlocking additional value for shareholders. The company also made key acquisitions and disposals. Invicta acquired National Bearing in the UK for R294 million 16 million, a supplier of consumable parts to the earthmoving and agricultural machinery aftermarket, expanding its footprint in the sector. In April 2024, Invicta sold its 100-percent stake in KMP Holdings for R293 million 16.1 million, as well as a 51-percent stake in Abrasive Flow Solutions for R7 million 385,000 in August. Additionally, the company sold its Kosmosdal property for R9 million 495,000, classified as an asset held for sale.

Despite market challenges, Invicta reported a two-percent increase in revenue, rising to R4 billion 220 million from R3.93 billion 216 million in the previous period. Operating profit before foreign exchange movements increased by 11 percent to R368.85 million 20 million, and cash on hand stood at a healthy R734 million 40 million.