PDSNET Market Snapshot

Gold Fields (GFI) is a relatively high-cost international gold mining house with a single mine in South Africa - South Deep. South Deep was bought by Gold Fields in 2006 and it has struggled to make the mine profitable, pouring in a total of R32bn (R22bn purchase price plus R10bn in development costs) into it over the past 14 years.

Brett Kebble once described South Deep as, "The world's most expensive long drop...". South Deep is 3 kilometres deep and a very difficult mine with many technical complications, but it is the second largest unmined gold resource in the world - hence Gold Field's persistence. Gold Fields is working with an independent power producer (IPP) to build a 50MW project in SA.

The company has spent a total of $502m over the past two years to ensure that Damang and Gruyere (international operations) would produce 2 million ounces a year for the next ten years. South Deep now has R800m less in costs and R400m less in capital expenditure. The company is focusing on bringing the new Salares Norte gold mine in Chile into production.

On 11th July 2022 the company said that it would list on the Toronto Stock Exchange and that it would adopt a dividend policy of paying between 30% and 45% of profits out.  Its protracted investment in South Deep is definitely beginning to pay off with output expected to rise by about 25% over the next 4 years. On 12th August 2024 the company announced that it had acquired the remaining 50% of Osisko Mining for $1,57bn (R29bn).

In its results for the six months to 30th June 2025 the company reported attributable production up 24% with a higher gold price. The company said, "Normalised earnings for the six months ended June 2025 increased by 181% YoY to US$998m, or US$1.12 per share (H1 2024: US$355m, or US$0.40 per share), mainly driven by higher gold sales and higher gold prices received during the period." Goldfields also announced the acquisition of Gold Road resources in Australia for $3,7bn or R44bn.

In an operational update for the three months to 30th September 2025 the company reported attributable production up 6% and all-in sustaining costs down 10% at $1557 per ounce. The company said, "Post the quarter-end, Gold Fields completed the acquisition of Gold Road Resources and paid US$1.45bn (A$2.23bn),net of cash received, the special dividend paid by Gold Road upon transaction close and the disposal of the Northern Star Resources shares that were acquired as part of the transaction." In a trading statement for the year to 31st December 2025 the company estimated that HEPS would increase by between 110% and 123%.

The company said, "Group attributable gold equivalent production for FY 2025 of 2,438koz is expected to be 18% higher than the corresponding period in 2024". Technically, the share is volatile and subject to shifts in the international price of gold, but it has been in a strong upward trend over the past five years. It remains a volatile commodity play.

Previously, Kaap Agri, the KAL Group is an agricultural company owned 40,9% by Zeder, which is, in turn, 43,7% held by PSG. The company operates through over 190 retail outlets offering a wide range of products and services mainly to the farming community. Kaap Agri has seven divisions: (1) Pakmark offers a wide range of packaging materials for the local and export markets, especially to the fruit industry.

(2) Agrimark has over 70 stores in South Africa and Namibia offering a wide range of animal feeds, gardening equipment, tools, outdoor and camping equipment and pet accessories. (3) Liquormark offers a wide range of liquor products from beers to wines, spirits and mixers. (4) Kaap Agri Mechanisation offers farming machinery and equipment.

(5) Wesgraan offers grain handling and management services. (6) Expressmark supplies fuel, especially diesel, mainly to the farming community. It also has convenience stores. (7) The Fuel Company (TFC) aims to be the market leader in the independent fuel retail market in South Africa.

The group's product diversity has reduced its exposure to weather conditions in the agricultural sector, especially in the Western Cape, but it remains essentially a retail outlet which focuses on the agricultural sector and as such its results are impacted by the general level of consumer spending in South Africa and the state of the local economy as well agricultural conditions. On 4th October 2021 Kaap Agri announced that it had sold its 70,5% stake in TFC Properties for R446m.

On 19th January 2022 the company announced the acquisition of PEG Retail Holdings for R1,09bn. This acquisition increases the number of petrol stations which Kaap Agri has from 43 to 84. In its results for the year to 30th September 2025 the company reported revenue down 6,6% and headline earnings per share (HEPS) up 10,6%.

The company said, "The profit after tax of the Group amounted to R447 million (2024: R451 million) while the gross assets increased to R8 230 million (2024: R8 215 million)". Technically, the share broke down through its trendline on 6th January 2025 at 4952c and fell back to around to 3753c.

It has since been recovering but has just made it onto the Winning Shares List (WSL) on 9th October 2025 at a price of 4425c. In an update at the AGM, the company reported positive momentum in the Agrimark sector and an 8,7% increase in retail gross profit in the PEG sector. The debt/equity ratio was 34,3%.

We see it as a well-managed company that has exposure to South Africa's retail environment, loadshedding and also to the state of agriculture in this country. It has suffered with falling petrol prices recently. We recommend waiting for the share to begin a new upward trend before investigating further.

Issues surrounding expropriation of land without compensation have an impact on the company. However, with a P:E multiple of 7,89 these risks look to be fully discounted. 

Hudaco (HDC) is an importer and supplier of "...automotive, industrial and consumer products" mostly in Southern Africa. Its business has two sides (1) supplying automotive security, power tools, communications, and business supply products to the consumer market and (2) supplying mainly the mining and manufacturing industries with mechanical and electrical power transmissions, diesel engines, hydraulics and pneumatics, steel and thermoplastics, and fittings and bearings." The company has a very well-established business with 26 warehouses, 800 international suppliers and 140 branches.

Through this network they supply about 230 000 products. The company has been battling to export goods because of inefficiencies at South African ports, especially Durban. The group constantly makes bolt-on acquisitions to build and enhance its business. In its results for the year to 30th November 2025 the company reported revenue up 4,4% and headline earnings per share (HEPS) up 15,7%.

The company said, "We are delighted with the acquisitions of both Isotec and FloSolve and they have settled into the group well. Their results are included for seven and six months, respectively, this year, so their full impact will only be realised in 2026". Hudaco is an extremely well-managed company operating in a difficult economy.

As the economy improves, Hudaco's results will benefit directly. The share trades on a P:E of 9,75 and a dividend yield (DY) of 3,98% which looks cheap to us. In our view, this share should be bought on weakness and offers solid, long-term investment potential as the South African economy improves.

On 3rd June 2025 Hudaco announced the acquisition of Flosolve's trading assets and liabilities for R45m immediately and maximum of R125m depending on profitability over the next 3 years. This is a typical "bolt-on" acquisition which will add to Hudaco's existing markets and product range.

The latest results show that despite lower turnover the company was able to improve HEPS - this shows a significant improvement in efficiency.

ArcelorMittal (ACL) is South Africa's largest steel producing company. It has survived where companies like Highveld Steel have disappeared. Arguably, ArcelorMittal felt the impact of the sub-prime crisis more than any other South African company and has fallen from its high of R260 in June 2008 to as low as 25c in August 2020.

Since then, it has rallied strongly and now trades at 1052c. It has had to deal with the collapse of the construction industry locally, which was a major consumer of steel, and the massive imports of cheap Chinese steel which were dumped onto our market. Those imports have slowed down somewhat, and ArcelorMittal was successful in getting certain tariffs in place to discourage imports.

We believe that this company came close to closure in July 2020 when the share price reached 25c. It has been rescued by the rising steel price combined with severe cost cutting. On 6th January 2025 the company announced that it had taken the decision to wind down and close its Longs steel division - leading to a sharp drop in the share price.

On 19th March 2025 the company announced that the government will provide funds to keep the long steel plant open by paying the wages at the plant for the next year. This has caused the share price to rise, but will probably not prevent the eventual closure of the plant in time. ACL said that in 2024 it paid R3,2bn to Eskom for electricity - up 14% on the previous year and that electricity costs had risen by more than 800% since 2007.

In its results for the year to 31st December 2025 the company reported revenue down 16% and a headline loss of R3,355bn. Borrowings increased to R6,48bn from R5,11bn the previous year. The company said, "Long steel business ("Longs Business") wound down into care and maintenance by the end of 2025 • Sales volumes down 12% to 2 million tonnes (crude steel production down 12% to 2,3 million tonnes), with the Flat steel business ("Flats Business") down 4% at 1,4 million tonnes (2024: 1,45 million tonnes) (crude steel production up 8% to 1,8 million tonnes on improved reliability)". In our view this is not a good investment because it is heavily dependent on government assistance and tariffs.

On 29th August 2025 the company announced that it would be winding down its long steel business because it had been unable to obtain government support. The share has been drifting sideways since September 2023. 

Valterra, (VAL) was previously Anglo American Platinum, or Amplats, and is the second largest platinum producing company in the world (after Sibanye), producing a large portion of the world's platinum. VAL was one of the first platinum mining companies in South Africa to move away from expensive deep-level mining towards shallower, more mechanised mining.

The company has reduced the number of mines it is operating from 18 to 7 over 5 years, decreased overheads by 50% and its number of employees by 50%. This shift is now paying dividends. The Mogalakwena open-cast operation is a palladium-rich operation with costs in the lowest quartile in the platinum group metals (PGM) industry world-wide.

A new project at Mogalakwena will see platinum production up by 250 000 ounces and palladium production up by 270 000 ounces. The company also recently bought out Glencore's 40,2% stake in their joint venture Mototolo mine and the adjacent Der Brochen property for R1,5bn. Mototolo is a highly mechanised shallow mine which can be extended into Der Brochen without putting in new surface infrastructure.

The platinum price is plagued by an effective re-cycling industry which produces about 2 million ounces a year by recovering from old auto catalysts. We believe VAL is one of the best of the PGM shares on the JSE - but it remains a commodity share and thus volatile and unpredictable.

In its results for the six months to 30th June 2025 the company reported PGM sales volumes down 25% and refined PGM production down 18%. The rand basket price per PGM ounce was up 3% but revenue was down 19%. Headline earnings per share (HEPS) fell 81% and all-in sustaining costs were up 1%.

The company said, "Own-mined PGM production (expressed as 5E+Au metal-in-concentrate (M&C)) declined by 12% to 926,100 ounces, primarily due to the flooding at Amandelbult in February 2025 following heavy rains." In an update on the 3 months to 30th September 2025 the company reported refined PGM production down 5% and sales volumes down 9%. The company said, "We remain on track to deliver M&C production of 3.0-3.2 million ounces.

M&C production from our own operations is expected to be ~2.0 million PGM ounces and POC between ~1.0-1.2 million PGM ounces. Refined production and sales volumes guidance is expected at ~3.4 million PGM ounces due to sustained improvements in stability and reliability of the processing infrastructure." In a trading statement for the year to 31st December 2025, the company estimated that HEPS would increase by between 85% and 105%.

In an update on the 3 months to 31st December 2025 the company reported PGM production up 1% and sales volumes up 4%. Technically, the share was moving sideways from September 2023, mainly due to the challenges faced by the industry including loadshedding and falling PGM prices, but is now responding to rising PGM prices and moving into an upward trend.

We added it to the Winning Shares List (WSL) on 2nd July 2025 at 83183c and it has since gone up to 140978c. On 20th March 2025 the company announced that it will be changing its name to Valterra Platinum from Amplats with the same ISIN code (AMS) with effect from 30th May 2025. The listing on the LSE happened on Monday 2nd June 2025.