ArcelorMittal is still winding down the long steel business (JSE: ACL)

Thus far, nothing has emerged that could stop the process

ArcelorMittal is very begrudgingly winding down their long steel business. They fully understand the social impact that this has. The only way to stop this process would be through a funding package and agreement with stakeholders (including government) on measures to improve the economics.

In the meantime, the company has received various offers regarding the longs business and even the group as a whole. At this stage, nothing is a firm intention to make an offer as defined in the Companies Act.

Of course, this didn’t stop the share price from closing 7.7% higher on Wednesday as speculative punters took a stab at the thought of an offer coming through for the group.

Sabvest had an excellent year in 2024 (JSE: SBP)

NAV per share growth was well above recent averages

Investment holding company Sabvest had a particularly good time in 2024. The net asset value (NAV) per share grew by 20.8%. This is the right metric for an investment holding company to use. The dividend per share increased by 16.7% and I think we can agree that cash is a language that we all understand.

They have a long-term mindset at Sabvest, which means you’ll usually see them referencing things like the 15-year compound annual growth rate (CAGR) in the NAV per share. Sitting at 18.1% without reinvesting dividends, I would also make a noise about that number!

Things have been tougher post-pandemic, with the 3-year CAGR for NAV at 12.1% (still a solid number). You can therefore see that 2024 was significantly better than recent years. Importantly, this is due to growth in earnings in the underlying portfolio companies, as the multiples used to value the companies are unchanged vs. 2023 with the exception of two investments. In other words, the NAV growth isn’t thanks to valuation trickery.

The thing that makes Sabvest interesting is that most of the portfolio sits in unlisted assets that the market can’t get access to any other way. This is exactly what investment holding companies should do.

There were a number of underlying transactions in the portfolio in 2024, with one of the notable ones being the sale of the WeBuyCars shares received from Transaction Capital through the unbundling. Along with other sales, this led to a material decrease in debt during the period.

The NAV per share is R132.13 and the share price is R87.50, so there’s a material discount to NAV as per usual for investment holding companies.

Nibbles:

• Director dealings:
  • A non-executive director of Discovery (JSE: DSY) sold shares worth R986k.
  • Des de Beer bought more shares in Lighthouse Properties (JSE: LTE), this time to the value of R434k.
  • A director of OUTsurance (JSE: OGL) bought shares worth R99k.

• Sappi (JSE: SPP) successfully closed the raise of €300 million worth of 4.5% sustainability-linked senior notes due 2032, They will use the net proceeds to redeem €240 million in notes due 2026, with the remainder for general corporate purposes.

• Sephaku Holdings (JSE: SEP) has followed in the footsteps of many other small- and mid-caps in moving its listing to the General Segment of the JSE. The idea is that this is a less onerous regulatory environment for smaller listed companies.