BYD posts first profit drop in three years as Q2 earnings fall 29.9% on margin pressure despite revenue growth

South Africa

The Top 40 index shed 0.05% on Friday as it reached 94,184.6 points, while the All Share index closed 0.02% to settle at 101,835.6 points. Domestic data showed slowing M3 money supply growth (6.75%) alongside accelerating credit growth (5.8%). July’s trade surplus surprised to the upside at R20.29bn, but was offset by a sizeable budget deficit of R150.85bn. Northam Platinum reported a 14.4% drop in FY earnings amid rising costs, despite record sales volumes. Meanwhile, the SA Post Office suspended parcel shipments to the US following revoked duty-free access.

Europe

European equities retreated to two-week lows on Friday, with banks under pressure after a think tank urged the UK government to levy taxes on interest earned from Bank of England reserves. NatWest fell 4.8%, Barclays 2.2% and Lloyds 3.4%, driving the STOXX 600 down 0.6% and marking its first weekly loss in four, despite a second straight monthly gain. Sentiment was further dampened by German inflation accelerating to 2.1%, exceeding expectations, signalling the end of recent disinflationary trends and heightening scrutiny ahead of eurozone inflation data.

United States

The S&P 500 edged lower as inflation data and rising tariffs fed into concerns around margins, particularly in tech and AI-linked stocks like Dell (-9%). Consumer spending rose at its fastest pace in four months, reinforcing expectations of a 25bps Fed rate cut in September. Tariff exemptions for sub-$800 imports have expired, lifting costs for businesses and consumers. Meanwhile, Trump’s legal battle with the Fed remains unresolved, sustaining political risk.

Asia

China’s RatingDog manufacturing PMI moved back into expansion (50.5), while the official PMI stayed in contraction at 49.4. Japan (49.7) and South Korea (48.3) remained below the 50 threshold, signalling manufacturing softness exacerbated by US tariffs. Markets are also monitoring China-India diplomatic overtures and comments expected from President Xi.

Currencies

The rand was little moved on Friday despite mixed domestic data and a key U.S. inflation release, while the dollar traded flat as markets absorbed a rise in the Fed’s preferred PCE measure, reinforcing expectations of a rate cut next month. On Monday, the greenback drifted ahead of U.S. labour market releases, which will shape the size of the Fed’s easing. Investors are also weighing a court ruling against most of Donald Trump’s tariffs and political tensions surrounding the president’s attempt to dismiss Fed Governor Lisa Cook.

Commodities

Gold climbed to a four-month high on Monday, buoyed by stronger expectations of a U.S. Federal Reserve rate cut, while silver topped $40/oz for the first time in over a decade. Oil prices held in a narrow range as supply risks from intensified Russia-Ukraine airstrikes were offset by concerns over rising output and weaker demand prospects linked to U.S. tariffs. Russian exports fell to a four-week low of 2.72m bpd, though a Reuters poll suggested prices are unlikely to gain meaningful traction this year amid oversupply risks.

Northam Platinum Holdings Limited (NPH) -2.28%

Northam Holdings has released its audited consolidated annual results for F2025. Revenue rose 6.9% to R32.9 billion, while EBITDA declined 21.6% to R4.9 billion, with EBITDA and operating margins compressing to 14.9% and 10.9%, respectively. Basic earnings per share fell 17.3% to 381.4 cents, and headline earnings per share declined 14.4% to 380.8 cents. Despite softer earnings, dividends increased 26.5% to 215.0 cents per share. A final gross cash dividend of 200.0 cents per share (R800.2 million total) was declared, with a 20% withholding tax applying where relevant.

MAS P.L.C. (MSP) -3.80%

MAS delivered a strong performance for the year ended 30 June 2025, achieving a total shareholder return of 12%. IFRS-based distributable earnings rose 27.7% year-on-year to 9.53 eurocents per share, with H2 earnings of 4.44 eurocents per share aligning with guidance. IFRS earnings totalled €125 million, and tangible NAV grew 12% to €1.86 per share. The Group's returns were underpinned by its CEE-focused income property portfolio, the Development Joint Venture with Prime Kapital, and its commitment to disciplined capital allocation and asset management. MAS remains well positioned for long-term NAV and income growth.

Super Group Limited (SPG) +3.46%

Super Group expects solid results for the year ended 30 June 2025. From continuing operations, HEPS is anticipated between 237.1 and 242.7 cents, down up to 2.3% year-on-year, while EPS may decline up to 5.4%. However, including discontinued operations, HEPS is forecast to rise 24–28% to 438.7–452.9 cents, and EPS is projected to surge to 1,189.5–1,192.1 cents (FY24: 12.9 cents), driven by one-off impacts. The Group maintains a robust financial position, with conservative net debt and ample covenant headroom, supporting future flexibility and resilience. Final results are pending completion.

BYD Company Limited (002594) +4.34%

BYD reported a 29.9% year-on-year drop in Q2 net profit to ¥6.4 billion, its first quarterly decline in over three years, amid margin pressure from China’s crackdown on EV price wars. Revenue grew 14% to ¥200.9 billion. H1 profit rose 13.8% on 23.3% higher revenue. With 2.49 million units sold by July, BYD has met only 45% of its 5.5 million sales target. Vehicle sales and production are trending lower, while working capital deficit widened to ¥122.7 billion. Debt-to-asset ratio rose to 71.1%, prompting increased scrutiny of liquidity and capital discipline.

Dell Technologies Inc. (DELL) -8.88%

Dell shares fell ~10% as elevated costs and pricing pressure weighed on Q2 margins, overshadowing strong AI server demand. Adjusted gross margin declined to 18.7%, missing estimates, and Q3 EPS guidance of $2.45 also fell short. However, Dell raised full-year revenue guidance to $105–$109 billion (from $101–$105 billion), driven by AI infrastructure growth. Notable clients include xAI and CoreWeave. Despite profit compression, Dell trades at 13.2x forward earnings, above HP (10.8x) but below the S&P 500’s 22.3x, reflecting optimism around its AI exposure and longer-term growth prospects.

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