Investec: Rand’s fall to cut value of SA earnings

Investec’s full-year profit might be crimped after the rand slumped almost 11 percent against the pound over the past four months, the company has warned. “Assuming all things being equal and that profits don’t grow in the second half versus the first half, then yes, the weakening rand will impact results further,” Investec head of investor relations Ursula Nobrega said in response to questions last week. Investec, which owns a bank and money manager in South Africa and the UK, reported a 1.6 percent drop in net income to £164.3 million (R3 billion) in the six months to September last year after a decline in the rand cut the value of its South African earnings. Southern Africa accounted for almost 70 percent of first-half operating profit. The rand has since fallen 10 percent against the dollar. “We do not hedge our profits” for currency risk, Nobrega said. “We are not in the business of guessing where the rand may move to.” Investec has declined 12 percent in London trading this year. The JSE-listed shares of Investec Limited fell by 1.61 percent to close at R69.46 yesterday. – Bloomberg