Gold miners' Midas touch leaves energy and pharma in the dust

This reporting season in South Africa is defined by a single, stark divergence: commodity-driven miners, especially gold and platinum group metals, are roaring ahead with revenue growth that leaves the rest of the market looking pedestrian. While gold miners posted a median revenue surge of 64.8% year over year, sectors like paper & pulp and pharma actually shrank. The gap between the haves and have-nots has never been wider, and it is reshaping the investment landscape.

Revenue growth by industry (median YoY)

Gold and PGMs are the undisputed champions of the season

The gold mining sector is on fire. AngloGold Ashanti saw revenue jump 64.8% year over year, while net profit skyrocketed 189.2%. Gold Fields was even more impressive, with revenue up 68.2% and net profit soaring 186.5%. In the PGM space, Impala Platinum delivered a stunning 43.7% revenue increase and a net profit surge of 399.0%, while Northam Platinum posted a 60.0% revenue gain. These are not just cyclical rebounds; they are structural windfalls driven by elevated commodity prices.

Pharma, paper, and energy are the season's laggards

At the other end of the spectrum, Aspen Pharmacare suffered a 4.3% revenue decline and a 38.4% drop in net profit. Sappi's paper & pulp business saw revenue shrink 1.0% and EBITDA collapse by 435.5%, a brutal margin compression. Sasol, in energy and chemicals, managed only 0.2% revenue growth while net profit plunged 94.8%. These sectors are struggling with weak demand and cost pressures, a stark contrast to the mining boom.

The surprise: Naspers' internet revival and a retail shake-up

The biggest plot twist comes from Naspers, the internet and media holding company. Its revenue accelerated from a prior period of no growth to a blistering 51.1% year over year, while EBITDA surged 252.6%. This is a dramatic turnaround for a name many had written off. Meanwhile, in retail, Pepkor's discount model delivered a solid 13.2% revenue gain, but The Foschini Group saw net profit crash 58.7% despite 7.1% revenue growth, highlighting a deep margin squeeze in discretionary retail.

Valuation bargains hide in plain sight among the miners

Despite their stellar growth, gold miners trade at surprisingly low multiples. Gold Fields has a P/E of just 8.3x and an EV/EBITDA of 5.7x, while AngloGold Ashanti trades at 11.8x earnings and 5.6x EV/EBITDA. These are cheap for companies growing revenue at 60-70%. In contrast, Capitec Bank, with 19.0% revenue growth, commands a P/E of 31.9x — a premium that reflects its consistent compounding but leaves little room for error. The real value play may be in Kumba Iron Ore, which trades at a P/E of 5.8x and an EV/EBITDA of 2.2x, offering a margin of safety even with modest 2.3% revenue growth.

Income investors have plenty to choose from, but yields vary wildly

For yield seekers, Old Mutual stands out with an EV/EBITDA of just 1.3x, suggesting a deep value play, while its insurance peer Momentum Group offers an EV/EBITDA of 1.7x. Among miners, Exxaro Resources trades at an EV/EBITDA of 3.7x, and Sibanye-Stillwater at 3.6x, both likely offering attractive dividend yields given their cash generation. However, caution is warranted: Sanlam's net profit fell 28.3% despite revenue growth, a warning that yields may not be sustainable across the board.

Looking ahead, the 3-year revenue CAGR tells a compelling story. Old Mutual leads with a CAGR of 61.2%, but this is from a low base. More impressive are AngloGold Ashanti at 30.0% and Gold Fields at 26.9%, showing sustained momentum. Capitec Bank's 20.5% CAGR reinforces its premium valuation. The key question for next season is whether commodity prices can hold or if the gap between miners and the rest of the market will narrow. Investors should watch for signs of margin recovery in retail and energy, and whether Naspers can sustain its internet-driven renaissance.

Players: growth & yield (no absolute levels)