{"id":263962,"date":"2025-10-21T10:57:47","date_gmt":"2025-10-21T10:57:47","guid":{"rendered":"https:\/\/www.premium-partners.net\/?p=263962"},"modified":"2025-10-21T16:07:15","modified_gmt":"2025-10-21T16:07:15","slug":"south-africas-top-corporates-show-resilience-amid-structural-and-cost-pressures-moodys","status":"publish","type":"post","link":"https:\/\/www.premium-partners.net\/fr\/builder\/south-africas-top-corporates-show-resilience-amid-structural-and-cost-pressures-moodys\/","title":{"rendered":"South Africa\u2019s top corporates show resilience amid structural and cost pressures \u2014 Moody\u2019s"},"content":{"rendered":"

This post<\/a> was originally published on this site<\/a><\/p>

<\/p>\n

South Africa\u2019s largest listed companies are demonstrating resilience despite facing persistent structural challenges, high borrowing costs, and infrastructure bottlenecks, according to analysts at Moody\u2019s Investors Service.<\/p>\n

While the country\u2019s economy remains constrained by weak growth, high unemployment, and ongoing energy and logistics challenges, blue-chip corporates on the JSE continue to leverage strong balance sheets and diversified funding strategies to weather the difficult environment.<\/p>\n

\u201cThese are diversified, blue-chip corporates with access to international financing as well, though more domestic than international,\u201d said <\/span>Iker Ballestero Barrutia, corporate finance analyst at Moody\u2019s. <\/span>\u201cBut this varies significantly by sector and company size.\u201d<\/span><\/p>\n

Despite improved access to capital through local and international markets, t<\/span>he cost of capital has risen significantly over the past five years<\/span>. A<\/span> recent decline in benchmark interest rates is beginning to ease pressure<\/span>s though<\/span>.<\/span><\/p>\n

Despite some improvements, <\/span>power supply issues<\/span> still persist although ongoing<\/span> inefficiencies in logistics infrastructure \u2014 particularly in South Africa\u2019s ports and rail systems \u2014 <\/span>remain as <\/span>key constraints to growth.<\/span><\/p>\n

However the <\/span>Moody\u2019s<\/span> analysts <\/span>emphasized that corporate South Africa has responded with adaptability<\/span>, with m<\/span>any firms <\/span>investing in <\/span>private energy generation<\/span> and <\/span>outsourcing logistics to mitigate infrastructure failures.<\/span><\/p>\n

Sh<\/span>eri <\/span>Morgan, <\/span>d<\/span>eputy <\/span>d<\/span>irector <\/span>and h<\/span>ead of <\/span>c<\/span>orporate<\/span> ratings at GCR said SA<\/span> corporate property funds <\/span>were now <\/span>showing signs of recovery, particularly in retail and logistics sub-sectors.<\/span> <\/span><\/p>\n

P<\/span>roperty income growth for some firms <\/span>was outpacing <\/span>inflation, driven by strategic portfolio repositioning and improved asset quality.<\/span><\/p>\n

\u201cMany funds have undertaken asset recycling, shifting investments to meet evolving post-COVID demand trends,\u201d said Morgan. \u201cThis includes focusing on properties aligned with consumer behavior shifts and improving portfolio relevance.\u201d<\/span><\/p>\n

Defensive characteristics \u2014 such as escalated lease structures and diversified tenant bases \u2014 <\/span>had also helped to <\/span>offset macroeconomic challenges. <\/span><\/p>\n

Positive external tailwinds, such as lower interest rates, reduced load shedding, and firmer consumer spending, <\/span>were also providing support for<\/span> a rebound in property fundamentals. <\/span><\/p>\n

However, the office segment continues to lag behind, with recovery expected to be slow and gradual.<\/span><\/p>\n

Moderate gearing levels and manageable debt maturities have contributed to funding flexibility. Capital market access<\/span>, <\/span>for both debt and equity<\/span>, had <\/span>improved, helping bolster liquidity across the sector.<\/span><\/p>\n

Still, rising utility costs and deteriorating municipal service delivery remain key challenges that could erode margins.<\/span><\/p>\n

\u201cReal estate companies that are proactive \u2014 managing their own energy and water supply \u2014 are more likely to stabilize or even outperform the broader market,\u201d Morgan added.<\/span><\/p>\n

Looking ahead, <\/span>the Moody\u2019s and GCR Ratings <\/span>analysts<\/span> believe that <\/span>unlocking higher growth potential will require visible progress in logistics reform.<\/span><\/p>\n

While the government has taken steps to open freight rail operations to private sector participation, material economic benefits are expected to take time.<\/span><\/p>\n

\u201cThere\u2019s recognition of the private sector\u2019s role \u2014 not just in capital but in expertise,\u201d said<\/span> another analyst. <\/span>\u201cProgress on port and rail privatization is encouraging, but reforms in logistics are more complex and slower than what we saw in electricity.\u201d<\/span><\/p>\n

The World Bank estimates that <\/span>inefficiencies in <\/span>South Africa\u2019s <\/span>rail and port networks reduced export capacity by around 20% in 2023.<\/span><\/p>\n

Although <\/span>increased private sector involvement could alleviate this burden, analysts <\/span>have <\/span>remain<\/span>ed<\/span> cautious<\/span> about prospects of this as the \u201c<\/span>scale of new investment may not be enough to lift long-term growth<\/span>\u201d<\/span> above 2%<\/span>.<\/span><\/p>\n

While reforms continue, Moody\u2019s plans to release its updated 2027 forecast in November. Until then,<\/span> the ratings agency is maintaining a cautious outlook, <\/span>with a baseline scenario of modest growth supported by incremental reform and corporate adaptability.<\/span><\/p>\n

BUSINESS REPORT<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

South Africa\u2019s largest listed companies are demonstrating resilience despite facing persistent structural challenges, high borrowing costs, and infrastructure bottlenecks, according to analysts at Moody\u2019s Investors Service.While the country\u2019s economy remains constrained by weak growth, high unemployment, and ongoing energy and logistics challenges, blue-chip corporates on the JSE continue to leverage strong balance sheets and diversified funding strategies to weather the difficult environment.\u201cThese are diversified, blue-chip corporates with access to international financing as well, though more domestic than international,\u201d said\u00a0Iker Ballestero Barrutia, corporate finance analyst at Moody\u2019s.\u00a0\u201cBut this varies significantly by sector and company size.\u201dDespite improved access to capital through local and international markets, the cost of capital has risen significantly over the past five years. A\u00a0recent decline in benchmark interest rates is beginning to ease pressures though.Despite some improvements,\u00a0power supply issues\u00a0still persist although ongoing\u00a0inefficiencies in logistics infrastructure \u2014 particularly in South Africa\u2019s ports and rail systems \u2014\u00a0remain as\u00a0key constraints to growth.However the\u00a0Moody\u2019s\u00a0analysts\u00a0emphasized that corporate South Africa has responded with adaptability, with many firms\u00a0investing in\u00a0private energy generation\u00a0and\u00a0outsourcing logistics to mitigate infrastructure failures.Sheri\u00a0Morgan,\u00a0deputy\u00a0director\u00a0and head of\u00a0corporate ratings at GCR said SA\u00a0corporate property funds\u00a0were now\u00a0showing signs of recovery, particularly in retail and logistics sub-sectors.\u00a0Property income growth for some firms\u00a0was outpacing\u00a0inflation, driven by strategic portfolio repositioning and improved asset quality.\u201cMany funds have undertaken asset recycling, shifting investments to meet evolving post-COVID demand trends,\u201d said Morgan. \u201cThis includes focusing on properties aligned with consumer behavior shifts and improving portfolio relevance.\u201dDefensive characteristics \u2014 such as escalated lease structures and diversified tenant bases \u2014\u00a0had also helped to\u00a0offset macroeconomic challenges. Positive external tailwinds, such as lower interest rates, reduced load shedding, and firmer consumer spending,\u00a0were also providing support for\u00a0a rebound in property fundamentals. However, the office segment continues to lag behind, with recovery expected to be slow and gradual.Moderate gearing levels and manageable debt maturities have contributed to funding flexibility. Capital market access,\u00a0for both debt and equity, had\u00a0improved, helping bolster liquidity across the sector. Still, rising utility costs and deteriorating municipal service delivery remain key challenges that could erode margins.\u201cReal estate companies that are proactive \u2014 managing their own energy and water supply \u2014 are more likely to stabilize or even outperform the broader market,\u201d Morgan added.Looking ahead,\u00a0the Moody\u2019s and GCR Ratings\u00a0analysts\u00a0believe that\u00a0unlocking higher growth potential will require visible progress in logistics reform. While the government has taken steps to open freight rail operations to private sector participation, material economic benefits are expected to take time.\u201cThere\u2019s recognition of the private sector\u2019s role \u2014 not just in capital but in expertise,\u201d said\u00a0another analyst.\u00a0\u201cProgress on port and rail privatization is encouraging, but reforms in logistics are more complex and slower than what we saw in electricity.\u201dThe World Bank estimates that\u00a0inefficiencies in\u00a0South Africa\u2019s\u00a0rail and port networks reduced export capacity by around 20% in 2023.Although\u00a0increased private sector involvement could alleviate this burden, analysts have\u00a0remained\u00a0cautious\u00a0about prospects of this as the \u201cscale of new investment may not be enough to lift long-term growth\u201d\u00a0above 2%.While reforms continue, Moody\u2019s plans to release its updated 2027 forecast in November. Until then, the ratings agency is maintaining a cautious outlook, with a baseline scenario of modest growth supported by incremental reform and corporate adaptability.BUSINESS REPORT<\/p>","protected":false},"author":1,"featured_media":48263,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-263962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-builder"],"_links":{"self":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/263962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/comments?post=263962"}],"version-history":[{"count":1,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/263962\/revisions"}],"predecessor-version":[{"id":263963,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/263962\/revisions\/263963"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media\/48263"}],"wp:attachment":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media?parent=263962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/categories?post=263962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/tags?post=263962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}