Coronation’s results reflect the strong headwinds in South Africa and tough operating conditions globally

23 May 2023

Assets under management: R623 billion
Diluted headline earnings per share: 6.2 cents
Fund management loss: 13 cents
Interim dividend: No dividend payout

Cape Town, 23 May 2023 – Long-term valuation-driven asset manager Coronation Fund Managers today announced its interim results for the six months to 31 March 2023.

The economic and market environment for the first six months of the 2023 financial year remained challenging. Global markets have been volatile, with central banks in many countries administering a dramatic and painful increase in interest rates from unprecedented low levels.

The performance of the South African economy has also been very discouraging, with the long-term fundamentals continuing to deteriorate and little concrete action being taken to drive meaningful change.

CEO Anton Pillay believes the biggest and most immediate concern is the state of electricity  generation,  “While the recent regulatory relaxation to allow private sector power generation should reduce the intensity of loadshedding in the medium term, we do not believe that the current long-term plans sufficiently acknowledge the scale of new baseload capacity nor the investment in transmission infrastructure that is required.

“If these investments are not sufficiently prioritized, then the system will be unable to support renewables at the scale currently envisaged. The timelines required mean that if these decisions are not taken now, we will continue to face unacceptable energy deficits in the decades ahead.”

Long-term performance remains compelling

In spite of the prevailing headwinds, Coronation has proven its resilience with compelling long-term performance across its local portfolios and closing AUM for the period up 9% at R623 billion (30 September 2022: R574 billion). Over 95% of Coronation’s portfolios have outperformed their benchmarks since inception.*

“We are particularly encouraged by the performance of our global portfolios over the last 12 months. We remain of the view that the above macro shocks have created attractive stock-picking opportunities for those investors prepared to take a long-term view,” says Pillay.

The company experienced outflows of 5% of average AUM, which according to Pillay, is in line with recent experience and is a trend that the Group expects to continue as the local savings pool continues to contract.

Total fixed expenses increased by 11% from the prior corresponding period. Key drivers of this include an increase in employee expenses, establishing a multi-office capability and a weak rand. The average rand/dollar exchange rate weakened by 15% from the comparative period, impacting many of the businesses expenses. This is especially so in relation to technology in which it continues to invest, particularly with respect to cyber and data security and compliance systems.

On the issue of the Group’s ongoing dispute with the South African Revenue Service (SARS), Pillay states that they are firmly of the view that the Supreme Court of Appeal (SCA) erred in its ruling, “We remain confident in the strength of our position in this dispute and have applied for the right to appeal the ruling of the SCA in the Constitutional Court. The Group has made full provision for the impact of said judgement, which has resulted in the significant decline in profits.

Earnings per share, headline earnings per share and diluted headline earnings per share of 6.2 cents was recognised for the period ended 31 March 2023. This is compared to earnings per share, headline earnings per share and diluted headline earnings per share of 199.1 cents per share for the prior corresponding period.

The impact of the total obligation payable to SARS as per the SCA judgement amounts to R716 million. Excluding this impact, fund management earnings of 191.5 cents per share were generated for the period ended 31 March 2023 compared to fund management earnings of 214.8 cents per share for the prior corresponding period.

Given the material impact of the current tax ruling on the half year results, Coronation will not be paying an interim dividend. Pillay explains, “This is in line with our dividend policy, which states that dividend payouts are dependent on our after-tax cash profits.

“While the potential impact of the ongoing tax dispute with SARS has been accounted for in these interim results, it has not had a material impact on Coronation’s long-term sustainability and the Group remains fully operational and well capitalised.”


Having invested in the future of a democratic South Africa when Coronation opened its doors in 1993, the business remains committed to contributing to a fair and equitable business sector and a representative society. They have maintained Level 1 status as a contributor to B-BBEE, and are 29% black owned while R298 billion, representing 48% of total AUM, is managed by black investment professionals.

Over the course of three decades, they have actively contributed to meaningful transformation. Pillay underscores the active, on-the-ground work the Group has done to contribute to achieving a transformed sector, “Coronation has over the years helped to establish four black-owned financial services companies, provided support for black brokerages, trained and developed black independent financial advisors and analysts via partnerships with industry participants, and supported black-owned businesses through our Preferential Procurement Policy.

“Additionally, we are committed to developing a pipeline of talent to ensure the future success of the South African financial services arena. With this in mind, we offer full bursaries to students pursuing careers in finance, including coaching to help them transition to campus life. Our internships and graduate development programmes offer promising young professionals access to hands-on work experience and, in many instances, employment. We continue to uplift the communities in which we operate, with a focus on numeracy, literacy, and youth employment, while also contributing to the important work of food security initiatives during these pressing economic times.”

Coronation’s own workforce reflects its ongoing commitment to achieving a transformed business and industry, with key leadership positions held by black leaders. These include the CEO, CFO, COO, Head of Institutional Distribution, Head of Fixed Income, Head of Core Equity and Head of Absolute Return. As at 31 March 2023, of Coronation’s employees:

  • 50% are women
  • 64% are black, of whom 58% are women
  • 80% of the Board of Directors are black and 50% are women
  • 82% of new starters are black and 45% are women


Coronation has been an active steward of their clients’ capital for 30 years and fully integrate environmental, social and governance (ESG) considerations into their investment and business processes. From an investment perspective, their ESG research is conducted inhouse by a large team of analysts and is factored into each investment case.

It’s fifth annual Stewardship Report is due to be published in the second quarter of this year and will be available on Coronation’s website. The report provides a detailed account of Coronations’ stewardship activities for the 2022 calendar year. This includes details their engagements with companies on a range of ESG factors that affect their sustainability.

The report also sets out how the team evaluates, measures and manages climate-related risks within their clients’ portfolios. The company encourages investee companies to report on their carbon, explains Pillay, “We continue to encourage investee companies to disclose their carbon emissions profiles in line with the Taskforce for Climate-Related Financial Disclosure (TCFD) framework, and to ensure that climate-action plans are clear, credible and appropriate to their business operations. Keeping to the standards that we ask of our investee companies, Coronation applies the TCFD framework when reporting on both our investment and business operations.”

In 2022, Coronation published their fourth operational Carbon Footprint Disclosure and first Sustainability Report, along with the Integrated Annual Report. “We are proud that we have achieved carbon neutral status in partnership with Walker’s Recycling, a carbon-offset project. As a participating investor in Climate Action 100+, we fully support the move to a greener, more sustainable and equitable world and will continue in our endeavours to engage on these matters.

“As Coronation is an investment-led business, the success of our business is ultimately rooted in our commitment to generating long-term alpha for our clients, while ensuring that we are an active corporate citizen working towards creating a sustainable business environment in South Africa. While the past 18 months have been incredibly difficult for investors, we are positive about the opportunities that economic stress is providing to patient investors who are prepared to take the long-term view. We believe that our deep proprietary research and long-term, fundamental, bottom-up investment philosophy equip us well to make the appropriate long-term decisions for the benefit of our clients and all our stakeholders” he concludes.

 *Company-wide, asset-weighted, since-inception for funds with >10-year track record.