Brimstone’s health business pivots amid Trump aid cuts

Brimstone Investments Corporation CEO Mustaq Brey says the company has navigated trade fragmentation and bilateral aid cuts for health programmes well to deliver a pleasing set of interim results.

Brimstone Investments released its interim results for the six months ended June 30 on Tuesday. Brimstone’s primary investments are in sectors such as fisheries, financial services and health, including Sea Harvest Group, Oceana Group, Obsidian Health, and South African Enterprise Development.

The company announced HEPS were up 4% to 100.7c, while cash dividends rose 76.5% to R161.4m, intrinsic net asset value rose 11.7% to 1,103.7c per share, and finance costs fell R30.7m, or 36.3%, to R50.4m.

However, revenue for Obsidian Health also declined slightly due to the reduced sales in the point-of-care division and US funding cuts to health-care programmes.

Brey told Business Day Brimstone management has been “number one” in its response to the headwinds presented in the trade and aid environment, and the company looked for alternative avenues to sell products in the market, including blood-testing solutions.

“With the Trump administration cutting back on the HIV support systems in Africa, they thankfully got into some other products late last year, which has sorted out right. And, I mean, their profits for the first six months are bigger and higher than last year’s first six months.”

Early last year Trump signed an executive order to cut US financial assistance to South Africa, with the White House citing disapproval of the policy of land expropriation and South Africa’s case against Israel at the International Court of Justice, setting critical health-care programmes back considerably.

Brey said he was “very happy” that despite a period of trauma, Brimstone could produce “such a positive result”, adding that Oceana’s share price closed at R68.04 per share, up from R55.74 per share on December 31 2025, despite potential threats from tariffs.

“I think the most pleasing point for me is that it’s probably been six months of trauma out in the world. We didn’t know what was happening. The war in the Middle East started exactly six months ago yesterday [Monday], on February 28.

“We didn’t know what to expect. Fuel prices have gone through the roof. Logistics has been affected. Transport of goods has been affected. At first, we have come out with a flat result compared with last year. Just a slight increase in headline earnings.”

Brey said the first six months of 2026 reflect the continued benefits of the group’s disciplined approach to capital allocation, debt reduction and cost management.

“While operating conditions remain challenging across many sectors of the economy, the group delivered growth in headline earnings and achieved a meaningful increase in intrinsic net asset value per share.”

He said the substantial increase in cash dividends received from Brimstone’s underlying investments, together with significantly lower finance costs, has further strengthened the group’s balance sheet.

“We remain focused on unlocking value from our investment portfolio while maintaining a prudent approach to managing risk and capital.”

Fred Robertson, executive chair of Brimstone, said the company’s performance during the period demonstrates the resilience of its diversified investment portfolio and enduring value of its long-term investment philosophy.

“We are particularly encouraged by the growth in intrinsic net asset value, the strengthening of the group’s financial position and the continued cash generation from our core investments.

“As we navigate an environment characterised by ongoing global conflict and domestic economic challenges, we remain committed to creating sustainable value for our shareholders while remaining true to our philosophy of profitability, empowerment and positive social impact.”

The South African Enterprise Development Investment Vehicle, in which Brimstone owns 25%, contributed R2.6m in equity-accounted losses compared with R1.8m profits in 2025. Brey said Brimstone was a passive investor in the fund and was tying up its investment and waiting for the right offer to be bought out.