SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

|X|      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998.

o        TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE  ACT  OF  1934  FOR  THE  TRANSITION  PERIOD  FROM  __________
         TO___________.

                           Commission File No. 0-27494

                          FIRST SOUTH AFRICA CORP., LTD
             (Exact name of registrant as specified in its charter)

                       Bermuda                            Not Applicable   
         (State or other jurisdiction of   (I.R.S. Employer Identification No.)
         Incorporation or Organization)

             Clarendon House, Church Street, Hamilton HM CX, Bermuda
             (Address of principal executive offices with Zip Code)

Registrant's telephone number, including area code: (310) 212-7910

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes [X] No [ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE
PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                  Yes    [ ]    No   [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of common  stock  outstanding  as of November  12, 1996 was
7,841,464.


<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                       REPORT OF THE INDEPENDENT AUDITORS


                                      INDEX

<TABLE>
<CAPTION>

<S>                                                                                                 <C>
PART I - FINANCIAL INFORMATION                                                                               Page

         Item 1.   Financial Statements

                   Unaudited Consolidated Balance Sheets at September  30, 1998 and
                           June 30, 1998 ...........................................................................

                   Unaudited Consolidated Statements of Income for the three months ended
                           September 30, 1998 and 1997..............................................................

                   Unaudited Consolidated Statements of Changes in Stockholders' Investment for the
                           period June 30, 1998 to September 30, 1998...............................................

                   Notes to the unaudited Consolidated Financial Statements.........................................


         Item 2:   Management's Discussion and Analysis of Financial Condition and Results of
                   operations.......................................................................................

         Item 3:   Qualitative and Qualitative Disclosures about Market Risk........................................


PART II - OTHER INFORMATION

         Item 6:   Exhibits and Reports on Form 8-K.................................................................

</TABLE>

                                       2
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                      UNAUDITED CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>


                                                            ASSETS
                                                                                                September 30,         June 30,
                                                                                                         1998             1998
                                                                                                            $                $
                                                                                                -------------       ----------

<S>                                                                                             <C>                 <C>       
Current assets
     Cash on hand                                                                               14,874,811          17,948,991
     Trade accounts receivable                                                                  20,026,203          16,871,292
     Less: Allowances for bad debts                                                               (678,776)           (833,785)
                                                                                               ------------        ------------
                                                                                                19,347,426          16,037,507

     Inventories (net)                                                                          13,053,476          11,742,613
     Prepaid expenses and other current assets                                                   1,857,878           1,711,428
                                                                                                 ---------         -----------
              Total current assets                                                              49,133,591          47,440,539

Property, plant and equipment                                                                   32,504,964          31,410,837
Less: Accumulated depreciation                                                                 (12,140,352)        (11,423,572)
                                                                                               ------------        ------------
                                                                                                20,364,612          19,987,265

Intangible assets (net)                                                                         22,349,247          20,045,983
Deferred charges (net)                                                                           1,093,750           1,448,199
Other assets                                                                                       300,879             261,735
                                                                                              ------------        ------------
                                                                                                93,242,079          89,183,721
                                                                                              ============        ============




</TABLE>

                                       3
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                      UNAUDITED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>



                    LIABILITIES AND STOCKHOLDERS' INVESTMENT
                                                                                             September 30,             June 30,
                                                                                                      1998                 1998
                                                                                                         $                    $
                                                                                             -------------             --------

<S>                                                                                              <C>                  <C>      
Current liabilities
     Bank overdraft payable                                                                      3,753,335            2,787,965
     Current portion of long term debt                                                           1,869,711            2,256,275
     Trade accounts payable                                                                     11,783,195            9,205,092
     Other provisions and accruals                                                              10,898,398            4,506,770
     Dividend payable                                                                              567,726              558,185
     Other taxes payable                                                                           294,877            1,064,432
     Income tax payable                                                                          2,373,183            1,790,874
                                                                                                ----------            ---------
              Total current liabilities                                                         31,540,425           22,169,593

Long term debt                                                                                  26,396,922           28,945,426
Deferred income taxes                                                                              550,113              529,405
                                                                                              ------------         ------------
                                                                                                58,487,460           51,644,424
                                                                                                ----------           ----------
Stockholders' investment

Capital stock:

     A class  common  stock,  $0.01 par value -  authorized  23,000,000  shares, issued
     and outstanding  6,019,708 shares (June 1998: 5,649,224 shares)                                60,198               56,492

     B class common stock, $0.01 par value - authorized 2,000,000 shares, issued
     and outstanding 1,822,500 shares                                                               18,223               18,223

     FSAH B Class common stock                                                                         580                  539

     Preferred stock, $0.01 par value, - authorized 5,000,000 shares, issued and
     outstanding nil shares                                                                              -                    -

     Capital in excess of par                                                                   29,893,370           28,288,404
Retained earnings                                                                                1,460,013            7,209,977
                                                                                                 ---------          -----------
                                                                                                31,432,384           35,573,635

                                       4
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                      UNAUDITED CONSOLIDATED BALANCE SHEETS

Minority stockholders' investment                                                               20,074,454           19,677,124
                                                                                                ----------           ----------
                                                                                                51,506,838           55,250,759
                                                                                                ----------           ----------

Foreign currency translation adjustments                                                       (16,752,219)         (17,711,462)
                                                                                              ------------         ------------
                                                                                                34,754,619           37,539,297
                                                                                                ----------           ----------
                                                                                                93,242,079           89,183,721
                                                                                                ==========           ==========
</TABLE>

                                       5

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                        CONSOLIDATED STATEMENTS OF INCOME
               

<TABLE>
<CAPTION>
                                                                                                     1998                1997
                                                                                                        $                   $
                                                                                               ----------          ----------

<S>                                                                                            <C>                 <C>       
Revenues                                                                                       25,264,876          21,461,433
                                                                                               ==========          ==========
Operating expenses
     Cost of sales                                                                             16,359,871          12,698,212
     Selling, general and administrative costs                                                  8,570,237           7,316,524
     Extraordinary share repurchase charge                                                      4,633,825                   -
     Retrenchment cost provision                                                                  500,000                   -
                                                                                              -----------         -----------
                                                                                               30,063,933          20,014,736
                                                                                               ----------          ----------
Operating (loss)/ income                                                                       (4,799,057)          1,446,697
Other income                                                                                       87,209             243,082
Interest income/( expense)                                                                       (106,536)            175,741
                                                                                                 ---------         ----------
(Loss)/income from consolidated companies before income taxes                                  (4,818,384)          1,865,520
Provision for taxes on income                                                                    (520,169)           (446,193)
                                                                                              ------------         -----------
                                                                                               (5,338,553)          1,419,327
Minority interest in consolidated subsidiary companies                                           (411,411)           (430,701)
                                                                                              ------------         -----------
Net income                                                                                     (5,749,964)            988,626
                                                                                              ============         ===========
                                                                                              
Basic earnings per share                                                                            (0,76)               0,18

Fully diluted earnings per share                                                                    (0,53)               0,15
Weighted average number of shares outstanding
     Basic earnings per share                                                                   7,584,325           5,383,492

     Fully diluted earnings per share                                                          10,219,226           8,154,164

</TABLE>

                                       6
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
               THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997


<TABLE>
<CAPTION>
                                                                                                     1998               1997
                                                                                                        $                  $
                                                                                                    -----               ----


<S>                                                                                          <C>                   <C>    
Cash flows from operating activities:
     Net income                                                                                (5,749,964)           988,626
     Adjustments to reconcile net income to net cash provided by operating
     activities:
              Depreciation and amortization                                                       877,453            594,612
              Deferred income taxes                                                                11,108           (111,706)
              Net loss on sale of assets                                                                -             20,162
              Net loss on sale of subsidiary                                                       15,408                  -
              Net loss on redemption of Debenture funding                                          94,259                  -
              Effect of changes in current assets and current liabilities                        (934,922)        (1,665,749)
              Effect of extraordinary provisions raised                                         5,133,825                  -
              Net gain on First SA Food shares purchased from minorities                          (11,743)                 -
              Minority interest in consolidated subsidiary companies                              411,411            430,701
                                                                                                  -------        -----------
Net cash (utilised)/provided by operating activities                                             (153,165)           256,646
                                                                                                 ---------       -----------
Cash flows from investing activities:

     Additions to property, plant and equipment                                                (1,275,699)          (681,483)
     Proceeds on disposal of property, plant and equipment                                        653,627             18,083
     Additional purchase price payments                                                        (2,085,313)        (2,886,407)
     Other assets acquired                                                                        (40,106)          (147,487)
     Acquisitions of subsidiaries (net of cash of $33,856)                                              -         (2,238,196)
     Proceeds on disposal of subsidiary (net of cash of $9,633)                                    49,191                  -  
Net cash used in investing activities                                                          (2,698,300)        (5,935,490)
                                                                                               -----------        -----------
Cash flows from financing activities:

     Net (repayments)/borrowings in bank overdrafts                                               874,368            (10,217)
     Borrowings of long term debt                                                                 825,654            308,179
     Redemption of debenture debt                                                              (2,733,810)                 -
     Reduction in deferred debt issue costs                                                             -             46,000
     Repayments in short term debt                                                               (405,053)          (165,041)
     Proceeds on stock issues                                                                   1,033,613          1,770,130
                                                                                                ---------          ---------
Net cash used in/(provided in) financing activities                                              (405,228)         1,949,051

                                                                                                ----------         ---------
                                       7
<PAGE>
                         FIRST SOUTH AFRICA CORP., LTD.

               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
               THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

Effect of exchange rate changes on cash                                                           182,513           (449,537)
Cash utilised by operations                                                                    (3,074,180)        (4,179,330)
Cash on hand at beginning of period                                                            17,948,991         19,889,111
                                                                                               ----------         ----------
Cash on hand at end of period                                                                  14,874,811         15,709,781
                                                                                               ==========         ==========


</TABLE>


                                       8
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

     UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' INVESTMENT

<TABLE>
<CAPTION>




                                      First South   First South  First South
                                      Africa Corp., Africa Corp.,    African
                                              Ltd.          Ltd.    Holdings                                   Foreign
                                          A class       B class      B Class    Capital in                    currency
                                           common        common       common     excess of     Retained    translation
                                            stock         stock        stock           par     earnings    adjustments    Total
                                                 $            $            $             $            $              $        $
                                      ------------  -----------   ----------    ----------     --------    -----------    --------

<S>                                  <C>           <C>             <C>       <C>           <C>          <C>          <C>       
Balance at 30 June 1998                    56,492        18,223          539    28,288,404    7,209,977    (17,711,462) 17,862,173
Issuance of stock to FSAC escrow agent      2,434             -            -        (2,434)           -              -           -
Conversion of debentures                    1,272                                  573,828                                 575,100
Issuance of stock on additional
     purchase price payments                    -             -           41     1,033,572            -              -   1,033,613
Net income                                      -             -            -             -   (5,749,964)             -  (5,749,964)
Translation adjustment                          -             -            -             -           -         959,243     959,243
                                      -----------    ----------      -------    ----------    ---------    ------------ ----------
Balance at 30 September 1998               60,198        18,223          580    29,893,370    1,460,013    (16,752,219) 14,680,165
                                      ===========    ==========      =======    ==========    =========    ============ ==========


</TABLE>

                                       9
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997


1.   ORGANISATION AND PRINCIPAL ACTIVITIES OF THE GROUP

     First South Africa Corp.,  Ltd. (the "Company") was founded on September 6,
     1995.  The purpose of the Company is to acquire and operate  South  African
     companies.

     The principal activities of the group include the following:

     Food interests
     The  manufacture,  sale and distribution of both ready to eat and ready for
     bake  off  pastry  related  food  products,   the  manufacture,   sale  and
     distribution  of high  margin  speciality  breads  and staple  breads,  the
     manufacture  and sale of a wide range of  prepared  food  products  and the
     manufacture,  sale  and  distribution  of a wide  range of  processed  meat
     products.

     Lifestyle interests
     The manufacture, sale and distribution of plastic, wooden and steel outdoor
     products aimed at the leisure market.

     Packaging interests
     The business of manufacturing,  servicing and selling  packaging  machines,
     receiving commission income and receiving rental income.

     Industrial interests
     Manufacture of washers for use in the fastener industry and the manufacture
     and supply of air-conditioning and refrigeration products.


2.   ACQUISITIONS AND DISPOSALS

     The Company  disposed of its 70%  shareholding  in Humidair (Pty) Ltd for a
     consideration of $58,824, realizing a loss on disposal of $15,409.

     The Company is required to make  additional  payments to the former  owners
     based on a multiple of pre tax earnings.  These  payments are to be made by
     the issue of stock and cash over the next three years.

     Additional  purchase  price  payments  made during the  current  year total
     $2,085,312. This amount was allocated as follows:


Goodwill                                                             361,052
Recipes                                                            1,129,745
Trademarks                                                           594,515
                                                                   ---------
                                                                   2,085,312
                                                                   =========
                                       10

<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997


     These additional purchase price payments were made as follows:


Cash                                                              1,051,699
Shares issued in lieu of cash                                     1,033,613
                                                                  ---------
                                                                  2,085,312
                                                                  =========


3.   SUMMARY OF ACCOUNTING POLICIES

     The consolidated financial statements have been prepared in accordance with
     U.S. generally accepted accounting principles and incorporate the following
     significant accounting policies:

     Consolidation
     First  South  Africa  Corp.,   Ltd.,   consolidates   its  majority   owned
     subsidiaries. The consolidated financial statements include the accounts of
     the Company, First South Africa Corp., Ltd. and its subsidiaries.  Minority
     interests have been taken into account when  determining the net income due
     to the Company.  Material intercompany transactions have been eliminated on
     consolidation.

     Accounting estimates
     Preparation of financial  statements in conformity with generally  accepted
     accounting principles requires management to make estimates and assumptions
     that affect the reported  amounts of assets and  liabilities at the date of
     the  financial  statements,  disclosure of  contingent  liabilities  at the
     financial  statement  date and  reported  amounts of revenue  and  expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Earnings per share
     Earnings  per share on common  shares is based on net income  and  reflects
     dilutive effects of any stock options and warrants which exist at year end.

     Intangible assets
     Goodwill, recipes and other intellectual property, and trademarks are being
     amortized  on a straight  line basis over a period of twenty to twenty five
     years. If facts and circumstances were to indicate that the carrying amount
     of  goodwill,  recipes and other  intellectual  property is  impaired,  the
     carrying amount would be reduced to an amount  representing  the discounted
     future cash flows to be generated by the operation.

     Also included in intangible assets are non competition  agreements relating
     to the Europair  acquisition  which are being  amortized on a straight line
     basis over the six year term of the agreements.

     The Company has adopted Statement of Financial Accounting Standards No. 121
     ("SFAS 121")  "Accounting  for the impairment of Long-Lived  Assets and for
     Long-Lived  Assets to be Disposed Of". No impairments in long-lived  assets
     has taken place.

                                       11
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997



     Foreign currency translation
     The  functional  currency  of the  underlying  companies  is that of  South
     African Rands. Accordingly,  the following rates of exchange have been used
     for translation purposes:

     o        Assets and  liabilities  are translated into United States Dollars
              using the exchange rates at the balance sheet date.

     o        Common  stock and  capital  in excess of par are  translated  into
              United States Dollars using historical rates at date of issuance.

     o        Revenue,  expenses,  gains and losses are  translated  into United
              States Dollars using the weighted  average exchange rates for each
              year.

     The  resultant  translation  adjustments  are reported in the  component of
     stockholders'   investment  designated  as  "Foreign  currency  translation
     adjustment".

     Foreign assets and liabilities     
     Transactions in foreign currencies arise as a result of inventory purchases
     from foreign countries and intercompany  funding  transactions  between the
     subsidiaries  and First South Africa Corp.,  Ltd.  Transactions  in foreign
     currencies  are  accounted  for at the rates ruling on  transaction  dates.
     Exchange  gains and losses are charged to the income  statement  during the
     period in which they are incurred.  Foreign  assets and  liabilities of the
     group which are not denominated in United States Dollars are converted into
     United States  Dollars at the exchange  rates ruling at the financial  year
     end or at the rates of forward cover purchased.  Forward cover is purchased
     to hedge the currency exposure on foreign liabilities.

     Inventories
     Inventories are valued at the lower of cost and net realizable value, using
     both the first-in, first-out and the weighted average methods. The value of
     work-in-progress  and finished  goods  includes an  appropriate  portion of
     manufacturing overheads. A valuation reserve has been established to reduce
     the values of certain identified inventories  (determined to be obsolete or
     otherwise  impaired) to their  estimated net  realizable  values (market or
     selling price less costs to dispose).

     Property, plant and equipment
     Land is stated at cost and is not depreciated. Buildings are depreciated on
     the straight line basis over estimated useful lives of 20 years.

     Plant  and  equipment,  and  motor  vehicles  are  written  off over  their
     estimated useful lives of 5 to 10 years.

     Income taxes
     Income tax  expense is based on  reported  earnings  before  income  taxes.
     Deferred income taxes represent the impact of temporary differences between
     the amounts of assets and  liabilities  recognised for financial  reporting
     purposes and such amounts  recognised for tax purposes.  Deferred taxes are
     measured by applying currently enacted tax laws.

                                       12
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997


     Fair value of financial instruments
   
     As at  September  30,  1998  the  carrying  value of  accounts  receivable,
     accounts payable and investments approximate their fair value. The carrying
     value of long term debt  approximates  fair value, as the debt,  other than
     convertible debentures, interest rates are keyed to the prime lending rate.
     The convertible debentures are believed to approximate fair market.

     Revenues
     Revenues  comprise net invoiced  sales of washers,  manufactured  packaging
     machines,  spares and service charges,  food products,  lifestyle products,
     air conditioning systems, fans and related accessories,  and rental income.
     Combined revenues exclude sales to group companies.

     Revenues  are  stated net of  allowances  granted  to  customers  and trade
     discounts. Returns of defective product are offset against revenues. Due to
     the low incidence of warranty  returns,  where  warranties  are provided to
     customers,  the  warranty  costs are  charged  to cost of sales as and when
     incurred.

     Gain on disposal of subsidiary stock
     Subsidiary  stock  disposed of during the period is recognized as a gain in
     the  statement of income and is  separately  disclosed  as a  non-operating
     gain.


4.   INVENTORIES

     Inventories consist of the following:


                                          September 30,             June 30,
                                                   1998                 1998
                                                      $                    $
                                          -------------            ---------

Finished goods                                8,091,793            7,156,784
Work in progress                                881,448              649,465
Raw materials and ingredients                 3,421,609            3,220,748
Supplies                                        937,932              959,396
                                             ----------           ----------
Inventories (Gross)                          13,332,782           11,986,393
Less:   Valuation allowances                   (279,306)            (243,780)
                                            ------------        ------------
Inventories (Net)                            13,053,476           11,742,613
                                             ==========           ==========


                                       13
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997



5.   EXTRAORDINARY SHARE REPURCHASE CHARGE

     In terms of agreements reached with the previous vendors of Piemans Pantry,
     Seemann's Quality Meat Products,  Gull Foods and Fifers Bakery, the Company
     warranted  the First South Africa Corp share price at  September  30, 1998.
     The  charge  of  $4,633,825  represents  the  aggregate  shortfall  on  the
     warranted  share price at the  prevailing  exchange  rate at September  30,
     1998.  In terms of the  agreements  entered with the previous  vendors they
     have  exercised  a put option on the  Company,  which will  result in their
     shares being repurchased and cancelled in the second quarter of the current
     financial year.


6.   RETRENCHMENT COST PROVISION

     A  retrenchment  cost  provision  of $500,000  has been raised to take into
     account  the  future  costs  expected  in the  manpower  reductions  in the
     packaging segment which is currently undergoing extensive reorganization.


7.   EARNINGS PER SHARE

     Earnings per share data is calculated as follows:

<TABLE>
<CAPTION>



<S>                                                               <C>                 <C>                   <C>        
Basic earnings per share for the quarter (1998)
Net income available to common stockholders                                                                     (5,749,964)
                                                                                                                ===========
                                                                            Shares         Fraction of            weighted
Dates outstanding                                                      outstanding              period      average shares
                                                                       -----------         -----------      --------------
Balance at July 1, 1998                                                  7,472,324                 1,0           7,472,324
Additional purchase price consideration shares issued                      242,684                 0,1               2,638
Debentures converted to shares during the quarter                          122,700                 0,9             109,363
                                                                        ----------                              ----------
Weighted average shares                                                  7,837,708                               7,584,325
                                                                         ---------                               ---------



Basic earnings per share for the quarter (1997)

Net income available to common stockholders                                                                        988,626
                                                                                                                   =======
                                       14
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

                                                                            Shares         Fraction of            weighted
Dates outstanding                                                      outstanding              period      average shares
                                                                       -----------         -----------      --------------
Balance at July 1, 1997                                                  5,359,614                 1,0           5,359,614
Additional purchase consideration shares issued                             57,127                 0,0                 157
Acquisition of subsidiaries on January 1, 1997                              27,624                 0,0                  76
Warrants converted to shares during the quarter                            159,425                 0,2              23,645
                                                                        ----------                              ----------
Weighted average shares                                                  5,603,790                               5,383,492
                                                                         ---------



</TABLE>

Diluted earnings per share for the quarter (1998)

Net income available to common stockholders                          (5,749,964)
Add impact of assumed conversions                                       336,863
                                                                     ----------
Adjusted net income available to common stockholders                 (5,413,101)
                                                                     -----------
Weighted average shares                                               7,584,325
Warrants and options not yet exercised                                        -
9% convertible debentures                                             1,055,954
Increasing rate debentures                                            1,578,947
                                                                      ---------
Adjusted weighted average shares                                     10,219,226
                                                                     ----------



Diluted earnings per share for the quarter (1997)

Net income available to common stockholders                             988,626
Add impact of assumed conversions                                       254,393
                                                                        -------
Adjusted net income available to common stockholders                  1,243,019
                                                                      =========
Weighted average shares                                               5,383,492
Warrants and options not yet exercised                                1,104,005
9% Convertible Debentures                                             1,666,667
                                                                      ---------
Adjusted weighted average shares                                      8,154,164
                                                                      ---------

                                       15
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
           MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
             FOR THE THREE MONTHS ENDED SEPTEMBER 31, 1998 AND 1997



BACKGROUND AND HISTORY

The Company was  incorporated  in September  1995 with the intention of actively
pursuing  acquisitions  fitting a  pre-defined  investment  strategy.  The broad
strategy followed in all investment decisions is as follows:

o    Turnover is to be within the range of $5 - $50 million

o    Net income must yield a sustainable above average return on investment.

o    Growth  in  turnover  must be  above  average  growth  rates  and  must  be
     sustainable over the medium term.

o    The  industry  in which  the  target  operates  must  meet the  pre-defined
     industry  sectors  identified by  management  as sectors  meeting our broad
     investment strategy.

First South Africa Corp has, through its South African  subsidiary,  First South
African  Holdings (Pty) Ltd.,  acquired  seventeeen  South African  subsidiaries
which have met the acquisition criteria identified above.

These  acquisitions  (following  certain  mergers  of a number  of the  acquired
subsidiaries)  are  listed  below  and are  engaged  in the  following  industry
segments:

     Processed Foods

     o   Piemans Pantry
     o   Astoria Bakery
     o   Seemann's Quality Meat Products
     o   Gull Foods
     o   Fifers Bakery


     Lifestyle Products

     o   SA Leisure
     o   Galactex
     o   Republic Umbrella
     o   Tradewinds


     Packaging Equipment and Materials

     o   Starpak

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<PAGE>

     o   Pakmatic
     o   Pacforce


     Industrial Manufacturing

     o   L.S. Pressings

         Involved in  the manufacture of  metal  washers  used  in  the fastener
         industry

     o   Europair

        Involved in the manufacture and  distribution  of air  conditioning  and
        refrigeration components.


FINANCING


o     Stockholders' funding

     The Company has funded  itself  primarily  through  stockholders  loans and
     capital contributions.

     Additional  funds were  raised from the  proceeds  of the  Initial  Public
     Offering (IPO) completed in January 1996.

o    Bridging Finance

     Bridging finance was raised to finance acquisitions made prior to the IPO.

o     Debentures

     The Company has issued two tranches of subordinated  convertible debentures
     to raise funds for further acquisitions.

The Company  anticipates that it will derive dividend income  primarily  through
income generated from the operations of acquired companies in South Africa.


SOUTH AFRICAN OPERATIONS

As the  Company's  results  are  reported  in U.S.  Dollars,  but  revenues  are
primarily  generated in South African Rand, the South African inflation rate and
the  depreciation of the South African Rand against the U.S Dollar are important
to the understanding of the Company's results.

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<PAGE>


In broad  terms,  if the  deterioration  of the rand is in  excess  of the South
African  inflation  rate,  then the Company would need to generate South African
revenue in excess of the South African inflation rate to maintain Dollar parity.

The average  rate for the South  African  Rand  against the U.S.  Dollar for the
periods presented in this report are as follows:


                                          Three Months          Three Months
                                                 ended                 ended
                                         September 30,         September 30,
                                                  1998                  1997
                                         -------------         -------------

Rate of exchange vs $1                            6.14                  4.66
Depreciation                                        32%

The annual rate of inflation for South Africa was  approximately  8% as reported
by the South African Central Statistical services.


The result  reflected below is therefore  greater than inflation  adjusted South
African Rand for both revenue and earnings growth.

COMPARISON TO PRIOR PERIODS

o    THREE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS SEPTEMBER 30, 1997


     SALES

        Sales have increased by 18 % to $25,264,876 from $21,461,433.

        This is better  interpreted as a net, after inflation  increase in South
African Rand of 46%.

        This increase is primarily attributable to acquisitions that the Company
had completed since October 1, 1997.

        The results for the three months ended September 30, 1997 do not include
the following operations:

        o       Galactex
        o       SA Leisure
        o       Republic Umbrella
        o       Tradewinds Parasol
        o       Pacforce

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<PAGE>


        The sales from these  companies for the three months ended September 30,
1998 total $7,902,304

        The contribution by the individual business segments towards total sales
        for the three months ended September 30, is as follows:


                                                   1998                  1997
                                                      %                     %
                                                   ----                  ----

Processed Foods                                    50.1                  67.0
Lifestyle Products                                 26.2                     -
Packaging equipment and materials                   9.6                  11.1
Industrial Manufacturing                           14.1                  21.9
                                                  100.0                 100.0

        The Rand value of sales in each business segment have increased over the
        prior period,  however due to the  deterioration in the Rand against the
        Dollar the Dollar sales value in the  Industrial  Manufacturing  segment
        has  decreased  over prior  year.  The  overall  Rand  increase  can be
        explained by:

        o      Additional acquisitions in the Packaging equipment and  materials
               and by the addition of the Lifestyle products business segment.

        o      Increase in demand for the Company's products as the middle class
               base of consumers  continues to grow as South Africa's transition
               to more broad based economic participation moves forward.

        o      Additional  capital   expenditure  on  increasing   manufacturing
               capacity  has been made to exploit the  additional  demand  being
               experienced.

        o      The decrease in Dollar sales in the Industrial  segment is due to
               management's  change of focus away from this sector  which is not
               regarded  as  core  business,   as  well  as  difficult   trading
               conditions  experienced  due to the high relative  interest rates
               and the difficult economic environment prevalent in South Africa.

     COST OF SALES

     Cost of  goods  sold of  $16,359,871,  (representing  64.8% of  sales)  has
     increased  from   $12,698,212   (representing   59.2%  of  sales)  for  the
     comparative period in the prior year.


     The cost of goods sold by the individual  business segments as a percentage
     of sales for the three months ended  September 30, is as follows:

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<PAGE>
    


                                                    1998                  1997
                                                       %                     %
                                                    ----                  ----

Processed Foods                                     56.2                  56.5
Lifestyle Products                                  73.0                     -
Packaging equipment and materials                   81.1                  78.0
Industrial Manufacturing                            68.7                  67.5

     The  overall  increase  in the  percentage  of cost of  goods  sold  can be
     explained by the relative  value of the cost of goods sold in the Lifestyle
     sector,  which was not in existence in the prior year. The segment analysis
     is presented below.

     o  Processed Foods

        The cost of goods sold in this segment has not changed significantly.

     o  Packaging equipment and materials

        The  acquisition  of a Company that  generates  lower gross margins than
        those owned by the Company in the prior period and the difficult trading
        conditions experienced during the 1998 quarter.

     o  Lifestyle Products

        This  segments'  margins  are low due to the competitive  nature  of the
        products necessitating reasonably low margins overall.


     SELLING, GENERAL AND ADMINISTRATIVE COSTS

     Selling,  General and  Administrative  costs of $16,359,871,  (representing
     33.9 % of sales)  has  increased  from  $7,316,524  (representing  34.1% of
     sales) for the comparative period in the prior year.

     Included in Selling,  General and  Administrative  costs  are the following
     non-cash charges:


                                                   1998                  1997
                                                   ----                  ----

Depreciation                                    586,804               357,338
Amortisation of intangibles and other assets    290,649               237,274
                                                -------               -------
                                                877,435               594,612
                                                -------               -------
Percentage of total sales                           3.5                   2.8
       

Intangibles  are principally  goodwill,  trademarks,  intellectual  property and
restraint of trade agreements.


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<PAGE>


                  


        The selling, general and administrative costs of the individual business
        segments as a percentage  of sales for the three months ended  September
        30, is as follows:


                                                     1998                  1997
                                                        %                     %
                                                     ----                  ----

Processed Foods                                      35.8                  33.7
Lifestyle Products                                   21.0                     -
Packaging equipment and materials                    28.6                  33.4
Industrial Manufacturing                             27.4                  28.6
Corporate (Percentage of total sales)                 0.9                   2.2

        The  overall  decrease  in  the  percentage  of  selling,   general  and
        administrative costs can be explained by the following:


        o      Packaging equipment and materials and Industrial manufacturing

               Lower  operating  costs  due to  more  efficient  operations  and
               restructuring within this sector.

        o      Lifestyle Products

               Low selling,  general and  administrative  costs in the Lifestyle
               sector as compared to the other business  segment has resulted in
               an overall  decrease in the Company's total Selling,  General and
               Administrative costs as a percentage of sales.


     INTEREST EXPENSE

     Interest  expense of $106,536 has decreased  from an income of $175,741 for
     the comparative period in the prior year.

     Interest for the quarter ended September 30, 1998 consists of:

     o  Interest  income  earned on First South Africa  Corp's cash balances and
        surplus funds in the processed foods business.

     o  Interest expense incurred in the other operating  business  segments and
        interest expense of  approximately  $330,000 on the 9% and floating rate
        convertible  debenture  issuances  that were  completed  in  August  and
        October 1997.



     OTHER INCOME

     Other income of $87,209 has  decreased  from  $243,082 for the  comparative
     period in the prior year.

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<PAGE>

     Other income consists primarily of rebates, discounts received, commissions
     and government incentives earned by the operating subsidiaries.

     The  decrease  is  attributable  to a  decrease  in  government  incentives
     received.


     NET INCOME

     Net loss from consolidated subsidiaries of $5,338,553 has decreased from an
     income of $1,419,327, a significant decrease over the comparative period in
     the prior year.

     Included in the loss for the current  quarter is a provision of  $4,633,825
     for  share  repurchase  charges  in terms of  agreements  reached  with the
     previous  vendors  of several of the food  segment  businesses  in terms of
     which the price at which First South Africa Corp.,  Ltd shares were held in
     escrow on their behalf was warranted at a certain level. These vendors have
     exercised a put option on the  Company,  requiring  the  repurchase  of the
     escrow shares resulting in the extraordinary charge.

     A provision of $500,000 has also been raised for future  retrenchment costs
     in the packaging  segment as the Company  proceeds with the  restructure of
     the businesses in this segment.

     Net loss of  $5,749,964  represents  a loss of $0.76 a share as compared to
     net  income of  $988,626  representing  $0.18 per share in the  comparative
     period in the prior year. After factoring out the extraordinary provisions,
     the loss per share for the  current  quarter  equates  to $0.08 per share.

     The reason for the loss is due to the poor performance of the packaging and
     industrial manufacturing segments.

     The  current  market  value  of the  Company's  65%  stake in First SA Food
     Holdings  Limited is  approximately  $39  million.  The Company  intends to
     continue to spin off minority interests in the subsidiary groups which will
     result  in the  provision  for  minority  interests  increasing  in  future
     periods. This will continue to effect comparative  earnings per share data.
     Currently  the Company owns an effective  84.3%  interest in the  lifestyle
     segment.

     For purposes of the Company's  earnings per share  calculation  the Company
     had a weighted average 7,584,325 shares outstanding as opposed to 5,495,119
     for the comparative period in the prior year.

     The shares in issue includes an additional  1,173,476  shares issued on the
     conversion  of  certain  Class A warrants  and  Class B warrants that  were
     outstanding in terms of a warrant swap exercise performed during the  prior
     fiscal year. This has had a negative impact on the basic earnings per share
     calculation.


FINANCING

o     Internally Generated funding

     As of September  30,  1998,  the Company had net cash of  $14,874,811  with
     working capital of $17,593,166. As of September 30, 1998, the Company had a
     total of $26,396,922 in debt, of which

                                       22

<PAGE>

     amount  $20,656  million  related to the Company's 9% and  increasing  rate
     subordinated  convertible debentures with the remainder being bank debt. Of
     the bank debt, $1,869,711 was classified as current.

     Cash flows utilized by operating  activities for the period ended September
     30,1998 totaled $153,165.  Cash flows used in investing  activities totaled
     $2,698,300 of which the Company  realized $49,191 on the disposal of one of
     its non-core operating  subsidiaries.  The Company  expended  $2,085,313 on
     additional  purchase price payments and purchased $622,072 in net additions
     to property, plant and equipment of its subsidiaries.  Net cash utilized in
     financing activities amounted to $405,228.  This included the redemption of
     debentures amounting to $2,733,810.
                  

o     Future commitments

     Under the various acquisition agreements, the Company anticipates having to
     spend approximately $4.62 million in cash for its purchase price warrantees
     issued to the previous  vendors of Piemans Pantry,  Seemann's  Quality Meat
     Products,  Fifers  Bakery and Astoria  Bakery.  The Company has  contingent
     payments over the next 12 months amounting to approximately $3,212,536. The
     Company  anticipates  that  this  cash and  operating  cash  flows  will be
     sufficient  to  fully  fund  these  payments  as well as fund  the  capital
     expenditures for its various operations.  Excess cash will also be utilized
     to fund additional  acquisitions.  The Company  anticipates that any longer
     term contingent  acquisition  payments will be funded out of operating cash
     flows of the acquired entities.

     The Company's  operating  subsidiaries  generally collect their receivables
     within 65 - 90 days and reserve  approximately  5% for  doubtful  accounts.
     Historically,  the companies'  operating and capital needs have been met by
     internal cash flow and outside bank borrowing.  It is  management's  belief
     that capital expenditures for the foreseeable future can continue to be met
     by  internal  cash  flow  and  bank  borrowing.   The  Company's  operating
     subsidiaries engage in certain hedging transactions with respect to certain
     overseas purchases in order to lock in a specified exchange rate.

     The  Company  intends  to  continue  to  pursue an  aggressive  acquisition
     strategy in South Africa and anticipates utilizing a substantial portion of
     its cash  balances  and  operating  earnings  to fund this  strategy to the
     extent that suitable acquisition candidates can be identified.

     The  Company may be required  to incur  additional  indebtedness  or equity
     financing in  connection  with future  acquisitions.  There is no assurance
     that the Company  will be able to incur  additional  indebtedness  or raise
     additional  equity to finance future  acquisitions  on terms  acceptable to
     management, if at all.


YEAR 2000 COMPLIANCE

     o          State of Readiness

               Due to the nature and type of the Company's  operations,  none of
               the  operating  entities  have  very  sophisticated   Information
               Technology  ("IT")  and  non  IT  systems.  The  majority  of the
               Management  information  systems  within the group are  purchased
               software packages.

                                       23
<PAGE>


               Operating management in each operating entity has evaluated or is
               currently  evaluating  the Year 2000  readiness of the management
               information  systems and software upgrades have been purchased or
               which  ordered  to  ensure  that  the  Cmpany  will be Year  2000
               compliant from an information management perspective.

               The extent of usage of non IT systems within the group is limited
               to a small  number of systems,  which are in the process of being
               tested to ensure year 2000 compliance.  These processes,  however
               are  not  of  the  nature  that  would  materially   disrupt  the
               functioning of the Company should any particular process fail.

               While evaluating the management  Information  Systems, a thorough
               check of all  hardware  within the Company is being  carried out,
               where  necessary  changes and  upgrades  are being made to ensure
               that the Company is year 2000  compliant.  These  changes are not
               expected to be material and the costs have already being provided
               for where the amounts are considered to be significant.


     o          Costs to address year 2000 issues

               Based on the  assessments  already carried out by the Company and
               the  ongoing  assessments  being  performed,  the costs that have
               materialized   to  date  and  the  costs  that  are  expected  to
               materialize  are not  material to the Company or each  individual
               entity as a whole.  However,  there can be no guarantee  that the
               costs involved will not be material should a significant  problem
               be subsequently discovered.

               The costs  incurred to date have  typically been to replace aging
               hardware,  which has not  amounted to  material  amounts and were
               already provided for in general capital expenditure  budgets, and
               to upgrade the existing purchased software, in each case upgrades
               are available  from the software  suppliers who certify year 2000
               compliance.  The costs incurred on the software upgrades have not
               being material to date.

        o       Risk associated with Year 2000 issues

               Based on  risk  assessments  already  carried out and assessments
               which are due to take place,  the  Company  feels that due to the
               level of IT  sophistication  within the Company  that the risk of
               ceasing production and distribution completely is minimal.

               The  Company is able to support a manual  record  keeping  system
               temporarily should there be a total IT system failure.

               In  management's  opinion,  the  significant  risks that face the
               Company are the states of readiness of the utility suppliers, the
               Company's major suppliers, customers and bankers.

               Steps have been taken to ensure that these  suppliers,  customers
               and bankers  have  confirmed  there state of  readiness to us and
               what steps are being  taken by them to ensure that they are fully
               year 2000 compliant.


                                    24
<PAGE>


               The possible impact on the Company from this risk is  significant
               and all  steps  are  being  taken to  ensure  that  this  risk is
               adequately addressed.

     o          Continency plans

               The Company is  developing a  contingency  plan which will ensure
               that the  production  and  distribution  and the recording of all
               transactions  will  be  adequately  covered  should  there  be  a
               significant   problem.   However,  the  Company  can  provide  no
               assurance that its plans will be sufficient to prevent disruption
               and the  likely  impact  that this may have on the  Company  as a
               whole.

               Where   possible,   alternative   sources  of  supply  have  been
               identified,  should there be a significant disruption from one of
               our suppliers.  However,  because there are significant suppliers
               of the  Company  which are sole  suppliers,  the  Company  may be
               unable to cover this risk sufficiently and, therefore the Company
               is  attempting  to the best of our ability to assess the state of
               readiness of these suppliers.




QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     
    o          The Company has used derivative financial  instruments  primarily
               to reduce exposure to adverse  fluctuations  in foreign  exchange
               rates with respect to certain overseas purchases in order to lock
               in a specified  exchange  rate.  The Company  does not enter into
               derivative  financial  instruments  for  trading  purposes.  As a
               matter of policy all derivative positions are used to reduce risk
               by hedging  underlying  economic  exposure.  The  derivatives the
               Company  has used in the past were  straight-forward  instruments
               with liquid markets.



PART II.       OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K

        (a)    Exhibits - 27.1 Financial Data Schedule.

        (b) Reports on Form 8-K - None.



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                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Dated:         November 13, 1998

FIRST SOUTH AFRICA CORP., LTD.


By:     /s/    Clive Kabatznik 
        ----------------------------------  
        Clive Kabatznik
        Chief Executive Officer, President