Esorfranki underlines R1.6bn order book

Posted On Thursday, 27 May 2010 02:00 Published by
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Esorfranki has pointed to an approved capital expenditure of R72m for the 2011 financial year to accommodate future growth 'and to maintain its competitive edge.

Bernie KroneCivil engineering and construction group Esorfranki on Wednesday pointed to an approved capital expenditure of R72 million for the 2011 financial year to accommodate future growth 'and to maintain its competitive edge', along with an order book in hand of approximately R1.6 billion.

Esorfranki reported a 20.5% increase in full year diluted headline earnings per share to 70.5 cents from 58.5 cents previously.

After tax profit grew 37.8% to R197.6 million for the 12 months to end February 2010, from R143.4 million for the year to end February 2009.

Revenue increased 31.3% to R1.9 billion, reflecting the group's expansion from a geotechnical company to a broader civil engineering operation, including the positive contributions of the civil engineering and pipelines acquisitions in 2009.

The group declared a dividend of 15 cents per share, unchanged from previously, and equating to 4.75 times dividend cover on HEPS.

Earnings before interest, taxation, deprecation, impairments and amortisation (EBITDA) increased 19.4% to R389 million from R325.9 million.

The company said the strengthening of the South African Rand in the second half of the year negatively impacted on the translation of foreign operation income, resulting in a post tax charge of R28.9 million.

Cash generated by operations in 2010 amounted to R159.6 million, compared to R161.6 million in 2009.

Esorfranki Geotechnical, comprising Esor Africa and Franki Africa recorded a 20.6% decline in revenue to R944.8 million from R1.2 billion due to the adverse economic and trading conditions, resulting in a contracting market.

Esorfranki Civils revenue increased 17.4 % to R715 million from R609 million in 2009, while Esorfranki Pipelines posted year-on-year revenue growth of 13.6% to R229 million.

The business unit was recently awarded a R240 million contract from Rand Water for the construction of the BG3 Pipeline, it said.

Looking ahead, the company said it is on track to achieve its targets for the year ahead despite the continued tough trading conditions.

"Esorfranki will continue to focus on Africa and is expected to benefit from an established presence and operating track record in growth nodes on the continent," the company said.

In the geotechnical business unit the intention is to significantly escalate the foreign contribution to revenue from 27% to 40% to improve growth while Esorfranki Civils anticipates continued construction projects, with work phases on the Medupi Power Station expected to come back on-stream following the International Monetary Fund's loan award to Eskom.

In addition, the business unit is targeting opportunities in the mining sector, particularly in the coal and platinum arenas.

Esorfranki Pipelines is expected to benefit from increasing demand in KwaZulu-Natal, Gauteng and Mpumalanga mainly from municipalities and parastatals including Trans-Caledon Tunnel Authority.

Breaking down its order book Esorfranki said that its Geotechnical business contained orders in excess of R534 million, Esorfranki Civils was at R726 million, and Esorfranki Pipelines was at R314 million.

"Prospects for growth are sufficiently promising to support the board's optimistic outlook," it concluded.

Last modified on Thursday, 27 June 2013 17:29

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