Protech reports profit gain in latter part of FY - CNBC Africa

Protech reports profit gain in latter part of FY

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The group reported an increase in revenue from 530.5 million rand for the six months ended August 2012 to 651.4 million rand in for the same comparative period in 2013.

Earnings before interest, taxation, depreciation and amortisation however decreased from 72.9 million rand to 49.4 million rand.  

“Protech is pleased to report interim results for the six months ended 31 August 2013, which reflect the substantial progress that has been achieved through the strategic turnaround strategy,” the group said in a press statement.

“The progress has been made under severe trading conditions, further compounded by a delay in public sector infrastructure roll out and slow infrastructure projects investments in the mining sector.”

Protech deals in bulk earthworks, civil works and services, as well as mining services and mine infrastructure development. The group also deals with the sale and distribution of Readymix concrete.

Operating profit, or earnings before interest and tax, declined to 22 million rand from 32 million rand in the first half of the year. This was as a result of the failed takeover bid by leasing and capital equipment group Eqstra.

Protech incurred 13 million rand in costs during the Eqstra bid, which had a knock on effect on its operating profit.

The group’s construction segment contributed 84 per cent of group revenue. Of this revenue, 224 million rand came from outside of South Africa. This is an increase from 184 million rand in the first half of the year.  

“Turmoil in the South African mining sector and the global economic uncertainty have made mining companies reluctant to invest in large capital projects, particularly in South Africa. However, Protech continues to selectively examine opportunities beyond the South African borders,” the group added.

The group’s Readymix segment contributed 13 per cent of group revenue, but reported a decline as result of the competitive industry and the construction sector labour unrest. These also led to a decline in volumes.

Value add services contributed three per cent of group revenue from two per cent in the first half of the year.

“Protech continues to evaluate opportunities to expand its footprint nationally by increasing exposure in Government infrastructure. It also continues to focus on mining infrastructure and the development of its presence in other regions of South Africa that are part of its focus areas,” the group said.