Eqstra records marginal growth as HEPS decrease 25.4% - CNBC Africa

Eqstra records marginal growth as HEPS decrease 25.4%


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A scene at a manufacturing factory. PHOTO: Getty Images

“Earnings growth was negatively impacted by the three week nationwide SAFCEC (South African Federation of Civil Engineering Contractors) industrial action impacting the Contract Mining and Plant Rental division,” the company said in a statement.

[DATA EQS:Eqstra] is a leasing and capital equipment group that also provides services in passenger and commercial vehicle sectors, in industrial equipment, construction and in mining markets.

Headline earnings per share decreased 25.4 per cent to 34.9 cents from 46.8 cents for the six months ended 31 December 2012.

Operating profit also decreased 13.5 per cent to 461 million rand, from 533 million rand in the first half of 2013.

This was due to the impact of industrial action particularly within the contract mining and plant rental. These losses subsequently offset the increase in operating profit reported in Fleet Management and Logistics and Industrial Equipment.

Revenue however increased 14.7 per cent to 4.9 million rand, compared to 4.3 million rand in the first half of 2013.

According to Eqstra, revenue was positively impacted by growth in logistics and other value-added service in fleet management and logistics, equipment sales in industrial equipment. The weak rand also contributed to increased revenue from the company’s foreign operations.


Earnings before interest, taxation, depreciation and amortisation decreased marginally by 0.8 per cent to 1.4 million rand, despite the 135 million rand negative impact of the industrial action.

Cash flows from operating activities however increased by 36.2 per cent to 1.3 million rand from one million rand in the first half of 2013, due to an improvement in working capital.

Revenue for the country’s industrial equipment increased to 1.5 million rand for the six months ended 31December 2013 from 1.2 million rand in the comparative period in 2012. Operating profit was recoded at 145 million rand from 109 million rand in 2012.

Revenue for Eqstra’s fleet management and logistics division also increased to 1.3 million rand from 1.1 million rand in 2012. Operating profit also took a similar trend, increasing to 183 million rand from 172 million rand in 2012.

“Profit contributions from value-added products continued, in particular GPS Tracking Solutions. The leasing fleet reflected marginal growth as a result of selective capital allocation to new business to ensure measured growth,” the company explained.

Contract mining and plant rental divisional revenue increased to 2.2 million rand from two million rand in 2012, and operating profit had a similar increase from 130 million rand from 246 million rand in 2012.

“The drive to continually improve efficiencies has resulted in on-going cost reductions that will position the group for an anticipated weaker South African economy,” the company said.

“Earnings from leasing activities are set to remain defensive and higher interest rates will have a positive impact on earnings.”