The specialised transport and logistics service provider's interim results for the period up to end August 2008 show a decrease in Headline Earnings per Share (HEPS) of over 10%, primarily due to significant increases in finance and fuel costs.
Earnings per share, by contrast, have risen by over 35% over the previous year, largely due to the income inclusion and asset impairment charge of just over R5m incurred by the company's Zimbabwe operations last year.
The finance and cost increases, which have affected the HEPS figures in the reporting period, are due to a combination of factors: increased interest rates, increased fuel costs, and ongoing reinvestment in fleet and production capacity on contracts have all had a cumulative effect.
The company's operations have shown contrasting fortunes. The industrial sector, which forms the bulk of the company's contract work, has shown continued encouraging growth in the steel and bulk powders operations, with chemical haulage work also increasing. In the more variable and higher-risk
agricultural sector, unforeseen interruptions in mill production and some industrial relations challenges have added to ongoing fluctuations in weather patterns. The latter has also resulted in a reduction in the quality of sugar cane crops, thus reducing payloads.
”We have been challenged in this reporting period,' says joint CEO Murray Bolton.”Prospects, however, remain stable to positive. The global financial crisis has led to a slowing in demand for commodities, but SA has been sheltered from this and demand for infrastructure remains high and means a positive outlook for our industrial sector operations”.
He went on to add that he believes the agricultural sector will pick up once production is stabilised, despite the vagaries of the weather, and the company is also expecting a correction in the fuel price. A further bonus that the fact that the company has already reduced its debt and strengthened their balance sheet with the R95m received from the sale of land reported in their last annual financial statements.
