REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED
- Slides: 53
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 ST AUGUST 2011
2012 – UP UP AND AWAY!
COMPARATIVE INTERIM REVIEW H 1 FY 2011 R’ 000 H 2 FY 2011 R’ 000 H 1 FY 2012 R’ 000 Revenue 750 798 615 635 857 524 Gross margin 147 504 13 941 79 895 38 013 (54 436) (14 415) 37, 3 m 13, 1 m 152, 3 m 5, 1% (8. 8%) (1. 7%) (10, 6%) (18%) 39. 3% 19, 6% 2. 3% 9. 3% Profit/(loss) before interest and tax Capex Ratios Operating margins Turnover increase/ (decrease) on previous interim period Gross margin
CONTENTS • Salient features • Financial review • Strategy • Operational review • Capex • Group geographical segments • General • Conclusion • Contacts
SALIENT FEATURES – 31 August 2011 Order book up to R 1, 5 billion Revenue up 14, 2% (Aug 2010 comparative) EBITDA down 2, 9% HEPS down 195%
SALIENT FEATURES – 31 August 2011 R 2, 3 billion short-term prospects pipeline HEPS down from 4, 1 to (3, 9) cents Group operating loss (1, 7)% (2011 H 2: (9%)) • Geotechnical • Civil • Pipelines 5% (2011 H 2: (2%)) (6)% (2011 H 2: (9%)) 0. 3% (2011 H 2: (6%))
FINANCIAL REVIEW
Statement of Financial Position Salient Features: At Aug 2010 R’ 000 At Feb 2011 R’ 000 At Aug 2011 R’ 000 Assets Non-current assets 986 302 966 187 1 085 923 Current assets 622 468 498 164 626 951 1 608 770 1 464 351 1 712 874 Share capital and reserves 758 829 703 156 893 375 Non-current liabilities 376 813 195 562 298 564 Current liabilities 473 128 565 633 520 935 Total equity and liabilities 1 608 770 1 464 351 1 712 874 Net asset value per share (cents) 258, 4 238, 9 230, 1 Total assets Equities and liabilities
Statement of Financial Position Salient Features - Feb 11 to Aug 11 • Total assets • Cash • • • Trade & other receivables PPE Cash reserves • Operational cash-flow consumed • Acquisition PPE • Proceeds rights issue • Decrease in secured borrowings Secured borrowings • Debt/debt + equity ratio Equity • Loss after tax • FCTR ↑ R 248, 5 m ↓ R 62 m ↑ R 137, 0 m R 152, 3 m Capex (R 55. 7 m) (R 152, 3 m) R 200 m (R 53 m) 26, 4 % (Aug 2010 : 34, 1%) (R 18, 7 m) R 6, 3 m
Debt: Equity Ratio
Statement of Income Salient Features Aug 2010 R’ 000 % Aug 2011 R’ 000 Revenue 750 798 14, 2% 857 524 EBITDA 75 171 (66, 2%) 25 405 Profit /(loss) after tax 12 311 (251, 7%) (18 677) Headline earnings/(loss) 12 006 (225, 3%) (15 047) 4, 1 (195%) (3, 9) Headline earnings /(loss) per share
Esorfranki (Mnth) 250000 Revenue data (R'000) 225000 R’ 000 200000 175000 150000 125000 100000 750000 25000 0 Mar-10 Apr-10 May-10 Geotechnical Civils Pipelines 18, 844 24, 036 18, 641 Civils 38, 333 42, 591 38, 843 Geotechnical Civils Pipelines 59, 279 59, 844 51, 411 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 1 19, 800 6, 583 14, 393 7, 301 15, 457 12, 641 6, 321 47, 833 37, 632 20, 089 57, 174 64, 881 62, 853 31, 427 79, 452 82, 183 91, 011 40, 643 60, 969 56, 761 28, 380 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 8, 329 16, 659 15, 580 16, 598 2, 403 18, 527 29, 103 31, 109 25, 717 51, 434 43, 690 69, 625 50, 001 84, 063 49, 876 57, 111 32, 246 64, 493 45, 870 62, 478 61, 543 81, 914 78, 993 74, 813
Geotechnical 150000 125000 R’ 000 100000 750000 25000 0 Mar-10 Geotechnical 59, 279 Apr-10 May-10 59, 844 51, 411 Jun-10 79, 452 Jul-10 Aug-10 Sep-10 82, 183 91, 011 40, 643 Oct-10 Nov-10 Dec-10 60, 969 56, 761 28, 380 Jan-11 32, 246 Feb-11 64, 493 Mar-11 45, 870 Apr-11 May-11 62, 478 61, 543 Jun-11 81, 914 Jul-11 Aug-11 78, 993 74, 813
Civils 150000 125000 R’ 000 100000 750000 25000 0 Civils Feb-09 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 38, 333 42, 591 38, 843 47, 833 37, 632 20, 089 57, 174 64, 881 62, 853 31, 427 25, 717 51, 434 43, 690 69, 625 50, 001 84, 063 49, 876 57, 111
Pipelines
STRATEGY
Group Strategy Short term • • Competition Authority - current and ongoing Rights offer - completed BEE scorecard improvement to Level 4 - completed Consolidate and integrate operating divisions into one single entity completed Expand market share into SSA growth countries - ongoing Ø Civils - Mozambique Ø Geotechnical – Ghana, Kenya Restore profitability with existing contract portfolio and divisions Working capital management Medium to long term • • • Further geographical expansion Expanding the product range organically and acquisitively to focus specifically on growth sectors BEE scorecard improvement
New Group Structure as of 1 March 2011 Divisionalisation Esorfranki Limited • Holding company Esorfranki Construction (Pty) Ltd • Operations company • Civils • Geotechnical • Pipelines • Shared Services • All off-shore companies and divisions Esorfranki Properties
Geotechnical Merge • Durban • The former Esor Africa and Franki Africa will operate as Esorfranki Geotechnical Division from single premises situated in Phoenix Industrial Park from 1 st September 2011. • Johannesburg • The former Esor Africa’s operations excluding pipejacking have moved to the Wynberg facilities and together with the former Franki Africa operate as Esorfranki Geotechnical • Esorfranki Pipejacking is operating under Esorfranki Civils from our Activia Park facilities
The Esorfranki Network Currently working in Ghana for an Australian mining group
OPERATIONAL REVIEW
Outstanding Order Book and Secured Revenue Business Unit Order Book As at 31 Aug 2011 (R millions) Secured Revenue FY 2012 (R millions) Secured Revenue FY 2013 (R millions) Secured Revenue FY 2014 (R millions) Geotechnical 244 603 15 - Civils 984 781 382 205 Pipelines 568 277 134 270 1 796 1 661 531 475 Total
Outstanding Order Book & Secured Revenue excluding Western Aqueduct Business Unit Order Book As at 31 Aug 2011 (R millions) Secured Revenue FY 2012 (R millions) Secured Revenue FY 2013 (R millions) Secured Revenue FY 2014 (R millions) Geotechnical 244 603 15 - Civils 984 781 382 205 Pipelines 137 227 33 - 1 365 1 611 430 205 Total
Esorfranki Civils
Civils products and services • Road building • Bridge construction • Township infrastructure • Mining infrastructure • Water reticulation • Water towers & reservoirs • Sewer reticulation • Bulk earthworks • Building
Geographical footprint & some key contracts
Civils Segment Revenue Aug 2010 R’ 000 Segment revenue Aug 2011 R’ 000 225 321 354 366 24 097 (22 096) 459 909 718 654 No of employees 1 176 1 544 Revenue growth (34%) 57% Operating margins 10, 6% (6, 2)% Order book 501 801 983 954 Pending awards 515 000 2 200 000 2 600 000 3 000 Non-government 36% 34% Government 64% 66% Profit/(loss) before interest and tax Segment assets Prospects * As at 28/02/2011
Civils outlook 2012 and beyond • K 71/R 55 current road contract R 213 m • RAL current road contract R 80 m • Budget of R 500 m for new road contracts • Kusile current civils and earthworks contract R 326 m • Potential add-ons to current contract R 300 m • Admin block R 200 m • Commercial fill R 150 m • Crushing contract R 400 m • Lawley current infrastructure contract to existing low-cost housing R 30 m • Potential for adjacent developments • Bakwena N 4 Mooinooi current road contract R 330 m • Mine work Atcom (Xstrata) and Anglo R 200 m • Big dig cannels R 120 m targeted for next year • N 1/N 2 Winelands PPP we should get some geotechnical work from the contract
Civils outlook 2012 and beyond (cont. ) • • • Housing • Mozambique middle class housing and infrastructure 1 st phase R 700 m 1 -2 year • Johannesburg low-cost housing R 1, 5 bn 3 -4 years • Eastern Cape low-cost housing R 550 m 1 -2 years Building • The Rose in Rosebank current R 30 m • Roedean Hostel current R 17 m • Munitoria pending R 100 m Pipejacking • Current contracts this year R 100 m (short term contracts)
Esorfranki Pipelines Add a picture here
Pipelines products and services • Gas & Petrochemical steel pipelines • Water & Wastewater pipelines & pump stations • Sewer pipelines & pump stations • Pipeline refurbishments • Cement mortar lining • Valve chambers • Associated concrete structures • Associated infrastructure
Pipelines Segment Revenue Aug 2010 R’ 000 Segment revenue Aug 2011 R’ 000 102 297 113 320 423 313 103 546 115 445 No of employees 467 475 Revenue growth (21, 6%) 10, 7 0, 41% 0, 27% Order book 240 488 567 618 Pending award 425 000 170 000 5 900 000 500 0% 0% 100% PBIT Segment assets Operating margins Prospect Non-government Government * As at 28/02/2011
Geographical footprint & some key contracts
BG 3 Pipeline contract
Pipelines outlook 2012 and beyond • Current contracts • • BG 3 contract near Vaal Dam R 160 m still to do. Miscellaneous contracts R 35 m still to do Western Aqueduct R 420 m awaiting review application on 16 th September 2011 but currently working on site Mooihoek 3 contract R 60 m • Potential awards • • • Giyani R 200 m (under appeal by Esorfranki) approximately R 120 m still to do. Metalong Lesotho • Phase 1 placed 3 rd R 375 m • Phase 2 placed 3 rd R 291 m • Phase 3 placed 3 rd R 130 m Piet se Kop R 24 m Bluff Military Base R 23 m Thulele/Woodmead R 25 m
Pipelines outlook 2012 and beyond (cont. ) • Prequalifications TCTA • Olifants River prequalification JV with Civcon pending R 2 bn • Gweru and Kadoma Zimbabwe • Other prospects • • Rand Water Augmentation Budget R 4 bn • TCTA Mooi Umgeni water transfer scheme R 800 m • Sasol SNI 26” from Sasolburg to Secunda R 400 m Sasol 12” Secunda R 40 m Zimplats pipeline R 60 m N 10 pipeline Bloemendal R 70 m
Esorfranki Geotechnical
Geotechnical products and services • Piling • Lateral Support • Marine Structures • Diaphragm Walls • Ground Improvement • Dynamic Compaction • Ground Remediation • Soils Investigation • Geotechnical Design
Geotechnical Segment Revenue Aug 2010 R’ 000 Aug 2011 R’ 000 423 180 405 611 24 820 18 591 713 901 674 136 No of employees 1 408 1 095 Revenue growth (19, 8%) (4, 1%) 5, 9% 4, 5% Order book 254 089 244 017 Pending awards 190 252 94 775 1 480 843 1 246 870 Non-government 56% 58% Government 44% 42% Segment revenue PBIT Segment assets Operating margins Prospects * As at 28/02/2010
Geographical footprint & some key contracts
Geotechnical outlook 2012 and beyond • Johannesburg current awarded R 186 m • Kusile current piling work R 20 m • Kusile ancillary piling work R 140 m • Village Walk, Sandton R 40 m • 114 West Street, Sandton R 15 m • Stella Rise, Old Mutual, Sandton R 30 m • Rosebank Growthpoint R 25 m • Other pending R 94 m • Other key R 147 m • Cape Town current awarded R 128 m • Portside R 10 m • V & A Clocktower R 15 m • Other pending R 13 m • Other key R 166 m • Angola current award R 38 m • Other pending R 92 m • Other key R 253 m
Geotechnical outlook 2012 and beyond (cont. ) • Durban current awarded R 104 m • Other pending R 16 m • Other key R 283 m • Mozambique current awarded R 73 m • Other pending R 15 m • Other key R 180 m • Tanzania current award R 37 m • Other pending R 25 m • Other key R 105 m • Mauritius current award R 50 m • Other pending R 5 m • Other key R 212 m
General 2012 and beyond • Eskom • Medupi Power Station still some housing likely to happen • Kusile Power Station housing and civil works • Nuclear Power Station (announced in the media) • 3 rd Coal Fired Station (mooted) • Transmission lines • Sanral and other roads (15 000 km non-toll) • Coal haul-roads upgrades R 20 bn • Nelspruit Bypass • Non-toll roads budget of R 8, 6 bn in 2011 expected R 9, 5 bn for 2012 from National Treasury • GFIP Phase 2 (Sanral) • PWV 9 JHB-Pta link west of Ben Schoeman • PWV 5 connects R 21 at Olifantsfontein to N 1 and on to Soweto • PWV 14 connects R 21 from Easr Rand Mall to M 2 • K 54 is the Pta eastern ring road from Rietvlei to Donkerhoek on N 4
General 2012 forecast and beyond (cont. ) • • • Transnet (PRASA) Portnet (Dry docks and general harbour upgrades) Petronet (Refined product line from Maputo) Coega • Refinery • Smelter Expansion in resource arena • Iron ore and manganese • Coal • Platinum Mozambique Gasline (Temani Gas Fields) African new markets • Ghana • Mozambique • Kenya Gautrain private development spinoff Private & commercial developments
CAPEX Segments Financial years 2012 H 2 R’ 000 (Forecast) 2012 H 1 R’ 000 (Actual) 2011 R’ 000 2010 R’ 000 Geotechnic al 15 289 14 086 11 793 42 727 Civils 44 759 137 933 17 964 49 711 Pipelines 20 000 - 6 104 3 096 Corporate 2 000 323 14 512 500 Total 82 048 152 342 50 373 96 034 South Africa 82 048 142 565 47 509 58 097 - 9 777 2 863 37 937 Sub-Sahara
CAPEX requirements for 2012 • Geotechnical – nothing specific • Civils – site specific (hire where possible) K 71/R 55 (24 months) N 4 (30 months) Kusile Civil works (30 months) Kusile crushing and fill (15 months) Mocambique (5 years) Maintenance capex • Pipelines Western Aqueduct (48 months) Maintenance capex
New 65 -tonne excavator
Tippers for the N 4
Crushers on the N 4
GROUP GEOGRAPHICAL SEGMENTS South Africa (R’ 000) Total (R’ 000) Segment revenue 714 633 142 891 857 524 Profit/(loss) before interest and tax (33 219) 18 804 (14 415) (Loss)/profit after Tax (33 096) 14 419 (18 677) Segment assets 1 300 919 411 955 1 712 874 Order book 1 732 010 63 579 1 795 589 2 928 196 3 124 (4, 6%) 13, 1% (1, 68%) No of employees Operating margins Non-government 39% (42% FY 2011) Government 61% (58% FY 2011)
GENERAL • Mega projects • Africa • Succession planning • Challenges • Protracted awards/funding • Competition and margin squeeze • Angolan liquidity • Working capital pressure • Lack of private investment spend
CONCLUSION • The Esorfranki group is aware that trading conditions will continue to be tight going forward • We will continue to experience margin squeeze • We are aware that Government’s planned spending is under pressure through decreased revenue streams and funding constraints • Africa remains a difficult but opportunistic market for the group • Notwithstanding these conditions and restraints our management team believes we have the acumen and the wherewithal to steer the group successfully through these troubled times.
CONTACT DETAILS Esorfranki Limited | 30 Activia Road Activia Park Germiston 1401 PO Box 6478 Dunswart 1508 South Africa Bernie Krone| CEO Wayne van Houten| CFO + 27 83 259 2584 + 27 84 556 2486 +27 11 776 8700 +27 11 822 1158 Bernie. krone@esorfranki. co. za Wayne. vanhouten@esorfranki. co. za
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