AltX-listed electrical and instrumentation construction group B&W on Monday reported slightly higher profit for the 2009 financial year, and said that it expected only a “marginal” short-term recovery in the electrical and engineering industry.

The company’s profit rose by 2,5% to R59,3-million, while revenue increased by 12% to R502,8-million in the year ended August 31.

Mining continued to account for the lion’s share of group revenue, about 67%, B&W reported, but noted that income from infrastructure and cross-border projects had increased remarkably year-on-year.

B&W MD Brian Harley commented the downturn in the global economy had caused several companies to halt their projects, thus affecting B&W’s project pipeline.  The company had responded by cutting operational costs to ensure that the lesser amount of work was accommodated, he added.

Further, new projects were secured to take B&W’s order book to a record high of R570-million heading into the 2010 financial year, Harley said. A revised schedule for the start of the delayed contracts, together with a timeous start of the new work, should see a good proportion of the order book translate into revenue during the 2010 financial year.

B&W’s new orders for the year totalled R480-million, 39% of which was situated outside of South Africa, while around 62% of the order book related to cross-border contracts.

Harley noted that although the short-term prospects remained good, the entire construction industry was likely to experience difficult times during 2011/12. He added that tighter competition for tenders was expected to continue placing pressure on margins.

B&W believed that the overall electrical and instrumentation projects pipeline indicated reasonable growth opportunities, particularly in the mining sector,, over the medium-term and in oil & gas from around 2013/2014.

The group said that while the bulk of current opportunities was situated in South Africa for the foreseeable future, it would continue to pursue cross-border work in Africa, saying that it viewed it as a high growth region where margins could be more favourable.

Harley also said that current economic and market conditions might yield “exciting” acquisition opportunities, adding that B&W would pursue these where they would support expansion into Africa and/or diversification into complementary niche electrical and instrumentation markets.

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