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Aug 21, 2012

Contract mining and plant rental division pushes up Eqstra profit

Construction|Botswana|Industrial|Industrial Equipment|Mining|Namibia|PROJECT|Projects|Rental|Mozambique|Contract Mining|Equipment|Industrial Equipment|Logistics|Operations
Construction|Botswana|Industrial|Industrial Equipment|Mining|Namibia|PROJECT|Projects|Rental||Equipment|Industrial Equipment|Logistics|Operations
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JSE-listed Eqstra on Tuesday reported improved financial results for the 2012 financial year, boosted by increased aftermarket sales in its industrial equipment division, as well as an upsurge in rental activity from its contract mining and plant rental division.

Profit increased to R488-million during the year ended June, compared with the R360-million recorded in the prior year.

The group recorded a revenue increase of 18%, from R6.9-billion in 2011, to R8.1-billion in the 2012 financial year.

Rentals in its contract mining and plant rental division increased as the Benga project, in Mozambique, ramped up production volumes and activity picked up in Namibia and Botswana.

The contract mining and plant rental division attracted a profit before tax of R109-million, up from R51-million in 2011, while revenues jumped 14.9%, from R3.2-billion in 2011, to R3.7-billion in the 2012 financial year.

The company’s construction and mining equipment division, however, weighed on the firm’s results, reporting a profit before tax of R1-million, which is a 95.8% fall from the R24-million achieved in 2011. Revenue fell 10.8%, reaching R452-million during the period under review, compared with R507-million in the prior year, owing to slowing equipment demand as commodity prices and projects contracted.

However, the company remained optimistic of the division’s future performance as aftermarket revenues and market share gains in the dump truck market were expected to increase.

Eqstra’s industrial equipment division earned R1.9-billion in revenue in 2012, compared with R1.6-billion the year before, with a 28% year-on-year profit-before-tax increase to R130-million.

Further, within the group’s fleet management and logistics division, revenue reached R2.1-billion for the year, up from R1.9-billion a year ago, and profit before tax of R219-million was recorded, compared with R186-million in 2011.

Basic and headline earnings a share, from continuing operations, increased 34.8% and 6.2% to 89.4c and 77.2c, respectively. Eqstra’s discontinued operations recorded basic earnings a share of 26.5c, bringing total basic earnings a share to 115.9c for the period under review.

Eqstra’s sale of its Bucyrus business unit in June resulted in a net cash inflow to the group of R424-million.

The group also reported giving notice to terminate its distribution rights for New Holland Construction from August 31. The New Holland Construction business unit was classified as a discontinued operation earlier this year.

Eqstra declared a dividend of 28c a share for the year ended June.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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