With profit for the year ended June 30 up 143% to R82-million, from a loss of R189-million in 2016, JSE-listed engineering services provider ELB has seen a 147% increase in headline earnings a share to 243c, from a loss per share of 519c.

“Despite political uncertainty, the volatile currency and improved but still difficult trading conditions, the right-sizing and positioning of the group undertaken in the previous financial year, together with some strengthening in certain commodity prices and a firming of our order book, has enabled the group to return to profitability,” noted CEO Stephen Meijers at the company’s financial results presentation on Wednesday.

ELB’s net asset value increased 7% to 2 530c a share.

Further, the company saw strong cash generation from operations of R198-million, strengthening of its order book and the award of delayed projects during the period.

ELB’s equipment division sales rose to R875-million from R686-million in the previous year – owing to improved market demand and increased market penetration – while the company’s engineering services division grew sales to R1.2-billion from R761-million and posted a pretax profit of R15-million.

The services division booked R30-million in project closure costs and claims settlements for projects completed in the 2016.

Sales rose to R454-million in Australasia from R336-million and the pretax profit from the region increased to R30-million from R1-million, owing to recoveries in both volumes and margins, improved cost management and more favourable exchange rates.

“Where 2016 was characterised by pressure on margins, foreign exchange losses, the costs of restructuring and repositioning the business, and delayed contracts, the 2017 year saw the start of those contracts, relief from a stronger rand, and improved commodity prices,” said Meijers.

He added that ELB would continue to invest in new initiatives to diversify and position itself for sustainable growth, but only expects returns to be realised in the future.

These initiatives include the provision of alternative energy power plants of up to 50 MW and the leveraging of expertise gained in the industrial sector, specifically in the fast-moving consumer goods field.

According to Meijers, these initiatives are all in line with the core expertise of the group and will enhance its ability to service markets through horizontal or vertical diversification.

“A number of projects are either currently ongoing or in the pipeline in these fields,” he said.

Meanwhile, the group has increased its know-how base significantly in the minerals-beneficiation and fine powder handling sectors, through partnerships formed with China’s ENFI engineering corporation and German machine industry group Haver & Boecker. Meijers says ELB will continue to pursue other technology-focused partnerships.

“This will allow the group to provide a broader service offering to its existing and future clients,” he noted.

ELB declared a final dividend of 50c a share, for a total dividend for the year of 82c.

“The board is pleased to be able to report a return to profitability after a difficult prior financial year. Many of the initiatives that were embarked on, and projects pursued over the past years, have achieved a positive outcome in this period,” concluded Meijers.