https://www.engineeringnews.co.za

Legacy issues, poor Q1 affect Rolfes' H1 earnings

19th February 2018

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

Font size: - +

Black-empowered chemical group Rolfes' financial results for the six months ended December 31 were negatively affected by legacy issues and a poor first quarter, resulting in headline earnings halving to R23.62-million, from R48.23-million in the six months to December 31, 2016.

Revenue from continuing operations decreased by 7.8% to R734-million, compared with revenue of R796.4-million generated in the six months to December 2016.

Revenue translation to gross profit across all business units, however, remained solid, despite the tough trading environment, and resulted in a gross margin of 22.7% reflecting an improvement on the comparative period of 21.6%.

Rolfes' food division's revenue was negatively impacted on by stock shortages, resulting in a 15.2% year-on-year decrease in revenue to R336.8-million. The company notes, however, that these issues have been resolved.

The agricultural division's revenue increased by 3.1% year-on-year to R160.9-million, while the chemicals division performed well in a tough environment, with revenue up 2.3% to R167.6-million.

The colour division's revenue, however, decreased by 17.5% to R47.4-million. The board is assessing the business unit and considering various options in terms of the way forward, the company stated on Monday.

Meanwhile, the water business, which has a fixed cost base, has rebranded and repositioned itself, moving towards being a total water management solution provider.

"We have invested in a strong management team and numerous proposals have been submitted and, despite the long lead time for tender awards, momentum is being gained. The Botswana business has ceased trading and the assets are being disposed of," the company stated.

Rolfes expects the business environment across Southern Africa to remain challenging in the months ahead.

Ongoing drought conditions create an uncertain environment for the agricultural division owing to the long lead times in manufacturing appropriate stock levels, while management is focusing on the core businesses and related opportunities while assessing the underperforming assets.

A review of all business units and appropriate action plans implemented are in the process of being performed to ensure the group delivers sustainable growth and an attractive return on assets, while management continues to seek new product ranges and opportunities to add to its portfolio.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Yale Lifting Solutions
Yale Lifting Solutions

Yale Lifting Solutions is a leading supplier of lifting and material handling equipment in Southern Africa. Yale offers a wide range of quality...

VISIT SHOWROOM 
Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Photo of Martin Creamer
On-The-Air (15/03/2024)
15th March 2024 By: Martin Creamer
Magazine round up | 15 March 2024
Magazine round up | 15 March 2024
15th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.081 0.127s - 155pq - 2rq
Subscribe Now