Low customer activity across most areas of its operations has seen Torre Industries post “disappointing results” for the six months ended December 31, with normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) decreasing by R35-million to R65-million.

CEO Johan Botes said the interim results followed a challenging second half of the 2016 financial year, with the revenue from continuing operations decreasing by R57-million to R802-million, mainly as a result of a sale in the analytical services segment relating to a contract in Namibia in the prior period.

Revenue and normalised Ebitda from continuing operations, however, increased by R53-million to R802-million and by R35-million to R65-million, respectively, as the group benefited from operational improvements that were initiated at the end of the 2016 financial year.

The group’s debt levels remained at similar levels to June 2016 as operations managed their working capital effectively during the period. Cash generated from continuing operating activities increased by 13% to R26-million.

Torre has also reached agreement with African Agriculture Fund, which will acquire Torre’s 55% shareholding in and loan claims against Kanu Equipment for $27.2-million. Torre will receive $13.5-million on the effective date, with the balance to be paid over a period of 14 months.

“We are seeing evidence of positive outlooks from our customer base although the sustainability of the commodity recovery remains uncertain. The group’s focus will continue to be on organic growth and increasing the market share of its existing operations, while continuing to reduce costs.

“Various cost cutting initiatives have been implemented throughout the group and are expected to start bearing fruit over the next 12 to 24 months,” said Botes.

A strategic review by the board is under way and expected to be completed at the end of March to confirm the group’s strategy to decrease its reliance on capital equipment; focus on Southern Africa; align costs in line with the weak economic environment; consolidate back offices while maintaining separate front offices; evaluate bolt-on acquisitions; and enhance human capital through learning and development and strategic appointments.