CIG delivers robust results underpinned by substantial delivery into the renewable energy sector

29th October 2013

  

Font size: - +


Salient features
- Revenue up 31% to R2037 million (2012: R1 553 million)
- Ebitda up 24% to R278 million (2012: R225 million)
- HEPS up 19% to 137.8 cps (2012: 116.1 cps)
- Order book up 10% to R2,2 billion

Consolidated Infrastructure (‘CIG’)(JSEL:CIL’) is the largest turnkey developer and installer of high-voltage electrical substations and overhead cables in sub-Sahara Africa. The Group delivered robust results for the year ended 31 August  2013, driven by the delivery of substantial complex electrical work into South African, Department of Energy’s Renewable Energy Independent Power Programme (“REIPP”) and development of new electrical infrastructure in West and East Africa, specifically Ghana,  Kenya and Zambia.

Revenue grew by R483 million to R2 037 million (2012: R1 553 million) and earnings attributable to shareholders improved by 25 % to R 171 million from the prior year’s R 137 million.

Conco, which contributes 85% of CIG’s revenue, increased its revenue contribution by 35% to R1 727 million. The division successfully executed R600 million worth of highly complex electrical work on seven Round 1 projects of the Department of Energy’s REIPP programme. The remaining R270 million is due for delivery next year.  The subsidiary met all key milestones to date. While there are currently on-going negotiations on the award of Round 2 projects the group has secured orders of R290m out of a potential R500 million. The division continues to focus its attention both in South African and across the African continent, where it has increased its focus to sustainably meet the continents growing electrical demands.

The Group expanded its Protection and Automation offerings and extended its services to other market segments across the African continent. The division was separated into a standalone business with an independent strategy and growth prospects. The independent division is anticipated to grow over the medium term and if successful will have a material impact on the division in 2015.

Further inroads were made in the Operations and Maintenance division to service the highly technical maintenance requirements of wind farm developers and original equipment manufacturers. The division won a maintenance balance of plant and a turbine maintenance contract during the year. An increasing trend from municipalities to outsource maintenance on a longer term contractual basis should also benefit the division.

The Building Materials division has another successful year and expanded in line with a moderate pick up in the sector. Two small strategic bolt-on acquisitions were completed during the year

Continued progress was made on the rest of the African continent and significant contract wins were achieved in Tanzania, Kenya, Uganda and Zambia in East Africa whilst Ghana and Angola continued to develop.  The Saudi business successfully executed its first small project and the business has been selected for an additional R70m project. Negotiations are on-going and the group anticipates closure of this project

CIG’s acquisition in specialist oil and gas waste management group, Angolan Environmental Services (‘AES’) is expected to be completed next month when the quota is expected to be transferred.  Management have been involved with this business since December 2012 and are pleased with its performance, which is in line with our expectations.  Had CIG equity accounted the results of AES for the 8 months ended August 2013 it would have contributed 18c of additional earnings per share.

The group was successful in raising R256m of equity capital in May 2013 and R130m of medium-term notes in August 2013 .The debt-to-equity ratio remained constant at 30% (2012: 32%).The groups raised capital specifically to fund the high levels of organic growth experienced in the electrical sector and to settle the AES purchase consideration. The group maintained a Moody’s credit rating of Baa2.za as part of the programme.

CEO of CIG, Raoul Gamsu commented: “We have successfully delivered some complex electrical work in the South African renewable energy sector, which has substantially contributed to our robust results and demonstrated our technical and legal ability to deliver on time.  The current order book of Conco and higher than expected levels of bidding and tenders awaiting adjudication will contribute to Group’s sustainable growth path in South Africa.”

“A growing population together with increasing urbanisation and purchasing power will increase our opportunities across Africa. Consequently, our focus to position our divisions to tender and flexibly deliver high value electrical projects into the African

To watch Creamer Media's latest video reports, click here
 

Edited by Creamer Media Reporter

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

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